##### 



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended
December 31, 2007

Commission File Nos. 33-34562;
33-60288; 333-48983; 333-133224

ML LIFE INSURANCE COMPANY OF NEW YORK
(Exact name of Registrant as specified in its charter)

|                                                               |  |                                     
|-------------------------------------------------------------- |  | ------------------------------------
|New York                                                       |  | 16-1020455                          
|                                                               |  |                                     
|(State or other jurisdiction of
incorporation or organization) |  | (I.R.S. Employer Identification No.)

|                                                
|------------------------------------------------
|4 Manhattanville RoadPurchase, New York 10577   
|                                                
|(Address of Principal Executive Offices)        
|1-800-333-6524                                  
|                                                
|(Registrants telephone no. including area code)

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

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of
the Securities Act. [ ] Yes
[X] No

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or
15(d) of the Act. [ ] Yes
[X] No

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

Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrants knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [ X ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer,
a non-accelerated filer, or a smaller reporting company.  See the
definitions of large accelerated filer, accelerated filer and smaller reporting company in Rule 12b-2 of the Exchange Act.

[ ]  large accelerated filer
     [ ]  accelerated filer
     [X] non-accelerated filer
     [ ] smaller reporting company


Indicated by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the
Act). [ ] Yes
[X] No

State the aggregate market value of the voting and non-voting
common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average
bid and asked price of such common equity, as of the last business day of the registrants  most recently completed second
fiscal quarter: Not applicable.

Indicate the number of shares outstanding of each of the registrants
classes of common stock, as of the latest practicable date.

Common 220,000

REGISTRANT MEETS THE CONDITIONS SET FORTH IN GENERAL INSTRUCTION I(1)(a)
AND (b) OF FORM 10-K AND IS THEREFORE FILING THIS FORM WITH THE REDUCED
DISCLOSURE FORMAT.





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Item 1.  Business
      Our Insurance
Companies
 Item 1A. Risk Factors
 Risk Factors that Could Affect ML Life Insurance Company of New York
  Competitive Environment
 Industry trends could adversely affect our financial results
  1




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Competitive factors may adversely affect our market share and financial results
   Regulatory and Legislative Risks
 The insurance industry is heavily regulated and changes in regulation may adversely affect our
financial results
    Changes in tax legislation could make certain insurance products less attractive to consumers
   Market Risk
 Changes in equity markets and other factors may significantly affect our financial results
  2




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Changes in equity markets and interest rates affects the profitability of our products with
guaranteed benefits, therefore, such changes may have a material adverse affect on our financial
results
     Credit Risk
 Impairments in the value of the investment portfolio may adversely affect our financial results
  3




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Interest Rate Risk
 Changes in market interest rates may adversely affect our financial results
    Liquidity Risk
 Business and financial results may be adversely impacted by an inability to sell assets to meet
maturing obligations
  Underwriting Risk
 Differences between actual claims experience and underwriting and reserving assumptions may require
liabilities to be increased, which may have a material adverse effect on our financial results
  4




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Concentration Risk
 The use of a single distribution channel may adversely affect our financial results
  Other Risks
 Inadequate or failed processes or systems, human factors or external events may adversely affect
our profitability, reputation or operational effectiveness
  We may have difficulty transitioning into AUSAs business model and may incur unexpected costs in
connection with the integration
  Litigation and regulatory investigations may adversely affect our business, results of operations,
and financial condition
  Item 1B. Unresolved Staff Comments
  Item 2.  Properties
   5




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Item 3. Legal Proceedings
  Item 4.  Submission of Matters to a Vote of Security Holders
  PART II
 Item 5.  Market for Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of
Equity Securities
 (a)
    
    The Registrant is a wholly owned subsidiary of AUSA. There is no public trading market for
the Registrants common stock.
  (b)
    
    Not applicable.(c)
    
    Not applicable.
 Item 6.  Selected Financial Data
  Item 7. Managements Narrative Analysis of Results of Operations
  Forward Looking Statements
  1)
    
    Changes in general economic conditions;2)
    
    Changes in the performance of financial markets, including emerging markets, such as with
regard to:
 a)
    
    The frequency and severity of defaults by issuers in our fixed income investment
portfolios; andb)
    
    The effects of corporate bankruptcies and/or accounting restatements on the financial
markets and the resulting decline in the value of equity and debt securities we hold;
 6




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3)
    
    The frequency and severity of insured loss events;4)
    
    Changes affecting mortality and other factors that may impact the profitability of our
insurance products;5)
    
    Changes affecting interest rate levels and continuing low or rapidly changing interest rate
levels;6)
    
    Increasing levels of competition;7)
    
    Changes in laws and regulations, particularly those affecting our operations, the products we
sell, and the attractiveness of certain products to our customers;8)
    
    Regulatory changes relating to the insurance industry in the jurisdictions in which we
operate;9)
    
    Acts of God, acts of terrorism, acts of war and pandemics;10)
    
    Changes in the policies of central banks and/or governments;11)
    
    Litigation or regulatory actions that could require us to pay significant damages or change
the way we do business;12)
    
    Customer responsiveness to both new products and distribution channels;13)
    
    Competitive, legal, regulatory or tax changes that affect the distribution cost of or demand
for our products; and14)
    
    Our failure to achieve anticipated levels of earnings or operational efficiencies as well as
other cost saving initiatives.
  Business Overview
  Acquisition
 Business Combinations Goodwill and Other Intangibles
 Push Down Basis of Accounting in Financial Statements of a Subsidiary
 7




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Critical Accounting Policies and Estimates
   Valuation of Fixed Maturity and Equity Securities
 Accounting for Certain Investments in Debt and Equity Securities
  Other-Than-Temporary Impairment Losses on Investments
  8




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Deferred Policy Acquisition Costs (DAC) for Variable Annuities and Variable Life Insurance
 Accounting and
Reporting by Insurance Enterprises for Certain Long-Duration Contracts and for Realized Gains and
Losses from the Sale of Investments
     Value of Business Acquired (VOBA)
  9




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Other Intangibles
  Goodwill
 Goodwill and Other Intangible Assets
 Policyholder Liabilities
 Accounting and Reporting by
Insurance Enterprises Accounting and Reporting by Insurance Enterprises for Certain
Long-Duration Contracts and for Realized Gains and Losses from the Sale of Investments Accounting and Reporting by Insurance Enterprises for Certain
Nontraditional Long-Duration Contracts and for Separate Accounts
 Policyholder Account Balances
  10




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Future Policy Benefits
   Federal Income Taxes
   Accounting for Uncertainty in
Income Taxes,
  11




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Recent Developments
 Accounting Pronouncements
 Business Combinations Business Combinations
 Noncontrolling Interests in Consolidated Financial
Statements Consolidated
Financial Statements
 The Fair Value Option for Financial Assets and
Financial Liabilities. Fair Value
Measurements.
 12




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Accounting by Insurance
Enterprises for Deferred Acquisition Costs in Connection With Modifications or Exchanges of
Insurance Contracts
 Fair Value Measurements.
 Accounting for Uncertainty in Income Taxes Interpretation of FASB Statement No. 109
 New Business
   13




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Predecessor
    
    
    % Change(dollars in millions)
    
    
    2007 vs.
    
    
    2006 vs.2007
    
    
    2006
    
    
    2005
    
    
    2006
    
    
    2005Variable Annuities:L-Share
    
    $
    17.4
    
    
    $
    20.0
    
    
    $
    11.6
    
    
    
    (13
    )%
    
    
    72
    %Bonus
    
    
    12.9
    
    
    
    23.9
    
    
    
    10.8
    
    
    
    (46
    )
    
    
    121B-Share
    
    
    5.3
    
    
    
    14.9
    
    
    
    17.4
    
    
    
    (64
    )
    
    
    (14
    )C-Share
    
    
    1.0
    
    
    
    2.1
    
    
    
    2.3
    
    
    
    (52
    )
    
    
    (9
    )36.6
    
    
    
    60.9
    
    
    
    42.1
    
    
    
    (40
    )
    
    
    45All Other Deposits
    
    
    0.1
    
    
    
    0.4
    
    
    
    0.9
    
    
    
    (75
    )
    
    
    (56
    )Total Direct Deposits
    
    $
    36.7
    
    
    $
    61.3
    
    
    $
    43.0
    
    
    
    (40
    )%
    
    
    43
    %
   Financial Condition
  Predecessor(dollars in millions)
    
    2007Investment performance
    
    $
    77.9Deposits
    
    
    36.7Policy fees and charges
    
    
    (18.4
    )Surrenders, benefits and withdrawals
    
    
    (140.4
    )Net decrease
    
    $
    (44.2
    )
  14




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Predecessor(dollars in millions)
    
    2007Deposits collected
    
    $
    36.7Internal tax-free exchanges
    
    
    (4.2
    )Net contract owner deposits
    
    
    32.5Contract owner withdrawals
    
    
    51.6Net transfers from separate accounts
    
    
    102.5Net contract owner withdrawals
    
    
    154.1Net contract owner activity
    
    $
    (121.6
    )
   Successor
    
    Predecessor2007
    
    2006Investment grade fixed maturity securities (rated A or higher)
    
    
    35
    %
    
    
    44
    %Policy loans
    
    
    30
    
    
    
    30Cash and cash equivalents
    
    
    26
    
    
    
    14Investment grade fixed maturity securities (rated BBB)
    
    
    8
    
    
    
    11Equity securities
    
    
    1
    
    
    
    1100
    %
    
    
    100
    %
    15




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Subprime Mortgage Investments
 Business Environment
  Equity Market Performance
     16




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##### 



Medium Term Interest Rates, Corporate Credit and Credit Spreads
       Liquidity and Capital Resources
 Liquidity
   Predecessor
    
    SuccessorStandard and Poors
    
    AA-
    
    AA-A.M. Best
    
    
    A
    
    
    
    A+Moodys
    
    Not Rated
    
    Aa3Fitch
    
    Not Rated
    
    AA+
 17




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Capital Resources
    Statutory Accounting Practices and Risk-Based Capital (RBC)
   Commitments and Contingencies
  SuccessorLess Than
    
    One to
    
    Four to
    
    More Than(dollars in millions)
    
    One Year
    
    Three Years
    
    Five Years
    
    Five Years
    
    TotalPolicyholder liabilities (1)
    
    $
    26.6
    
    
    $
    45.2
    
    
    $
    33.6
    
    
    $
    165.3
    
    
    $
    270.7
 
 (1)
    
    The policyholder liabilities include benefit and claim liabilities of which a significant
portion represents policies and contracts that do not have a stated contractual maturity.
The projected cash benefit payments in the table above are based on managements best
estimates of the expected gross benefits and expenses, partially offset by the expected
gross premiums, fees and charges relating to the existing business inforce. Estimated cash
benefit payments are based on mortality and lapse assumptions comparable with MLLICNYs
historical experience, modified for recently observed trends. Actual payment obligations may
differ if experience varies from these assumptions. The cash benefit payments are presented
on an undiscounted basis and are before deduction of tax and before
reinsurance. The liability amounts in our Financial Statements reflect the discounting for
interest as well as adjustments for the timing of other factors as described above. As a
result, the sum of the cash benefit payments shown for all years in the table above exceeds
the corresponding policyholder liability amounts. 18




