<PAGE>   1
                                   FORM 10-K

                       SECURITIES AND EXCHANGE COMMISSION

                            Washington, D.C.  20549

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

                  For the fiscal year ended December 31, 1996

                    Commission File Nos. 33-34562; 33-60288

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

<TABLE>
<S>                                                                                <C>
           New York                                                                             16-1020455               
---------------------------------                                                  ----------------------------------
(State or other jurisdiction of                                                    (I.R.S. Employer Identification No.)
incorporation or organization)
</TABLE>

                        100 Church Street, 11th Floor
                        New York, New York  10080-6511
                    -------------------------------------
                   (Address of Principal Executive Offices)

                                (212) 602-8250
             ---------------------------------------------------
               (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 whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter period
that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.  Yes   X     No
                                                              -------     ------

                 Indicate by check mark 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]

                    APPLICABLE ONLY TO CORPORATE REGISTRANTS

                 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  
                                                                      -------

                      DOCUMENTS INCORPORATED BY REFERENCE

                 Preliminary Prospectus included in Post-Effective Amendment
No. 6 to the Registrant's registration statement on Form S-1, filed March 27,
1997, pursuant to the Securities Act of 1933, File No. 33-60288 -- incorporated
by reference into Parts I and II of this report on Form 10-K; and Exhibits.

                 REGISTRANT MEETS THE CONDITIONS SET FORTH IN GENERAL
INSTRUCTION J(1)(a) AND (b) OF FORM 10-K AND IS THEREFORE FILING THIS FORM WITH
THE REDUCED DISCLOSURE FORMAT.
<PAGE>   2
                                     PART I

Item 1.  Business.

                 The Registrant is an indirect wholly-owned subsidiary of
Merrill Lynch & Co., Inc., a corporation whose common stock is traded on the
New York Stock Exchange.  The information set forth under the caption "A.
History and Business" in the preliminary prospectus contained in Post-Effective
Amendment No. 6 to Registrant's registration statement, filed March 27, 1997,
pursuant to the Securities Act of 1933, File No. 33-60288 (the "Prospectus"),
is incorporated herein by reference.

Item 2.  Properties.

                 The information set forth under the caption "J. Properties" in
the Prospectus is incorporated herein by reference.

Item 3.  Legal Proceedings.

                 The information set forth under the caption "Legal
Proceedings" in the Prospectus is incorporated herein by reference.

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

                 Information called for by this item is omitted pursuant to
General Instruction J. of Form 10-K.


                                    PART II

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

                 The Registrant is a wholly-owned subsidiary of Merrill Lynch
Insurance Group, Inc. ("MLIG"), which is an indirect wholly-owned subsidiary of
Merrill Lynch & Co., Inc.  MLIG is the sole record holder of Registrant's
shares.  Therefore, there is no public trading market for Registrant's common
stock.

                 On November 25, 1996, the Registrant paid a $35,000,000
dividend to MLIG.  The Registrant has declared no cash dividends on its common
stock at any other time during the two most recent
<PAGE>   3
fiscal years.  Under laws applicable to insurance companies domiciled in the
State of New York, notice of intention to declare a dividend must be filed with
the New York Superintendent of Insurance who may disallow the payment.  See
Note 6 to the Registrant's financial statements.

Item 6.  Selected Financial Data.

                 Information called for by this item is omitted pursuant to
General Instruction J. of Form 10-K.

Item 7.  Management's Narrative Analysis of Results of
         Operations.

                 The information set forth under the sub-caption "Results of
Operations" under the caption "C. Management's Discussion and Analysis of
Financial Condition and Results of Operations" in the Prospectus is
incorporated herein by reference.

Item 8.  Financial Statements and Supplementary Data.

                 The financial statements of Registrant are set forth in Part
IV hereof and are incorporated herein by reference.

Item 9.  Changes in and Disagreements With Accountants on
         Accounting and Financial Disclosure.

                 Not applicable.

                                    PART III

                 Information called for by items 10 through 13 of this part is
omitted pursuant to General Instruction J. of Form 10-K.

                                    PART IV

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

         (a)  Financial Statements and Exhibits.