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##### 



Results of Operations
  
    
    the charges imposed on variable annuity and variable life insurance contracts, and
    
    the net earnings from investment of fixed rate life insurance and annuity contract owner
deposits less interest credited to contract owners, commonly known as interest spread
 Critical Accounting Policies
 2007 compared to 2006
   Predecessor
    
    
    PredecessorPolicy Charge Revenue
    
    2007
    
    
    2006
    
    
    Change(In Millions)Asset-based policy charge revenue
    
    $
    14.3
    
    
    $
    12.8
    
    
    $
    1.5
    (1)Guaranteed benefit based policy charge revenue
    
    
    1.2
    
    
    
    0.8
    
    
    
    0.4
    (2)Non-asset based policy charge revenue
    
    
    5.3
    
    
    
    6.0
    
    
    
    (0.7)
    (3)$
    20.8
    
    
    $
    19.6
    
    
    $
    1.2
 
 (1)
    
    Asset-based policy charge revenue was favorably impacted by the increase in
average variable account balances during 2007 as compared to 2006.(2)
    
    The increase in guaranteed benefit based policy charge revenue is due to the
increase in inforce variable annuity contracts containing guaranteed benefit riders.(3)
    
    The decrease in non-asset based policy charge revenue is primarily due to
unfavorable policy adjustments for certain variable life insurance contracts.   Predecessor
    
    
    PredecessorPolicy Benefits
    
    2007
    
    
    2006
    
    Change(In Millions)Variable annuity benefit expense
    
    $
    1.1
    
    
    $
    1.9
    
    
    $
    (0.8)
    (1)Variable annuity guaranteed
benefit reserve unlocking
    
    
    (1.2
    )
    
    
    (0.9
    )
    
    
    (0.3)
    (2)Life insurance benefit expense
    
    
    2.2
    
    
    
    1.6
    
    
    
    0.6
    (3)$
    2.1
    
    
    $
    2.6
    
    
    $
    (0.5
    )
 
 (1)
    
    The decrease in variable annuity benefit expense is primarily due to
decreased GMDB liability accumulations resulting from the application of the mean
reversion technique. In addition, GMWB liabilities were impacted by favorable market
valuation adjustments. See the Critical Accounting Policiessection above for a
further discussion of variable annuity guaranteed benefit liabilities.(2)
    
    See the Critical Accounting Policiessection above for a further discussion
of variable annuity benefit reserve unlocking.(3)
    
    The increase in life insurance benefit expense is primarily due to an
increase in the number of death claims and amounts per claim during the 2007 as
compared 2006. 19




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Critical Accounting Policies
  Predecessor
    
    
    PredecessorInsurance Expenses and Taxes - Net of Capitalization
    
    2007
    
    
    2006
    
    
    Change(In Millions)General insurance expenses
    
    $
    3.2
    
    
    $
    3.6
    
    
    $
    (0.4)
    (1)Taxes, licenses, and fees
    
    
    (0.2
    )
    
    
    0.1
    
    
    
    (0.3)
    (2)Commissions
    
    
    0.9
    
    
    
    0.7
    
    
    
    0.2$
    3.9
    
    
    $
    4.4
    
    
    $
    (0.5
    )
 
 (1)
    
    The decrease in general insurance expenses is primarily due to decreased
compensation and auditing expenses.(2)
    
    The decrease in taxes, licenses, and fees is primarily due to lower New York
State Franchise tax expense. 2006 compared to 2005
   Predecessor
    
    
    PredecessorPolicy Charge Revenue
    
    2006
    
    
    2005
    
    
    Change(In Millions)Asset-based policy charge revenue
    
    $
    12.8
    
    
    $
    12.0
    
    
    $
    0.8
    (1)Guaranteed benefit based policy charge revenue
    
    
    0.8
    
    
    
    0.4
    
    
    
    0.4
    (2)Non-asset based policy charge revenue
    
    
    6.0
    
    
    
    6.0
    
    
    
    $
    19.6
    
    
    $
    18.4
    
    
    $
    1.2
 
 (1)
    
    Asset-based policy charge revenue was favorably impacted by the increase in
average variable account balances during 2006 as compared to 2005.(2)
    
    The increase in guaranteed benefit based policy charge revenue is due to the
increase in inforce variable annuity contracts containing guaranteed benefit riders. 20




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Predecessor
    
    
    PredecessorInterest Spread
    
    2006
    
    
    2005
    
    
    Change(In Millions)Net investment income
    
    $
    11.5
    
    
    $
    11.3
    
    
    $
    0.2
    (1)Interest credited to
policyholder account
balances
    
    
    (7.8
    )
    
    
    (8.2
    )
    
    
    0.4
    (2)$
    3.7
    
    
    $
    3.1
    
    
    $
    0.6
 
 (1)
    
    Despite the reduction in fixed rate contracts inforce, net investment income
was favorably impacted by an increase in asset yields during 2006 as compared to 2005.(2)
    
    The decrease in interest credited is primarily due to the reduction of fixed
rate contracts inforce.  Critical Accounting Policies
  Critical Accounting
Policies
 Segment Information
  21




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Predecessor2007
    
    Annuities
    
    
    Life
    
    
    Other
    
    
    Total(Dollars In Millions)Net revenues (1)
    
    $
    16.1
    
    
    $
    7.3
    
    
    $
    2.1
    
    
    $
    25.5Net revenues  % of all segments
    
    
    63
    %
    
    
    29
    %
    
    
    8
    %
    
    
    100
    %Net earnings
    
    $
    7.3
    
    
    $
    1.9
    
    
    $
    1.4
    
    
    $
    10.6Net earnings  % of all segments
    
    
    69
    %
    
    
    18
    %
    
    
    13
    %
    
    
    100
    %
 Predecessor2006
    
    Annuities
    
    
    Life
    
    
    Other
    
    
    Total(Dollars In Millions)Net revenues (1)
    
    $
    13.6
    
    
    $
    8.2
    
    
    $
    1.4
    
    
    $
    23.2Net revenues  % of all segments
    
    
    59
    %
    
    
    35
    %
    
    
    6
    %
    
    
    100
    %Net earnings
    
    $
    4.8
    
    
    $
    1.9
    
    
    $
    0.9
    
    
    $
    7.6Net earnings  % of all segments
    
    
    63
    %
    
    
    25
    %
    
    
    12
    %
    
    
    100
    %
 Predecessor2005
    
    Annuities
    
    
    Life
    
    
    Other
    
    
    Total(Dollars In Millions)Net revenues (1)
    
    $
    13.9
    
    
    $
    8.4
    
    
    $
    1.0
    
    
    $
    23.3Net revenues  % of all segments
    
    
    60
    %
    
    
    36
    %
    
    
    4
    %
    
    
    100
    %Net earnings
    
    $
    2.8
    
    
    $
    2.1
    
    
    $
    0.6
    
    
    $
    5.5Net earnings  % of all segments
    
    
    51
    %
    
    
    38
    %
    
    
    11
    %
    
    
    100
    %
 
 (1)
    
    Management considers interest credited to policyholder liabilities in evaluating net
revenues.    Inflation
  22




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Item 7A. Quantitative and Qualitative Disclosures about Market Risk
 Market Risk
   Interest Rate Risk
   Change in Fair ValueSuccessor
    
    PredecessorChange in Interest Rates
    
    2007
    
    2006(In Millions)+ 100 Basis Points
    
    $
    (2.0
    )
    
    $
    (2.7
    )- 100 Basis Points
    
    $
    2.1
    
    
    $
    2.8
   Credit Spread Risk
  23




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Change in Fair ValueSuccessor
    
    PredecessorChange in Credit Spreads
    
    2007
    
    2006(In Millions)+ 50 Basis Points
    
    $
    (1.2
    )
    
    $
    (0.9
    )- 50 Basis Points
    
    $
    1.2
    
    
    $
    0.9
   Credit Risk
  Equity Price Risk
  
    
    Reductions in separate accounts assets. Asset-based policy fees collected on separate
accounts assets are a primary source of earnings, thus lower asset balances will result in
lower policy charge revenue and lower gross profits.
    
    Increased exposure to death and living benefits. Decreasing variable contract owner account
values increase the number of contracts, as well as amounts per contract, in which GMDB and
GMIB provisions exceed those variable contract owner account balances. This may result in
greater future policy benefit expense. Additionally, declines in the U.S. equity markets may
also increase MLLICNYs exposure to benefits under GMWB provisions. This provision can
generate volatility in earnings as the underlying embedded derivative liability is recorded at
fair value in response to changes in equity market conditions and policyholder behavior. This
may result in greater policy benefit expense.
    
    Potential hindrance of sales and marketing efforts for variable annuity products.
    
    One or any combination of the above items may lead to the revision of future assumptions
which may result in unfavorable DAC, VOBA, UPCR or variable annuity guaranteed benefit
liability unlocking.
 24




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Item 8. Financial Statements and Supplementary Data
  Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
     Item 9A(T). Controls and Procedures
     25




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##### 



Item 9B. Other Information
  PART III
  Item 14. Principal Account Fees and Services
 Fees Paid to the Registrants Independent Auditor
   Predecessor
    
    
    Predecessor2007
    
    
    2006Audit (a)
    
    $
    261,229
    
    
    $
    392,476Audit-Related (b)
    
    
    
    
    
    
    23,097Total
    
    $
    261,229
    
    
    $
    415,573
 
 (a)
    
    Audit fees consist of fees for the annual financial statement audit (including
required quarterly reviews) and other procedures required to be performed by the
independent auditor to be able to form an opinion on MLLICNYs financial statements.
These other procedures include information systems and procedural reviews and testing
performed in order to understand and place reliance on the systems of internal control,
and consultations relating the audit or quarterly review. They also include fees billed
for other audit services, which are those services that only the external auditor
reasonably can provide, and include statutory audits, comfort letters, services associated
with SEC registration statements, periodic reports and other documents filed with the SEC.(b)
    
    Audit-related fees consist of fees for audit-related services including assurance and
related services that are reasonably related to the performance of the audit or review of
MLLICNYs financial statements or that are traditionally performed by the independent
auditor. Audit-related services include, among others, due diligence services pertaining
to potential business acquisitions/dispositions; accounting consultations related to
accounting, financial reporting or disclosure matters not classified as Audit services;
assistance with understanding and implementing new accounting and financial reporting
guidance from rulemaking authorities; agreed-upon or expanded audit procedures related to
accounting and/or billing records required to respond to or comply with financial,
accounting or regulatory reporting matters; and assistance with internal control reporting
requirements. 26




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##### 



Audit Committee Pre-approval Policies and Procedures
      27




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##### 



PART IV

Item 15.  Exhibits and Financial Statement Schedules.