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





                                     - 2 -
<PAGE>   4
                 a.       Independent Auditors' Report dated February 24, 1997.

                 b.       Balance Sheets at December 31, 1996 and 1995.

                 c.       Statements of Earnings for the Years Ended December
                          31, 1996, 1995 and 1994.

                 d.       Statements of Stockholder's Equity for the Years
                          Ended December 31, 1996, 1995 and 1994.

                 e.       Statements of Cash Flows for the Years Ended December
                          31, 1996, 1995 and 1994.

                 f.       Notes to Financial Statements for the Years Ended
                          December 31, 1996, 1995 and 1994.





                                     - 3 -
<PAGE>   5
                 (2)  The following exhibits are filed as part of this report
as indicated below:

                 3.1        Certificate of Amendment and Restatement of Charter
                            of Royal Tandem Life Insurance Company.
                            (Incorporated by reference to Exhibit 3(a) to the
                            Registrant's registration statement on Form S-1,
                            File No. 33-34562, filed April 26, 1990.)

                 3.2        By-Laws of Royal Tandem Life Insurance Company.
                            (Incorporated by reference to Exhibit 3(b) to the
                            Registrant's registration statement on Form S-1,
                            File No. 33-34562, filed April 26, 1990.)

                 3.3        Certificate of Amendment of the Charter of ML Life
                            Insurance Company of New York.  (Incorporated by
                            reference to Exhibit 3(c) to Post-Effective
                            Amendment No. 3 to the Registrant's registration
                            statement on Form S-1, File No. 33-34562, filed
                            March 30, 1992.)

                 3.4        By-Laws of ML Life Insurance Company of New York.
                            (Incorporated by reference to Exhibit 3(d) to
                            Post-Effective Amendment No. 3 to the Registrant's
                            registration statement on Form S-1, File No.
                            33-34562, filed March 30, 1992.)

                 4.1        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





                                     - 4 -
<PAGE>   6
                            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).

                 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.





                                     - 5 -
<PAGE>   7
                            (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.)

                 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





                                     - 6 -
<PAGE>   8
                            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.)

                 24.1       Power of attorney of Frederick J.C. Butler.
                            (Incorporated by reference to Exhibit 24(a) to
                            Post-Effective Amendment No. 1 to the Registrant's
                            registration statement on Form S-1, File No.
                            33-60288, filed March 31, 1994.)

                 24.2       Power of attorney of Michael P. Cogswell.
                            (Incorporated by reference to Exhibit 24(b) to
                            Post-Effective Amendment No. 1 to the





                                     - 7 -
<PAGE>   9
                            Registrant's registration statement on Form S-1,
                            File No. 33-60288, filed March 31, 1994.)

                 24.3       Power of attorney of Joseph E. Crowne.
                            (Incorporated by reference to Exhibit 24(d) to
                            Post-Effective Amendment No. 1 to the Registrant's
                            registration statement on Form S-1, File No.
                            33-60288, filed March 31, 1994.)

                 24.4       Power of attorney of David M. Dunford.
                            (Incorporated by reference to Exhibit 24(e) to
                            Post-Effective Amendment No. 1 to the Registrant's
                            registration statement on Form S-1, File No.
                            33-60288, filed March 31, 1994.)

                 24.5       Power of attorney of Robert L. Israeloff.
                            (Incorporated by reference to Exhibit 24(g) to
                            Post-Effective Amendment No. 1 to the Registrant's
                            registration statement on Form S-1, File No.
                            33-60288, filed March 31, 1994.)

                 24.6       Power of attorney of Allen N. Jones.  (Incorporated
                            by reference to Exhibit 24(j) to Post Effective
                            Amendment No. 6 to the Registrant's registration
                            statement on Form S-1, File No. 33-60288, filed
                            March 27, 1997.)

                 24.7       Power of attorney of Cynthia L. Kahn.
                            (Incorporated by reference to Exhibit 24(i) to
                            Post-Effective Amendment No. 1 to the Registrant's
                            registration statement on Form S-1, File No.
                            33-60288, filed March 31, 1994.)

                 24.8       Power of attorney of Robert A. King.  (Incorporated
                            by reference to Exhibit 24(j) to Post-Effective
                            Amendment No. 1 to the Registrant's registration
                            statement on Form S-1, File No. 33-60288, filed
                            March 31, 1994.)

                 24.9       Power of attorney of Irving M. Pollack.
                            (Incorporated by reference to Exhibit 24(k) to
                            Post-Effective Amendment No. 1 to the





                                     - 8 -
<PAGE>   10
                            Registrant's registration statement on Form S-1,
                            File No. 33-60288, filed March 31, 1994.)

                 24.10      Power of attorney of Barry G. Skolnick.
                            (Incorporated by reference to Exhibit 24(l) to
                            Post-Effective Amendment No. 1 to the Registrant's
                            registration statement on Form S-1, File No.
                            33-60288, filed March 31, 1994.)

                 24.11      Power of attorney of William A. Wilde.
                            (Incorporated by reference to Exhibit 24(m) to
                            Post-Effective Amendment No. 1 to the Registrant's
                            registration statement on Form S-1, File No.
                            33-60288, filed March 31, 1994.)

                 24.12      Power of attorney of Anthony J. Vespa.
                            (Incorporated by reference to Exhibit 24(n) to
                            Post-Effective Amendment No. 1 to the Registrant's
                            registration statement on Form S-1, File No.
                            33-60288, filed March 31, 1994.)

                 24.13      Power of attorney of Gail R. Farkas.  (Incorporated
                            by reference to Exhibit 24(g) to Post-Effective
                            Amendment No. 5 to the Registrant's registration
                            statement on Form S-1, File No. 33-60288, filed
                            March 26, 1996.)

                 99.1       Preliminary prospectus contained in Post-Effective
                            Amendment No. 6 to the Registrant's registration
                            statement, filed on March 27, 1997, pursuant to the
                            Securities Act of 1933, File No. 33-60288.

                 (3)        Not applicable.

         (b)     Reports on Form 8-K.

                 No reports on Form 8-K have been filed during the last quarter
                 of the fiscal year ended December 31, 1996.





                                     - 9 -
<PAGE>   11
                         INDEX TO FINANCIAL STATEMENTS


Independent Auditors' Report  . . . . . . . . . . . . . . . . . . . . . . . . .

Balance Sheets at December 31, 1996 and 1995  . . . . . . . . . . . . . . . . .

Statements of Earnings for the Years Ended December 31,
  1996, 1995 and 1994   . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Statements of Stockholder's Equity for the Years Ended
  December 31, 1996, 1995 and 1994  . . . . . . . . . . . . . . . . . . . . . .

Statements of Cash Flows for the Years Ended December 31,
  1996, 1995 and 1994 . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Notes to Financial Statements for the Years Ended
  December 31, 1996, 1995 and 1994  . . . . . . . . . . . . . . . . . . . . . .
<PAGE>   12















INDEPENDENT AUDITORS' REPORT



The Board of Directors of
ML Life Insurance Company of New York:

We have audited the accompanying balance sheets of ML Life
Insurance Company of New York (the "Company"), a wholly-owned
subsidiary of Merrill Lynch Insurance Group, Inc., as of December
31, 1996 and 1995, and the related statements of earnings,
stockholder's equity, and cash flows for each of the three years
in the period ended December 31, 1996. These financial statements
are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial
statements based on our audits.

We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.

In our opinion, such financial statements present fairly, in all
material respects, the financial position of the Company at
December 31, 1996 and 1995, and the results of its operations and
its cash flows for each of the three years in the period ended
December 31, 1996 in conformity with generally accepted
accounting principles.








February 24, 1997
<PAGE>




ML LIFE INSURANCE COMPANY OF NEW YORK
(A wholly-owned subsidiary of Merrill Lynch Insurance Group, Inc.)