(a)  Financial Statements and Exhibits.

|    |  |                                                                                          
|--- |  | -----------------------------------------------------------------------------------------
|(1) |  | The following financial statements of the
Registrant are filed as part of this report:   
|a.  |  | Independent
Auditors Report dated March 14, 2008 (Ernst & Young LLP).                   
|b.  |  | Independent
Auditors Report dated March 2, 2007 (Deloitte & Touche LLP).                
|c.  |  | Balance Sheets at
December 31, 2007 and 2006.                                            
|d.  |  | Statements of Earnings for the Years Ended
December 31, 2007, 2006, and 2005.            
|e.  |  | Statements of Comprehensive Income for the
Years Ended December 31, 2007, 2006, and 2005.
|f.  |  | Statements of Stockholders Equity for the
Years Ended December 31, 2007, 2006, and 2005.
|g.  |  | Statements of Cash Flows for the Years Ended
December 31, 2007, 2006, and 2005.          
|h.  |  | Notes to Financial Statements for the Years
Ended December 31, 2007, 2006, and 2005.     
|(2) |  | Not applicable.                                                                          
|(3) |  | The following exhibits are filed as part of
this report as indicated below:              

28



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##### 



|    |  |                                                                                                                                                                                                                                                                                                   
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|3.1 |  | Certificate of Amendment of the Charter of ML Life
Insurance Company of New York. (Incorporated by reference
to Exhibit 6(a)(ii) to Post-Effective Amendment No. 10 to
ML of New York Variable Annuity Account As registration
statement on Form N-4, File No. 33-43654, filed December 9,
1996.)
|3.2 |  | By-Laws of ML Life Insurance Company of New York.
(Incorporated by reference to Exhibit 6(b) to
Post-Effective Amendment No. 10 to ML of New York Variable
Annuity Account As registration statement on Form N-4,
File No. 33-43654, filed December 9, 1996.)                                    
|4.1 |  | Modified Guaranteed Annuity Contract. (Incorporated by
reference to Exhibit 4(a) to Pre-Effective Amendment No. 1
to the Registrants registration statement on Form S-1,
File No. 33-34562, filed October 16, 1990.)                                                                             
|4.2 |  | Modified Guaranteed Annuity Contract Application.
(Incorporated by reference to Exhibit 4(b) to Pre-Effective
Amendment No. 1 to the Registrants registration statement
on Form S-1, File No. 33-34562, filed October 16, 1990.)                                                                 
|4.3 |  | Qualified Retirement Plan Endorsement. (Incorporated by
reference to Exhibit 4(c) to Pre-Effective Amendment No. 1
to the Registrants registration statement on Form S-1,
File No. 33-34562, filed October 16, 1990.)                                                                            
|4.4 |  | IRA Endorsement. (Incorporated by reference to Exhibit 4(d)
to Pre-Effective Amendment No. 1 to the Registrants
registration statement on Form S-1, File No. 33-34562,
filed October 16, 1990.)                                                                                                  
|4.5 |  | Company Name Change Endorsement. (Incorporated by reference
to Exhibit 4(e) to Post-Effective Amendment No. 3 to the
Registrants registration statement on Form S-1, File No.
33-34562, filed March 30, 1992.)                                                                                   
|4.6 |  | IRA Endorsement, MLNY009 (Incorporated by reference to
Exhibit 4(d)(2) to Post-Effective Amendment No. 1 to the
Registrants registration statement on Form S-1, File No.
33-60288, filed March 31, 1994).                                                                                        

29



---



##### 



|     |  |                                                                                                                                                                                                                                                                                                                                               
|---- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|4.7  |  | Modified Guaranteed Annuity Contract MLNY-AY-991/94.
(Incorporated by reference to Exhibit 4(a)(2) to
Post-Effective Amendment No. 3 to the Registrants
registration statement on Form S-1, File No. 33-60288,
filed December 7, 1994).                                                                                                      
|4.8  |  | Qualified Retirement Plan Endorsement MLNY-AYQ-991/94.
(Incorporation by reference to Exhibit 4(c)(2) to
Post-Effective Amendment No. 3 to the Registrants
registration statement on Form S-1, File No. 33-60288,
filed December 7, 1994).                                                                                                   
|10.1 |  | General Agency Agreement between Royal Tandem Life
Insurance Company and Merrill Lynch Life Agency Inc.
(Incorporated by reference to Exhibit 10(a) to
Pre-Effective Amendment No. 1 to the Registrants
registration statement on Form S-1, File No. 33-34562,
filed October 16, 1990.)                                                      
|10.2 |  | Investment Management Agreement by and between Royal Tandem
Life Insurance Company and Equitable Capital Management
Corporation. (Incorporated by reference to Exhibit 10(b) to
Pre-Effective Amendment No. 1 to the Registrants
registration statement on Form S-1, File No. 33-34562,
filed October 16, 1990.)                             
|10.3 |  | Shareholders Agreement by and among The Equitable Life
Assurance Society of the United States and Merrill Lynch & Co., Inc. and Tandem Financial Group, Inc. (Incorporated by
reference to Exhibit 10(c) to Pre-Effective Amendment No. 1
to the Registrants registration statement on Form S-1,
File No. 33-34562, filed October 16, 1990.)
|10.4 |  | Service Agreement by and between Royal Tandem Life
Insurance Company and Tandem Financial Group, Inc.
(Incorporated by reference to Exhibit 10(d) to
Pre-Effective Amendment No. 1 to the Registrants
registration statement on Form S-1, File No. 33-34562,
filed October 16, 1990.)                                                        
|10.5 |  | Service Agreement by and between Tandem Financial Group,
Inc. and Merrill Lynch & Co., Inc. (Incorporated by
reference to Exhibit 10(e) to Pre-Effective Amendment No. 1
to the Registrants registration statement on Form S-1,
File No. 33-34562, filed October 16, 1990.)                                                                  

30



---



##### 



|      |  |                                                                                                                                                                                                                                                                                                                                                                       
|----- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.6  |  | Form of Investment Management Agreement by and between
Royal Tandem Life Insurance Company and Merrill Lynch Asset
Management, Inc. (Incorporated by reference to Exhibit
10(f) to Post-Effective Amendment No. 1 to the Registrants
registration statement on Form S-1, File No. 33-34562,
filed March 7, 1991.)                                                    
|10.7  |  | Assumption Reinsurance Agreement between Merrill Lynch Life
Insurance Company, Tandem Insurance Group, Inc. and Royal
Tandem Life Insurance Company and Family Life Insurance
Company. (Incorporated by reference to Exhibit 10(g) to
Post-Effective Amendment No. 3 to the Registrants
registration statement on Form S-1, File No. 33-34562,
filed March 30, 1992.)
|10.8  |  | Indemnity Agreement between ML Life Insurance Company of
New York and Merrill Lynch Life Agency, Inc. (Incorporated
by reference to Exhibit 10(h) to Post-Effective Amendment
No. 3 to the Registrants registration statement on Form
S-1, File No. 33-34562, filed March 30, 1992.)                                                                                 
|10.9  |  | Amended General Agency Agreement between ML Life Insurance
Company of New York and Merrill Lynch Life Agency, Inc.
(Incorporated by reference to Exhibit 10(i) to
Post-Effective Amendment No. 3 to the Registrants
registration statement on Form S-1, File No. 33-34562,
filed March 30, 1992.)                                                                    
|10.10 |  | Amended Management Agreement between ML Life Insurance
Company of New York and Merrill Lynch Asset Management,
Inc. (Incorporated by reference to Exhibit 10(j) to the
Registrants registration statement on Form S-1, File No.
33-60288, filed March 30, 1993.)                                                                                                     
|10.11 |  | Mortgage Loan Servicing Agreement between ML Life Insurance
Company of New York and Merrill Lynch & Co., Inc.
(Incorporated by reference to Exhibit 10(k) to
Post-Effective Amendment No. 4 to the Registrants
registration statement on Form S-1, File No. 33-60288,
filed March 29, 1995.)                                                                         
|10.12 |  | Master Distribution Agreement between Merrill Lynch Insurance Group, Inc., Merrill
Lynch & Co., Inc., and AEGON USA, Inc. (Incorporated by reference to
Exhibit 10.2 to Registrants Current Report on Form 8-K, File No. 33-34562, filed
January 4, 2008.)                                                                                                           
|10.13 |  | Non-Affiliated Broker-Dealer Wholesaling Agreement between ML Life Insurance
Company of New York, Merrill Lynch, Pierce, Fenner & Smith Incorporated, and
Transamerica Capital, Inc. is filed herewith.                                                                                                                                                               
|10.14 |  | Selling Agreement between ML Life Insurance Company of New York, Merrill Lynch,
Pierce, Fenner & Smith Incorporated, and Merrill Lynch Life Agency, Inc. is filed
herewith.                                                                                                                                                                                           
|10.15 |  | Keep Well Agreement between AEGON USA And ML Life Insurance Company of New York is filed herewith.                                                                                                                                                                                                                                                                    
|10.16 |  | Purchase Agreement between Merrill Lynch Insurance Group, Inc., Merrill
Lynch & Co., Inc., and AEGON USA, Inc. (Incorporated by reference to Exhibit 10.1 to
Registrants Current Report on Form 8-K, File No. 33-34562, filed August 17, 2007.)                                                                                                                      
|10.17 |  | First Amendment to Purchase Agreement between Merrill Lynch
Insurance Group, Inc., Merrill Lynch & Co., Inc., and AEGON USA,
Inc. (Incorporated by reference to Exhibit 10.1 to Registrants Current
Report on Form 8-K, File No. 33-34562, filed January 4, 2008.)                                                                                                   
|23.1  |  | Written Consent of Deloitte & Touche LLP, independent
registered public accounting firm, is filed herewith.                                                                                                                                                                                                                                                           
|23.2  |  | Written Consent of Ernst & Young LLP, independent
registered public accounting firm, is filed herewith.                                                                                                                                                                                                                                                               
|24.1  |  | Powers of attorney are filed herewith.                                                                                                                                                                                                                                                                                                                                

31



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##### 



|     |  |                                                                                                                                                                                            
|---- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|31.1 |  | Certification by the Chief Executive Officer of the Registrant
pursuant to Rule 15d-14(a), is filed herewith.                                                                              
|31.2 |  | Certification by the Chief Financial Officer of the Registrant
pursuant to Rule 15d-14(a), is filed herewith.                                                                              
|32.1 |  | Certification by the Chief Executive Officer of the
Registrant pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002, is filed herewith.
|32.2 |  | Certification by the Chief Financial Officer of the
Registrant pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002,
is filed herewith.

32



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##### 



INDEX TO FINANCIAL STATEMENTS

|                                                                                       
|---------------------------------------------------------------------------------------
|Independent Auditors Reports                                                          
|Balance
Sheets at December 31, 2007 and 2006                                           
|Statements
of Earnings for the Years Ended December 31, 2007, 2006 and 2005            
|Statements
of Comprehensive Income for the Years Ended December 31, 2007, 2006 and 2005
|Statements
of Stockholders Equity for the Years Ended December 31,
2007, 2006 and 2005
|Statements
of Cash Flows for the Years Ended December 31, 2007, 2006 and 2005          
|Notes
to Financial Statements for the Years Ended December 31, 2007, 2006 and 2005     





---



##### 



[Ernst & Young LLP]
 Report of Independent Registered Public Accounting Firm




---



##### 



[Deloitte & Touche LLP]
 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM




---



##### 



ML Life Insurance Company of New York
(a wholly owned subsidiary of AEGON USA, Inc.)
Balance Sheets
 Successor
    
    
    
    PredecessorDecember 31,
    
    
    
    December 31,(dollars in thousands)
    
    2007
    
    
    
    2006ASSETSInvestmentsFixed maturity available-for-sale securities, at estimated fair value
    
    $
    100,231
    
    
    
    $
    132,440Equity available-for-sale securities, at estimated fair value
    
    
    1,126
    
    
    
    
    1,386Policy loans on insurance contracts, at outstanding loan balances
    
    
    69,165
    
    
    
    
    72,779170,522
    
    
    
    
    206,605Cash and Cash Equivalents
    
    
    60,406
    
    
    
    
    35,952Accrued Investment Income
    
    
    2,866
    
    
    
    
    3,622Deferred Policy Acquisition Costs
    
    
    
    
    
    
    
    22,485Deferred Sales Inducements
    
    
    
    
    
    
    
    1,840Value of Business Acquired
    
    
    44,024
    
    
    
    
    Other Intangibles
    
    
    8,330
    
    
    
    
    Goodwill
    
    
    6,882
    
    
    
    
    Federal Income Taxes  Current
    
    
    836
    
    
    
    
    Other Assets
    
    
    6,125
    
    
    
    
    8,027Separate Accounts Assets
    
    
    925,828
    
    
    
    
    970,012Total Assets
    
    $
    1,225,819
    
    
    
    $
    1,248,543
 See Notes to Financial Statements.
    
    (Continued)
 1




---



##### 



ML Life Insurance Company of New York
(a wholly owned subsidiary of AEGON USA, Inc.)
Balance Sheets
 Successor
    
    
    
    PredecessorDecember 31,
    
    
    
    December 31,(dollars in thousands, except common stock par value and shares)
    
    2007
    
    
    
    2006LIABILITIESPolicyholder Liabilities and AccrualsPolicyholder account balances
    
    $
    140,782
    
    
    
    $
    152,840Future policy benefits
    
    
    22,764
    
    
    
    
    22,326Claims and claims settlement expenses
    
    
    4,618
    
    
    
    
    8,501168,164
    
    
    
    
    183,667Other Policyholder Funds
    
    
    989
    
    
    
    
    679Federal Income Taxes  Deferred
    
    
    
    
    
    
    
    2,089Federal Income Taxes  Current
    
    
    
    
    
    
    
    1,064Affiliated Payables  Net
    
    
    
    
    
    
    
    1,417Other Liabilities
    
    
    
    
    
    
    
    1,849Separate Accounts Liabilities
    
    
    925,828
    
    
    
    
    970,012Total Liabilities
    
    
    1,094,981
    
    
    
    
    1,160,777STOCKHOLDERS EQUITYCommon stock ($10 par value; 220,000 shares authorized,
issued
and outstanding)
    
    
    2,200
    
    
    
    
    2,200Additional paid-in capital
    
    
    128,638
    
    
    
    
    52,310Accumulated other comprehensive loss, net of taxes
    
    
    
    
    
    
    
    (753
    )Retained earnings
    
    
    
    
    
    
    
    34,009Total Stockholders Equity
    
    
    130,838
    
    
    
    
    87,766Total Liabilities and Stockholders Equity
    
    $
    1,225,819
    
    
    
    $
    1,248,543
  2




---



##### 



ML Life Insurance Company of New York
(a wholly owned subsidiary of AEGON USA, Inc.)
Statements of Earnings
 Predecessor
    
    
    Predecessor
    
    
    Predecessor(dollars in thousands)
    
    For the Years Ended December 31,2007
    
    
    2006
    
    
    2005Net RevenuesPolicy charge revenue
    
    $
    20,782
    
    
    $
    19,577
    
    
    $
    18,431Net investment income
    
    
    11,246
    
    
    
    11,523
    
    
    
    11,275Net realized investment gains (loss)
    
    
    1,141
    
    
    
    (71
    )
    
    
    1,799Total Net Revenues
    
    
    33,169
    
    
    
    31,029
    
    
    
    31,505Benefits and ExpensesInterest credited to policyholder liabilities
    
    
    7,643
    
    
    
    7,823
    
    
    
    8,216Policy benefits (net of reinsurance recoveries: 2007 -
$1,846; 2006 - $1,219; 2005 - $98)
    
    
    2,069
    
    
    
    2,608
    
    
    
    2,501Reinsurance premium ceded
    
    
    1,872
    
    
    
    1,915
    
    
    
    1,845Amortization of deferred policy acquisition costs
    
    
    2,184
    
    
    
    3,269
    
    
    
    7,005Insurance expenses and taxes
    
    
    3,942
    
    
    
    4,424
    
    
    
    4,699Total Benefits and Expenses
    
    
    17,710
    
    
    
    20,039
    
    
    
    24,266Earnings Before Federal Income Taxes
    
    
    15,459
    
    
    
    10,990
    
    
    
    7,239Federal Income Tax Expense (Benefit)Current
    
    
    3,786
    
    
    
    3,656
    
    
    
    2,585Deferred
    
    
    1,062
    
    
    
    (230
    )
    
    
    (814
    )Total Federal Income Tax Expense
    
    
    4,848
    
    
    
    3,426
    
    
    
    1,771Net Earnings
    
    $
    10,611
    
    
    $
    7,564
    
    
    $
    5,468
  3




---



##### 



ML Life Insurance Company of New York
(a wholly owned subsidiary of AEGON USA, Inc.)
Statements of Comprehensive Income
 Predecessor
    
    
    Predecessor
    
    
    Predecessor(dollars in thousands)
    
    For the Years Ended December 31,2007
    
    
    2006
    
    
    2005Net Earnings
    
    $
    10,611
    
    
    $
    7,564
    
    
    $
    5,468Other Comprehensive Income (Loss)Net unrealized gains (losses) on available-for-sale securities:Net unrealized holding gains (losses) arising during the period
    
    
    499
    
    
    
    509
    
    
    
    (1,474
    )Reclassification adjustment for gains included in net earnings
    
    
    (2
    )
    
    
    (71
    )
    
    
    (1,799
    )497
    
    
    
    438
    
    
    
    (3,273
    )Adjustments for policyholder liabilities
    
    
    (20
    )
    
    
    214
    
    
    
    512Adjustments for deferred federal income taxes
    
    
    (167
    )
    
    
    (228
    )
    
    
    966(187
    )
    
    
    (14
    )
    
    
    1,478Total other comprehensive income (loss), net of taxes
    
    
    310
    
    
    
    424
    
    
    
    (1,795
    )Comprehensive Income
    
    $
    10,921
    
    
    $
    7,988
    
    
    $
    3,673
  4




---



##### 



ML Life Insurance Company of New York
(a wholly owned subsidiary of AEGON USA, Inc.)
Statements of Stockholders Equity
 AccumulatedAdditional
    
    
    other
    
    
    
    
    
    
    TotalCommon
    
    
    paid-in
    
    
    comprehensive
    
    
    Retained
    
    
    stockholders(dollars in thousands)
    
    stock
    
    
    capital
    
    
    income (loss)
    
    
    earnings
    
    
    equityBalance, January 1, 2005 (Predecessor)
    
    $
    2,200
    
    
    
    52,310
    
    
    
    618
    
    
    
    25,088
    
    
    $
    80,216Net earnings
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,468
    
    
    
    5,468Other comprehensive loss, net of taxes
    
    
    
    
    
    
    
    
    
    
    (1,795
    )
    
    
    
    
    
    
    (1,795
    )Balance, December 31, 2005 (Predecessor)
    
    
    2,200
    
    
    
    52,310
    
    
    
    (1,177
    )
    
    
    30,556
    
    
    
    83,889Net earnings
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    7,564
    
    
    
    7,564Cash dividend paid to Merrill Lynch Insurance
Group, Inc.
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (4,111
    )
    
    
    (4,111
    )Other comprehensive income, net of taxes
    
    
    
    
    
    
    
    
    
    
    424
    
    
    
    
    
    
    
    424Balance, December 31, 2006 (Predecessor)
    
    
    2,200
    
    
    
    52,310
    
    
    
    (753
    )
    
    
    34,009
    
    
    
    87,766Net earnings
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    10,611
    
    
    
    10,611Cash dividend paid to Merrill Lynch Insurance
Group, Inc.
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (5,453
    )
    
    
    (5,453
    )Other comprehensive income, net of taxes
    
    
    
    
    
    
    
    
    
    
    310
    
    
    
    
    
    
    
    310Balance, at date of acquisition (Predecessor)
    
    
    2,200
    
    
    
    52,310
    
    
    
    (443
    )
    
    
    39,167
    
    
    
    93,234Effect of pushdown accounting of AEGON USA, Inc.s
purchase price on ML Life Insurance Company
of New Yorks net assets acquired (see Note 3)
    
    
    
    
    
    
    76,328
    
    
    
    443
    
    
    
    (39,167
    )
    
    
    37,604Balance, December 31, 2007 (Successor)
    
    $
    2,200
    
    
    $
    128,638
    
    
    $
    
    
    
    $
    
    
    
    $
    130,838
  5




---



##### 



ML Life Insurance Company of New York
(a wholly owned subsidiary of AEGON USA, Inc.)
Statements of Cash Flows
 Predecessor
    
    
    Predecessor
    
    
    Predecessor(dollars in thousands)
    
    For the Years Ended December 31,2007
    
    
    2006
    
    
    2005Cash Flows From Operating Activities:Net earnings
    
    $
    10,611
    
    
    $
    7,564
    
    
    $
    5,468Noncash items included in earnings:Amortization of deferred policy acquisition costs
    
    
    2,184
    
    
    
    3,269
    
    
    
    7,005Capitalization of policy acquisition costs
    
    
    (1,751
    )
    
    
    (2,716
    )
    
    
    (1,911
    )Amortization of deferred sales inducements
    
    
    157
    
    
    
    63
    
    
    
    (28
    )Capitalization of sales inducements
    
    
    (714
    )
    
    
    (1,302
    )
    
    
    (573
    )Amortization of investments
    
    
    238
    
    
    
    603
    
    
    
    821Interest credited to policyholder liabilities
    
    
    7,643
    
    
    
    7,823
    
    
    
    8,216Change in guaranteed benefit liabilities
    
    
    (592
    )
    
    
    56
    
    
    
    285Deferred federal income tax expense (benefit)
    
    
    1,062
    
    
    
    (230
    )
    
    
    (814
    )(Increase) decrease in operating assets:Accrued investment income
    
    
    756
    
    
    
    312
    
    
    
    (15
    )All other assets  net
    
    
    1,015
    
    
    
    (4,255
    )
    
    
    2,206Increase (decrease) in operating liabilities:Claims and claims settlement expenses
    
    
    (3,883
    )
    
    
    5,172
    
    
    
    (1,936
    )Other policyholder funds
    
    
    310
    
    
    
    415
    
    
    
    (835
    )All other liabilities  net
    
    
    (4,330
    )
    
    
    (44
    )
    
    
    1,283Other operating activities:Net realized investment (gains) losses
    
    
    (1,141
    )
    
    
    71
    
    
    
    (1,799
    )Net cash and cash equivalents provided by operating activities
    
    
    11,565
    
    
    
    16,801
    
    
    
    17,373Cash Flows From Investing Activities:Proceeds from (payments for):Sales of available-for-sale securities
    
    
    12,210
    
    
    
    22,173
    
    
    
    36,283Maturities of available-for-sale securities
    
    
    41,362
    
    
    
    41,403
    
    
    
    13,182Purchases of available-for-sale securities
    
    
    (19,808
    )
    
    
    (32,653
    )
    
    
    (36,992
    )Policy loans on insurance contracts  net
    
    
    3,614
    
    
    
    1,614
    
    
    
    2,357Net cash and cash equivalents provided by investing activities
    
    
    37,378
    
    
    
    32,537
    
    
    
    14,830
 See Notes to Financial Statements.
    
    (Continued)
 6




---



##### 



ML Life Insurance Company of New York
(a wholly owned subsidiary of AEGON USA, Inc.)
Statements of Cash Flows
 Predecessor
    
    
    Predecessor
    
    
    Predecessor(dollars in thousands)
    
    For the Years Ended December 31,2007
    
    
    2006
    
    
    2005Cash Flows From Financing Activities:Cash dividend paid to Merrill Lynch Insurance Group, Inc.
    
    $
    (5,453
    )
    
    $
    (4,111
    )
    
    $
    Policyholder deposits (excludes internal policy replacement deposits)
    
    
    32,544
    
    
    
    52,072
    
    
    
    35,439Policyholder withdrawals (including transfers from separate accounts)
    
    
    (51,580
    )
    
    
    (75,997
    )
    
    
    (59,641
    )Net cash and cash equivalents used in financing activities
    
    
    (24,489
    )
    
    
    (28,036
    )
    
    
    (24,202
    )Net increase in cash and cash equivalents
    
    
    24,454
    
    
    
    21,302
    
    
    
    8,001Cash and cash equivalents, beginning of year
    
    
    35,952
    
    
    
    14,650
    
    
    
    6,649Cash and cash equivalents, end of year
    
    $
    60,406
    
    
    $
    35,952
    
    
    $
    14,650Supplementary Disclosure of Cash Flow Information:Cash paid for:Federal income taxes
    
    $
    5,686
    
    
    $
    3,234
    
    
    $
    2,677Interest
    
    
    74
    
    
    
    179
    
    
    
    67
  7




---



##### 



ML Life Insurance Company of New York
(a wholly owned subsidiary of AEGON USA, Inc.)
Notes to Financial Statements
(Dollars in Thousands)
 Note 1. Acquisition of ML Life Insurance Company of New York by AEGON USA, Inc.
  Note 2. Summary of Significant Accounting Policies
 Description of Business
  Basis of Reporting
  Business Combinations Goodwill and Other Intangibles
 Push Down Basis of Accounting in Financial Statements of a Subsidiary
  Accounting Estimates and Assumptions
  8




---



##### 



Revenue Recognition
    Investments
       9




---



##### 



Cash and Cash Equivalents
  Deferred Policy Acquisition Costs (DAC)
     Deferred Sales Inducements (DSI)
    Value of Business Acquired (VOBA)
  10




---



##### 



Other Intangibles
  Goodwill
 Goodwill and Other Intangible Assets"
 Separate Accounts
   Policyholder Account Balances
  Interest-sensitive life products
    
    4.00%Interest-sensitive deferred annuities
    
    3.00% - 6.80%
  Future Policy Benefits
  11




---



##### 



Successor
    
    PredecessorInterest rates used for liabilities
    
    2.55%  5.50%
    
    3.00%  8.80%
 Claims and Claims Settlement Expenses
  Federal Income Taxes
  Accounting for Income Taxes.
   Recent Accounting Pronouncements
 Business Combinations Business Combinations
 Noncontrolling Interests in Consolidated Financial
Statements Consolidated
Financial Statements
 12




---



##### 



The Fair Value Option for Financial Assets and
Financial Liabilities. Fair Value
Measurements.
 Accounting by Insurance
Enterprises for Deferred Acquisition Costs in Connection With Modifications or Exchanges of
Insurance Contracts.
 Fair Value Measurements.
 Accounting for Uncertainty in Income Taxes, an
Interpretation of FASB Statement No. 109
 Note 3. Purchase Price Allocation and Goodwill  Preliminary
    13




---



##### 



SuccessorTotal Purchase Price
    
    
    
    
    
    $
    1,249,974Purchase price allocated to MLLIC
    
    
    
    
    
    
    1,119,136Purchase price allocated to the Company
    
    
    
    
    
    
    130,838Net Assets acquired prior to purchase accounting
adjustments
    
    $
    93,234Adjustments to reflect assets acquired at fair value:Fixed maturity available-for-sale securities
    
    
    (112
    )Equity available-for-sale securities
    
    
    7Elimination of historical DAC
    
    
    (22,052
    )Elimination of historical DSI
    
    
    (2,397
    )VOBA
    
    
    44,024Value of distribution agreements acquired
    
    
    5,920Value of non-compete intangible acquired
    
    
    1,380Value of tradename intangible acquired
    
    
    1,030Federal income taxes  deferred
    
    
    3,318Other assets
    
    
    (51
    )Adjustments to reflect liabilities assumed at fair value:Policyholder account balances
    
    
    21Future policy benefits
    
    
    (366
    )Net Fair Value of Assets Acquired and Liabilities Assumed
    
    
    
    
    
    
    123,956Goodwill Resulting from the Acquisition
    
    
    
    
    
    $
    6,882
  Other Intangible Assets
   14




---



##### 



SuccessorVOBA
    
    $
    44,024Value of distribution agreement acquired
    
    
    5,920Value of non-compete intangible acquired
    
    
    1,380Value of tradename intangible acquired
    
    
    1,030Total value of amortizable intangible assets acquired, excluding goodwill
    
    $
    52,354
  Successor2008
    
    $
    3,9632009
    
    $
    3,8812010
    
    $
    3,8992011
    
    $
    3,8802012
    
    $
    3,636
 Note 4. Estimated Fair Value of Financial Instruments
 Estimated Fair Value
   Predecessor2006Assets:Fixed maturity securities
    
    $
    132,440Equity securities
    
    
    1,386Policy loans on insurance contracts
    
    
    72,779Cash and cash equivalents
    
    
    35,952Separate accounts assets
    
    
    970,012Total assets
    
    $
    1,212,569Liabilities:Policyholder account balances (1)
    
    $
    152,840Separate accounts liabilities
    
    
    970,012Total liabilities
    
    $
    1,122,852
 15




---



##### 



(1)
    
    The Company records certain adjustments to policyholder account balances in conjunction
with the unrealized holding gains or losses on investments classified as available-for-sale.
The Company adjusts a portion of these liabilities as if the unrealized holding gains or
losses had actually been realized, with corresponding credits or charges reported in
accumulated other comprehensive loss, net of taxes.  Successor2007EstimatedFairValue (1)Fixed maturity securities:Corporate debt securities
    
    $
    73,852Mortgage-backed securities and other asset backed securities
    
    
    13,701U.S. Government and agencies
    
    
    8,877Foreign governments
    
    
    3,801Total fixed maturity securities
    
    $
    100,231Equity securities:Preferred stocks
    
    $
    1,126
 
 (1)
    
    In accordance with push-down accounting, cost /amortized cost were equal to estimated fair
value at December 31, 2007. Predecessor2006Cost/
    
    
    Gross
    
    
    Gross
    
    
    EstimatedAmortized
    
    
    Unrealized
    
    
    Unrealized
    
    
    FairCost
    
    
    Gains
    
    
    Losses
    
    
    ValueFixed maturity securities:Corporate debt securities
    
    $
    116,328
    
    
    $
    630
    
    
    $
    1,622
    
    
    $
    115,336Mortgage-backed securities and
other asset backed securities
    
    
    7,083
    
    
    
    25
    
    
    
    38
    
    
    
    7,070U.S. Government and agencies
    
    
    6,217
    
    
    
    105
    
    
    
    4
    
    
    
    6,318Foreign governments
    
    
    3,499
    
    
    
    254
    
    
    
    37
    
    
    
    3,716Total fixed maturity securities
    
    $
    133,127
    
    
    $
    1,014
    
    
    $
    1,701
    
    
    $
    132,440Equity securities:Preferred stocks
    
    $
    1,382
    
    
    $
    8
    
    
    $
    4
    
    
    $
    1,386
  16




---



##### 



Predecessor2006Less than 12 months
    
    
    More than 12 Months
    
    
    TotalEstimated
    
    
    
    
    
    
    Estimated
    
    
    
    
    
    
    EstimatedFair
    
    
    Unrealized
    
    
    Fair
    
    
    Unrealized
    
    
    Fair
    
    
    UnrealizedValue
    
    
    Losses
    
    
    Value
    
    
    Losses
    
    
    Value
    
    
    LossesFixed maturity securities:Corporate debt securities
    
    $
    11,126
    
    
    $
    52
    
    
    $
    73,477
    
    
    $
    1,570
    
    
    $
    84,603
    
    
    $
    1,622Mortgage-backed securities and
other asset backed securities
    
    
    156
    
    
    
    
    
    
    
    2,115
    
    
    
    38
    
    
    
    2,271
    
    
    
    38Foreign governments
    
    
    
    
    
    
    
    
    
    
    1,462
    
    
    
    37
    
    
    
    1,462
    
    
    
    37U.S. Government and agencies
    
    
    1,194
    
    
    
    4
    
    
    
    
    
    
    
    
    
    
    
    1,194
    
    
    
    4Equity securities:Preferred stocks
    
    
    965
    
    
    
    4
    
    
    
    
    
    
    
    
    
    
    
    965
    
    
    
    4Total temporarily impaired securities
    
    $
    13,441
    
    
    $
    60
    
    
    $
    77,054
    
    
    $
    1,645
    
    
    $
    90,495
    
    
    $
    1,705
    Successor2007EstimatedFairValue (1)Fixed maturity securities:Due in one year or less
    
    $
    35,520Due after one year through five years
    
    
    34,794Due after five years through ten years
    
    
    9,804Due after ten years
    
    
    6,41286,530Mortgage-backed securities and other asset backed securities
    
    
    13,701Total fixed maturity securities
    
    $
    100,231
 
 (1)
    
    In accordance with push-down accounting, cost /amortized cost were equal to estimated fair
value at December 31, 2007. 17




---



##### 



Predecessor2006EstimatedAmortized
    
    
    FairCost
    
    
    ValueFixed maturity securities:Due in one year or less
    
    $
    32,843
    
    
    $
    32,654Due after one year through five years
    
    
    71,574
    
    
    
    70,434Due after five years through ten years
    
    
    14,235
    
    
    
    14,324Due after ten years
    
    
    7,392
    
    
    
    7,958126,044
    
    
    
    125,370Mortgage-backed securities and other asset backed securities
    
    
    7,083
    
    
    
    7,070Total fixed maturity securities
    
    $
    133,127
    
    
    $
    132,440
   Successor2007EstimatedFairValue (1)AAA
    
    $
    27,043AA
    
    
    19,529A
    
    
    35,201BBB
    
    
    17,528Below investment grade
    
    
    930Total fixed maturity securities
    
    $
    100,231Investment grade
    
    
    99
    %Below investment grade
    
    
    1
    %
 
 (1)
    
    In accordance with push-down accounting, cost /amortized cost were equal to estimated fair
value at December 31, 2007. 18




---



##### 



Predecessor2006EstimatedAmortized
    
    
    FairCost
    
    
    ValueAAA
    
    $
    32,191
    
    
    $
    32,209AA
    
    
    29,013
    
    
    
    28,882A
    
    
    45,625
    
    
    
    45,285BBB
    
    
    26,298
    
    
    
    26,064Below investment grade
    
    
    
    
    
    
    Total fixed maturity securities
    
    $
    133,127
    
    
    $
    132,440Investment grade
    
    
    100
    %
    
    
    100
    %Below investment grade
    
    
    0
    %
    
    
    0
    %
    Predecessor2006Assets:Fixed maturity securities
    
    $
    (687
    )Equity securities
    
    
    4(683
    )Liabilities:Policyholder account balances
    
    
    476Federal income taxes  deferred
    
    
    (406
    )70Stockholder equity:Accumulated other comprehensive loss, net of taxes
    
    $
    (753
    )
   Predecessor
    
    Predecessor
    
    Predecessor2007
    
    2006
    
    2005Proceeds
    
    $
    12,210
    
    
    $
    22,173
    
    
    $
    36,283Gross realized investment gains
    
    
    1,268
    
    
    
    89
    
    
    
    2,114Gross realized investment losses
    
    
    127
    
    
    
    160
    
    
    
    315
 19




---



##### 



Predecessor
    
    
    Predecessor
    
    
    Predecessor2007
    
    
    2006
    
    
    2005Fixed maturity securities
    
    $
    5,727
    
    
    $
    6,930
    
    
    $
    7,411Policy loans on insurance contracts
    
    
    3,385
    
    
    
    3,560
    
    
    
    3,679Cash and cash equivalents
    
    
    2,300
    
    
    
    1,397
    
    
    
    480Equity securities
    
    
    71
    
    
    
    53
    
    
    
    17Other
    
    
    12
    
    
    
    (20
    )
    
    
    Gross investment income
    
    
    11,495
    
    
    
    11,920
    
    
    
    11,587Less investment expenses
    
    
    (249
    )
    
    
    (397
    )
    
    
    (312
    )Net investment income
    
    $
    11,246
    
    
    $
    11,523
    
    
    $
    11,275
  Predecessor
    
    
    Predecessor
    
    
    Predecessor2007
    
    
    2006
    
    
    2005Fixed maturity securities
    
    $
    1,141
    
    
    $
    (71
    )
    
    $
    1,799
 Note 5. DAC and DSI
  Predecessor
    
    
    Predecessor
    
    
    Predecessor2007
    
    
    2006
    
    
    2005Normal amortization related to variable life and annuity insurance products
    
    $
    4,009
    
    
    $
    4,180
    
    
    $
    3,820Unlocking related to variable life insurance products
    
    
    (1,340
    )
    
    
    (267
    )
    
    
    (157
    )Unlocking related to variable annuity insurance products
    
    
    (485
    )
    
    
    (644
    )
    
    
    3,342Total amortization of DAC
    
    $
    2,184
    
    
    $
    3,269
    
    
    $
    7,005
   20




---



##### 



DSI
  Predecessor
    
    
    Predecessor
    
    
    Predecessor2007
    
    
    2006
    
    
    2005Amortization
    
    $
    (182
    )
    
    $
    (35
    )
    
    $
    28Unlocking
    
    
    25
    
    
    
    (28
    )
    
    
    Total amortization of DSI
    
    $
    (157
    )
    
    $
    (63
    )
    
    $
    28
  Note 6. Variable Contracts Containing Guaranteed Benefits
 Variable Annuity Contracts Containing Guaranteed Benefits
  
    
    In general, contracts containing GMDB provisions provide a death benefit equal to the
greater of the GMDB or the contract value. Depending on the type of contract, the GMDB may
equal: i) contract deposits accumulated at a specified interest rate, ii) the contract
value on specified contract anniversaries, iii) return of contract deposits, or iv) some
combination of these benefits. Each benefit type is reduced for contract withdrawals.
    
    In general, contracts containing GMIB provisions provide the option to receive a
guaranteed future income stream upon annuitization. There is a waiting period of ten years
that must elapse before the GMIB provision can be exercised.
    
    Contracts containing GMWB provisions provide the contract owner the ability to withdraw
minimum annual payments, regardless of the impact of market performance on the contract
owners account value. In general, withdrawal percentages are based on the contract
owners age at the time of the first withdrawal. The Company began offering the GMWB
benefit provision in the first quarter 2006.
  Successor
    
    Predecessor2007
    
    2006GMDB
    
    GMIB
    
    GMWB
    
    GMDB
    
    GMIB
    
    GMWBNet amount at risk (1)
    
    $
    23,456
    
    
    $
    1,090
    
    
    $
    24
    
    
    $
    27,959
    
    
    $
    84
    
    
    $
    Average attained age of contract
owners
    
    
    68
    
    
    
    61
    
    
    
    72
    
    
    
    68
    
    
    
    60
    
    
    
    72Weighted average period remaining
until expected annuitization
    
    
    n/a
    
    
    7.0 yrs
    
    
    n/a
    
    
    
    n/a
    
    
    7.9 yrs
    
    
    n/a
 
 (1)
    
    Net amount at risk for GMDB is defined as the current GMDB in excess of the
contract owners account balance at the balance sheet date.  21




---



##### 



GMDB
    
    
    GMIBBalance at January 1, 2006 (Predecessor)
    
    $
    3,083
    
    
    $
    76Guaranteed benefits incurred
    
    
    1,277
    
    
    
    (192
    )Guaranteed benefits paid
    
    
    (855
    )
    
    
    Unlocking
    
    
    (669
    )
    
    
    163Balance at December 31, 2006 (Predecessor)
    
    
    2,836
    
    
    
    47Guaranteed benefits incurred
    
    
    1,139
    
    
    
    34Guaranteed benefits paid
    
    
    (323
    )
    
    
    Unlocking
    
    
    (1,191
    )
    
    
    20Push-down accounting adjustment (see Note 3)
    
    
    (240
    )
    
    
    (101
    )Balance at December 31, 2007 (Successor)
    
    $
    2,221
    
    
    $
    
  Accounting for Derivative Instruments and Hedging Activities
  GMIBGMWB
    
    
    ReinsuranceBalance at December 31, 2006 (Predecessor)
    
    $
    
    
    
    $
    318Changes in fair value
    
    
    (339
    )
    
    
    55Push-down accounting adjustment (see Note 3)
    
    
    934
    
    
    
    (768
    )Balance at December 31, 2007 (Successor)
    
    $
    595
    
    
    $
    (395
    )
 22




---



##### 



Successor2007MoneyEquity
    
    
    Bond
    
    
    Balanced
    
    
    Market
    
    
    Other
    
    
    TotalGMDB only
    
    $
    291,825
    
    
    
    84,448
    
    
    
    55,742
    
    
    
    19,498
    
    
    
    255
    
    
    $
    451,768GMDB and GMIB
    
    
    116,853
    
    
    
    26,682
    
    
    
    28,442
    
    
    
    3,318
    
    
    
    1,586
    
    
    
    176,881GMWB only
    
    
    14,247
    
    
    
    3,182
    
    
    
    3,437
    
    
    
    184
    
    
    
    497
    
    
    
    21,547GMDB and GMWB
    
    
    12,903
    
    
    
    2,690
    
    
    
    3,993
    
    
    
    17
    
    
    
    341
    
    
    
    19,944GMIB only
    
    
    6,212
    
    
    
    995
    
    
    
    1,086
    
    
    
    
    
    
    
    151
    
    
    
    8,444No guaranteed benefit
    
    
    3,078
    
    
    
    462
    
    
    
    470
    
    
    
    191
    
    
    
    101
    
    
    
    4,302Total
    
    $
    445,118
    
    
    
    118,459
    
    
    
    93,170
    
    
    
    23,208
    
    
    
    2,931
    
    
    $
    682,886
 Predecessor2006MoneyEquity
    
    
    Bond
    
    
    Balanced
    
    
    Market
    
    
    Other
    
    
    TotalGMDB only
    
    $
    343,921
    
    
    
    100,346
    
    
    
    56,066
    
    
    
    19,417
    
    
    
    253
    
    
    $
    520,003GMDB and GMIB
    
    
    110,333
    
    
    
    24,795
    
    
    
    21,938
    
    
    
    3,179
    
    
    
    1,287
    
    
    
    161,532GMDB and GMWB
    
    
    7,083
    
    
    
    1,771
    
    
    
    2,469
    
    
    
    16
    
    
    
    298
    
    
    
    11,637GMWB only
    
    
    7,233
    
    
    
    1,903
    
    
    
    1,713
    
    
    
    57
    
    
    
    370
    
    
    
    11,276GMIB only
    
    
    4,750
    
    
    
    809
    
    
    
    534
    
    
    
    
    
    
    
    106
    
    
    
    6,199No guaranteed benefit
    
    
    2,271
    
    
    
    372
    
    
    
    366
    
    
    
    
    
    
    
    89
    
    
    
    3,098Total
    
    $
    475,591
    
    
    
    129,996
    
    
    
    83,086
    
    
    
    22,669
    
    
    
    2,403
    
    
    $
    713,745
 Variable Life Contracts Containing Guaranteed Benefits
    23




---



##### 



GMDBBalance at January 1, 2006 (Predecessor)
    
    $
    205Guaranteed benefits incurred
    
    
    14Guaranteed benefits paid
    
    
    Balance at December 31, 2006 (Predecessor)
    
    
    219Guaranteed benefits incurred
    
    
    13Guaranteed benefits paid
    
    
    Push-down accounting adjustment (see Note 3)
    
    
    (232
    )Balance at December 31, 2007 (Successor)
    
    $
    
  Successor
    
    
    Predecessor2007
    
    
    2006Balanced
    
    $
    105,742
    
    
    $
    108,938Equity
    
    
    78,332
    
    
    
    82,920Bond
    
    
    29,471
    
    
    
    32,903Money Market
    
    
    29,397
    
    
    
    31,506Total
    
    $
    242,942
    
    
    $
    256,267
 Note 7. Federal Income Taxes
  Predecessor
    
    
    Predecessor
    
    
    Predecessor2007
    
    
    2006
    
    
    2005Provisions for income taxes computed at Federal
statutory rate
    
    $
    5,411
    
    
    $
    3,847
    
    
    $
    2,533Increase (decrease) in income taxes resulting from:Dividend received deduction
    
    
    (407
    )
    
    
    (360
    )
    
    
    (772
    )Foreign tax credit
    
    
    (156
    )
    
    
    (61
    )
    
    
    10Federal income provision
    
    $
    4,848
    
    
    $
    3,426
    
    
    $
    1,771Effective tax rate
    
    
    31
    %
    
    
    31
    %
    
    
    24
    %
   24




---



##### 



Predecessor
    
    
    Predecessor
    
    
    Predecessor2007
    
    
    2006
    
    
    2005Policyholder account balances
    
    $
    397
    
    
    $
    (740
    )
    
    $
    (316
    )Investment adjustments
    
    
    357
    
    
    
    27
    
    
    
    693DSI
    
    
    195
    
    
    
    434
    
    
    
    210DAC
    
    
    113
    
    
    
    49
    
    
    
    (1,401
    )Deferred Federal income tax
provision (benefit)
    
    $
    1,062
    
    
    $
    (230
    )
    
    $
    (814
    )
  Successor
    
    
    Predecessor2007
    
    
    2006 (1)Deferred tax assets:DAC
    
    $
    15,502
    
    
    $
    Policyholder account balances
    
    
    3,286
    
    
    
    3,807Investment adjustments
    
    
    
    
    
    
    745Net unrealized investment loss on investment
securities
    
    
    
    
    
    
    406Total deferred tax assets
    
    
    18,788
    
    
    
    4,958Deferred tax liabilities:VOBA
    
    
    18,788
    
    
    
    DAC
    
    
    
    
    
    
    6,403DSI
    
    
    
    
    
    
    644Total deferred tax liabilities
    
    
    18,788
    
    
    
    7,047Net deferred tax liability
    
    $
    
    
    
    $
    (2,089
    )
 
 (1)
    
    At December 28, 2007, all deferred tax assets and liabilities associated with the
predecessor were adjusted to zero due to the Section 338 tax election made by AUSA. The
Section 338 election caused the predecessor to treat the acquisition as a sale of its
assets for Federal tax purposes which reversed all of the predecessors temporary
differences. Accounting for Uncertainty in
Income Taxes
    25




---



##### 



Note 8. Reinsurance
    PercentageCeded to
    
    Assumed
    
    
    
    
    
    of amountGross
    
    other
    
    from other
    
    Net
    
    assumed toamount
    
    companies
    
    companies
    
    amount
    
    netLife insurance inforce
    
    $
    561,597
    
    
    $
    69,382
    
    
    $
    1,529
    
    
    $
    493,744
    
    
    
    0.3
    %
  Note 9. Related Party Transactions
      26




---



##### 



Note 10. Stockholders Equity and Statutory Regulations
       Note 11. Commitments and Contingencies
  27




---



##### 



Note 12. Segment Information
   Predecessor2007LifeAnnuities
    
    
    Insurance
    
    
    Other
    
    
    TotalPolicy charge revenue
    
    $
    13,592
    
    
    $
    7,190
    
    
    $
    
    
    
    $
    20,782Net interest spread (1)
    
    
    1,379
    
    
    
    62
    
    
    
    2,162
    
    
    
    3,603Net realized investment gains (losses)
    
    
    1,159
    
    
    
    
    
    
    
    (18
    )
    
    
    1,141Net Revenues
    
    
    16,130
    
    
    
    7,252
    
    
    
    2,144
    
    
    
    25,526Policy benefits
    
    
    (124
    )
    
    
    2,193
    
    
    
    
    
    
    
    2,069Reinsurance premiums ceded
    
    
    485
    
    
    
    1,387
    
    
    
    
    
    
    
    1,872Amortization of DAC
    
    
    2,044
    
    
    
    140
    
    
    
    
    
    
    
    2,184Insurance expenses and taxes
    
    
    3,248
    
    
    
    694
    
    
    
    
    
    
    
    3,942Net Benefits and Expenses
    
    
    5,653
    
    
    
    4,414
    
    
    
    
    
    
    
    10,067Earnings before federal income taxes
    
    
    10,477
    
    
    
    2,838
    
    
    
    2,144
    
    
    
    15,459Federal income tax expense
    
    
    3,199
    
    
    
    898
    
    
    
    751
    
    
    
    4,848Net Earnings
    
    $
    7,278
    
    
    $
    1,940
    
    
    $
    1,393
    
    
    $
    10,611
 
 (1)
    
    Management considers investment income net of interest credited to policyholder
liabilities in evaluating results. 28




---



##### 



Predecessor2006LifeAnnuities
    
    
    Insurance
    
    
    Other
    
    
    TotalPolicy charge revenue
    
    $
    12,188
    
    
    $
    7,389
    
    
    $
    
    
    
    $
    19,577Net interest spread (1)
    
    
    1,492
    
    
    
    815
    
    
    
    1,393
    
    
    
    3,700Net realized investment gains (losses)
    
    
    (67
    )
    
    
    
    
    
    
    (4
    )
    
    
    (71
    )Net Revenues
    
    
    13,613
    
    
    
    8,204
    
    
    
    1,389
    
    
    
    23,206Policy benefits
    
    
    961
    
    
    
    1,647
    
    
    
    
    
    
    
    2,608Reinsurance premiums ceded
    
    
    483
    
    
    
    1,432
    
    
    
    
    
    
    
    1,915Amortization of DAC
    
    
    2,005
    
    
    
    1,264
    
    
    
    
    
    
    
    3,269Insurance expenses and taxes
    
    
    3,256
    
    
    
    1,168
    
    
    
    
    
    
    
    4,424Net Benefits and Expenses
    
    
    6,705
    
    
    
    5,511
    
    
    
    
    
    
    
    12,216Earnings before federal income taxes
    
    
    6,908
    
    
    
    2,693
    
    
    
    1,389
    
    
    
    10,990Federal income tax expense
    
    
    2,139
    
    
    
    801
    
    
    
    486
    
    
    
    3,426Net Earnings
    
    $
    4,769
    
    
    $
    1,892
    
    
    $
    903
    
    
    $
    7,564
 
 (1)
    
    Management considers investment income net of interest credited to policyholder
liabilities in evaluating results. Predecessor2005LifeAnnuities
    
    
    Insurance
    
    
    Other
    
    
    TotalPolicy charge revenue
    
    $
    11,085
    
    
    $
    7,346
    
    
    $
    
    
    
    $
    18,431Net interest spread (1)
    
    
    1,055
    
    
    
    1,045
    
    
    
    959
    
    
    
    3,059Net realized investment gains
    
    
    1,799
    
    
    
    
    
    
    
    
    
    
    
    1,799Net Revenues
    
    
    13,939
    
    
    
    8,391
    
    
    
    959
    
    
    
    23,289Policy benefits
    
    
    1,136
    
    
    
    1,365
    
    
    
    
    
    
    
    2,501Reinsurance premiums ceded
    
    
    406
    
    
    
    1,439
    
    
    
    
    
    
    
    1,845Amortization of DAC
    
    
    5,529
    
    
    
    1,476
    
    
    
    
    
    
    
    7,005Insurance expenses and taxes
    
    
    3,388
    
    
    
    1,311
    
    
    
    
    
    
    
    4,699Net Benefits and Expenses
    
    
    10,459
    
    
    
    5,591
    
    
    
    
    
    
    
    16,050Earnings before federal income taxes
    
    
    3,480
    
    
    
    2,800
    
    
    
    959
    
    
    
    7,239Federal income tax expense
    
    
    736
    
    
    
    700
    
    
    
    335
    
    
    
    1,771Net Earnings
    
    $
    2,744
    
    
    $
    2,100
    
    
    $
    624
    
    
    $
    5,468
 
 (1)
    
    Management considers investment income net of interest credited to policyholder
liabilities in evaluating results. 29




---



##### 



Successor2007LifeAnnuities
    
    Insurance
    
    TotalTotal assets
    
    $
    857,543
    
    
    $
    368,276
    
    
    $
    1,225,819Total policyholder liabilities and accruals
    
    
    87,180
    
    
    
    80,984
    
    
    
    168,164
 Predecessor2006LifeAnnuities
    
    Insurance
    
    Other
    
    TotalTotal assets
    
    $
    843,748
    
    
    $
    359,284
    
    
    $
    45,511
    
    
    $
    1,248,543Total policyholder liabilities and accruals
    
    
    95,974
    
    
    
    87,693
    
    
    
    
    
    
    
    183,667
  Predecessor
    
    
    Predecessor
    
    
    Predecessor2007
    
    
    2006
    
    
    2005Annuities:Variable annuities
    
    $
    14,032
    
    
    $
    12,834
    
    
    $
    11,658Interest-sensitive annuities
    
    
    2,098
    
    
    
    779
    
    
    
    2,281Total Annuities
    
    
    16,130
    
    
    
    13,613
    
    
    
    13,939Life Insurance:Variable life
    
    
    7,176
    
    
    
    8,147
    
    
    
    8,346Interest-sensitive whole life
    
    
    76
    
    
    
    57
    
    
    
    45Total Life Insurance
    
    
    7,252
    
    
    
    8,204
    
    
    
    8,391Other
    
    
    2,144
    
    
    
    1,389
    
    
    
    959Net Revenues (1)
    
    $
    25,526
    
    
    $
    23,206
    
    
    $
    23,289
 
 (1)
    
    Management considers investment income net of interest credited to policyholder
liabilities in evaluating Net Revenues.  30




---



##### 



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 to be signed on its
behalf by the undersigned, thereunto duly authorized.

|                     |  |                                                   |                                                      
|-------------------- |  | ------------------------------------------------- | -----------------------------------------------------
|                     |  | ML Life Insurance Company of New York(Registrant)
|                    
|Date:
March 27, 2008 |  | By:                                               | *                                                    
|                     |  |                                                   | John T. Mallett
Treasurer and Chief Financial Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this
Report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.

Signatures
    
    Title
    
    Date*
    
    Director and President
    
    March 27, 2008Lon J. Olejniczak*
    
    Director and Secretary
    
    March 27, 2008Frank A. Camp*
    
    Director and Senior Vice
President
    
    March 27, 2008Robert R. Frederick*
    
    Director, Treasurer and
Chief Financial Officer
    
    March 27, 2008John T. Mallett*
    
    Director and Senior Vice
PresidentOperations
    
    March 27, 2008Brian C. Scott*
    
    Director and Senior Vice
President
    
    March 27, 2008Ronald L. Ziegler*
    
    Director
    
    March 27, 2008Robert F. Colby*
    
    Vice President and
Corporate Controller
    
    March 27, 2008Eric J. Martin/s/ Darin D. Smith
    
    Vice President and
Assistant Secretary
    
    March 27, 2008Darin D. Smith





|     |  |                                                                                 
|---- |  | --------------------------------------------------------------------------------
|*By: |  | Darin D. Smith  Attorney-in-Fact pursuant to Powers of Attorney filed herewith.





---



##### 



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 holder





---



##### 



EXHIBIT INDEX

|            |  |                                                                                  |  |                                                                                                                                                                                                               
|----------- |  | -------------------------------------------------------------------------------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit No. |  | Description                                                                      |  | Location                                                                                                                                                                                                      
|            |  |                                                                                  |  |                                                                                                                                                                                                               
|3.1         |  | Certificate of Amendment of the Charter of
ML Life Insurance Company of New York |  | Incorporated by reference to Exhibit
6(a)(ii) to Post-Effective Amendment No.
10 to ML of New York Variable Annuity
Account As registration statement on Form
N-4, File No. 33-43654, filed December 9,
1996.
|3.2         |  | By-Laws of ML Life Insurance Company of
New York                                 |  | Incorporated by reference to Exhibit 6(b)
to Post-Effective Amendment No. 10 to ML
of New York Variable Annuity Account As
registration statement on Form N-4, File
No. 33-43654, filed December 9, 1996.    
|4.1         |  | Modified Guaranteed Annuity Contract                                             |  | Incorporated by reference to Exhibit 4(a)
to Pre-Effective Amendment No. 1 to the
Registrants registration statement on
Form S-1, File No. 33-34562, filed October
16, 1990.                                 
|4.2         |  | Modified Guaranteed Annuity Contract
Application                                 |  | Incorporated by reference to Exhibit 4(b)
to Pre-Effective Amendment No. 1 to the
Registrants registration statement on
Form S-1, File No. 33-34562, filed October
16, 1990.                                 
|4.3         |  | Qualified Retirement Plan Endorsement                                            |  | Incorporated by reference to Exhibit 4(c)
to Pre-Effective Amendment No. 1 to the
Registrants registration statement on
Form S-1, File No. 33-34562, filed
October 16, 1990.                                 
|4.4         |  | IRA Endorsement                                                                  |  | Incorporated by reference to Exhibit 4(d)
to Pre-Effective Amendment No. 1 to the
Registrants registration statement on
Form S-1, File No. 33-34562, filed October
16, 1990.                                 

E-1



---



##### 



|     |  |                                                                                                                                                                               |  |                                                                                                                                                                                                          
|---- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|4.5  |  | Company Name Change Endorsement                                                                                                                                               |  | Incorporated by reference to
        Exhibit 4(e) to Post-Effective Amendment No. 3 to the Registrants
        registration statement on Form S-1, File No. 33-34562, filed
        March 30, 1992.     
|4.6  |  | IRA Endorsement, MLNY009                                                                                                                                                      |  | Incorporated by reference to
        Exhibit 4(d)(2) to Post-Effective Amendment No. 1 to the Registrants
        registration statement on Form S-1, File No. 33-60288, filed
        March 31, 1994.  
|4.7  |  | Modified Guaranteed Annuity
        Contract
        MLNY-AY-991/94                                                                                                           |  | Incorporated by reference to
        Exhibit 4(a)(2) to Post-Effective Amendment No. 3 to the Registrants
        registration statement on Form S-1, File No. 33-60288, filed
        December 7, 1994.
|4.8  |  | Qualified Retirement Plan
        Endorsement 
        MLNY-AYQ-991/94                                                                                                        |  | Incorporated by reference to
        Exhibit 4(c)(2) to Post-Effective Amendment No. 3 to the Registrants
        registration statement on Form S-1, File No. 33-60288, filed
        December 7, 1994.
|10.1 |  | General Agency Agreement between
        Royal Tandem Life Insurance Company and Merrill Lynch Life Agency Inc.                                                               |  | Incorporated by reference to
        Exhibit 10(a) to Pre-Effective Amendment No. 1 to the Registrants
        registration statement on Form S-1, File No. 33-34562, filed
        October 16, 1990.   
|10.2 |  | Investment Management Agreement
        by and between Royal Tandem Life Insurance Company and Equitable Capital
        Management Corporation                               |  | Incorporated by reference to
        Exhibit 10(b) to Pre-Effective Amendment No. 1 to the Registrants
        registration statement on Form S-1, File No. 33-34562, filed
        October 16, 1990.   
|10.3 |  | Shareholders Agreement
        by and among The Equitable Life Assurance Society of the United States
        and Merrill Lynch & Co., Inc. and Tandem Financial Group, Inc. |  | Incorporated by reference to
        Exhibit 10(c) to Pre- Effective Amendment No. 1 to the Registrants
        registration statement on Form S-1, File No. 33-34562, filed
        October 16, 1990.  

E-2



---



##### 



|      |  |                                                                                                                                                                                       |  |                                                                                                                                                                               
|----- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.4  |  | Service Agreement by and between Royal
Tandem Life Insurance Company and Tandem
Financial Group, Inc.                                                                                 |  | Incorporated by reference to Exhibit 10(d)
to Pre-Effective Amendment No. 1 to the
Registrants registration statement on
Form S-1, File No. 33-34562, filed October
16, 1990.
|10.5  |  | Service Agreement by and between Tandem
Financial Group, Inc. and Merrill Lynch
&
Co., Inc.                                                                                           |  | Incorporated by reference to Exhibit 10(e)
to Pre-Effective Amendment No. 1 to the
Registrants registration statement on
Form S-1, File No. 33-34562, filed October
16, 1990.
|10.6  |  | Form of Investment Management Agreement by
and between Royal Tandem Life Insurance
Company and Merrill Lynch Asset
Management, Inc.                                                   |  | Incorporated by reference to Exhibit 10(f)
to Post-Effective Amendment No. 1 to the
Registrants registration statement on
Form S-1, File No. 33-34562, filed March
7, 1991.  
|10.7  |  | Assumption Reinsurance Agreement between
Merrill Lynch Life Insurance Company,
Tandem Insurance Group, Inc. and Royal
Tandem Life Insurance Company and Family
Life Insurance Company |  | Incorporated by reference to Exhibit 10(g)
to Post-Effective Amendment No. 3 to the
Registrants registration statement on
Form S-1, File No. 33-34562, filed March
30, 1992. 
|10.8  |  | Indemnity Agreement between ML Life
Insurance Company of New York and Merrill
Lynch Life Agency, Inc.                                                                                 |  | Incorporated by reference to Exhibit 10(h)
to Post-Effective Amendment No. 3 to the
Registrants registration statement on
Form S-1, File No. 33-34562, filed March
30, 1992. 
|10.9  |  | Amended General Agency Agreement between
ML Life Insurance Company of New York and
Merrill Lynch Life Agency, Inc.                                                                    |  | Incorporated by reference to Exhibit 10(i)
to Post-Effective Amendment No. 3 to the
Registrants registration statement on
Form S-1, File No. 33-34562, filed March
30, 1992. 
|10.10 |  | Amended Management Agreement between ML
Life Insurance Company of New York and
Merrill Lynch Asset Management, Inc.                                                                   |  | Incorporated by reference to Exhibit 10(j)
to the Registrants registration statement
on Form S-1, File No. 33-60288, filed March
30, 1993.                                   

E-3



---



##### 



|      |  |                                                                                                                                                                                      |  |                                                                                                                                            
|----- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | -------------------------------------------------------------------------------------------------------------------------------------------
|10.11 |  | Mortgage Loan Servicing Agreement between
ML Life Insurance Company of New York and
Merrill Lynch & Co., Inc.                                                                        |  | Incorporated by reference to Exhibit 10(k)
to the Registrants registration statement
on Form S-1, File No. 33-60288, filed
March 29, 1995.
|10.12 |  | Master Distribution Agreement between Merrill
Lynch Insurance Group, Inc., Merrill Lynch & Co., Inc., and AEGON USA, Inc.                                                            |  | Incorporated by reference to Exhibit 10.1 to
Registrants Current Report on Form 8-K, File No. 33-34562, filed January 4, 2008.            
|     
|10.13 |  | Non-Affiliated Broker-Dealer Wholesaling Agreement between ML Life Insurance Company of New York, Merrill Lynch, Pierce, Fenner & Smith Incorporated, and Transamerica Capital, Inc. |  | Exhibit 10.13                                                                                                                              
|     
|10.14 |  | Selling Agreement between ML Life Insurance Company of New York, Merrill Lynch, Pierce, Fenner & Smith Incorporated, and Merrill Lynch Life Agency, Inc.                             |  | Exhibit 10.14                                                                                                                              
|     
|10.15 |  | Keep Well Agreement between AEGON USA And ML Life Insurance Company of New York                                                                                                      |  | Exhibit 10.15                                                                                                                              
|     
|10.16 |  | Purchase Agreement between Merrill Lynch
Insurance Group, Inc., Merrill Lynch & Co., Inc., and AEGON USA, Inc.                                                                       |  | Incorporated by reference to Exhibit 10.1 to
Registrants Current Report on Form 8-K, File No. 33-34562, filed August 17, 2007.            
|     
|10.17 |  | First Amendment to Purchase Agreement between Merrill
Lynch Insurance Group, Inc., Merrill Lynch & Co., Inc., and AEGON USA, Inc.                                                    |  | Incorporated by reference to Exhibit 10.1 to
Registrants Current Report on Form 8-K, File No. 33-34562, filed January 4, 2008.            
|     
|23.1  |  | Written Consent of Deloitte & Touche LLP, independent registered public accounting firm                                                                                              |  | Exhibit 23.1                                                                                                                               
|     
|23.2  |  | Written Consent of
Ernst & Young LLP, independent registered public accounting firm                                                                                                  |  | Exhibit 23.2                                                                                                                               
|     
|24.1  |  | Powers of Attorney                                                                                                                                                                   |  | Exhibit 24.1                                                                                                                               

E-4



---



##### 



|     |  |                                                                                                                                                                          |  |             
|---- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | ------------
|31.1 |  | Certification by the Chief Executive Officer of the Registrant
pursuant to Rule 15d-14(a).                                                                               |  | Exhibit 31.1
|31.2 |  | Certification of the Chief Financial Officer of the Registrant
pursuant to Rule 15d-14(a).                                                                               |  | Exhibit 31.2
|32.1 |  | Certification by the Chief Executive Officer of the
Registrant pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002. |  | Exhibit 32.1
|32.2 |  | Certification by the Chief Financial Officer of the
Registrant pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |  | Exhibit 32.2

E-5