BALANCE SHEETS
AS OF DECEMBER 31, 1996 AND 1995
(Dollars in Thousands)
<TABLE>
<CAPTION>


                                                                             1996                  1995
                                                                       ---------------         -------------
<S>                                                                    <C>                     <C>   
ASSETS
------
INVESTMENTS:                                                                                      
 Fixed maturity securities, at estimated fair value                                               
   (amortized cost: 1996 - $264,341; 1995 - $295,403)                   $     269,103           $   307,596
 Equity securities, at estimated fair value                                                       
   (cost: 1996 - $8,975; 1995 - $3,017)                                        10,859                 3,534
 Mortgage loans                                                                 2,057                 4,032
 Policy loans on insurance contracts                                           85,548                82,073
                                                                       ---------------         -------------
   Total Investments                                                          367,567               397,235
                                                                       ===============         =============
                                                                                                  
                                                                                                  
                                                                                                  
CASH AND CASH EQUIVALENTS                                                       7,828                17,387
ACCRUED INVESTMENT INCOME                                                       5,952                 6,603
DEFERRED POLICY ACQUISITION COSTS                                              29,272                30,922
FEDERAL INCOME TAXES - DEFERRED                                                   -                   3,622
REINSURANCE RECEIVABLES                                                         1,065                   493
OTHER ASSETS                                                                    4,569                 2,653
SEPARATE ACCOUNTS ASSETS                                                      591,814               544,432
                                                                       ---------------         -------------
                                                                                                  
TOTAL ASSETS                                                            $   1,008,067           $ 1,003,347
                                                                       ===============         =============
</TABLE>











See notes to financial statements.
<PAGE>
ML Life Insurance Company of New York
(A wholly-owned subsidiary of Merrill Lynch Insurance Group, Inc.)
Balance Sheets
As of December 31, 1996 and 1995
(Continued)  (Dollars in Thousands)
<TABLE>
<CAPTION>
                                                                             1996                   1995
                                                                       ---------------         --------------
<S>                                                                    <C>                     <C>   
LIABILITIES AND STOCKHOLDER'S EQUITY
------------------------------------
LIABILITIES:                                                                                      
 POLICY LIABILITIES AND ACCRUALS:                                                                 
   Policyholders' account balances                                      $     318,567           $    337,137
   Claims and claims settlement expenses                                        2,572                  2,901
                                                                       ---------------         --------------
          Total policy liabilities and accruals                               321,139                340,038
 
 OTHER POLICYHOLDER FUNDS                                                       1,160                    739
 FEDERAL INCOME TAXES - DEFERRED                                                  626                     -
 FEDERAL INCOME TAXES - CURRENT                                                 2,099                    185
 AFFILIATED PAYABLES - NET                                                      5,026                  4,062
 OTHER LIABILITIES                                                              1,649                  3,112
 SEPARATE ACCOUNTS LIABILITIES                                                591,814                544,432
                                                                       ---------------         --------------
          Total Liabilities                                                   923,513                892,568
                                                                       ---------------         --------------
                                                                                                  
STOCKHOLDER'S EQUITY:                                                                             
 Common stock, $10 par value - 220,000 shares                                                     
   authorized, issued and outstanding                                          2,200                   2,200
 Additional paid-in capital                                                   72,040                  83,006
 Retained earnings                                                             9,219                  24,034
 Net unrealized gain on investment securities                                  1,095                   1,539
                                                                       --------------          --------------
          Total Stockholder's Equity                                          84,554                 110,779
                                                                       --------------          --------------
                                                                                                  
TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY                              $  1,008,067            $  1,003,347
                                                                       ==============          ==============
</TABLE>
<PAGE>








ML LIFE INSURANCE COMPANY OF NEW YORK
(A wholly-owned subsidiary of Merrill Lynch Insurance Group, Inc.)

STATEMENTS OF EARNINGS
FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
(Dollars in Thousands)
<TABLE>
<CAPTION>
                                                                          1996                  1995                  1994
                                                                      ------------          ------------          ------------
<S>                                                                   <C>                   <C>                   <C> 
REVENUES:                                                                                                            
 Investment revenue:                                                                                                 
   Net investment income                                               $   27,520            $   29,819            $   32,679
   Net realized investment gains (losses)                                   2,169                  (265)               (2,218)
 Policy charge revenue                                                     11,959                10,864                10,339
                                                                      ------------          ------------          ------------
                                                                                                                     
        Total Revenues                                                     41,648                40,418                40,800
                                                                      ------------          ------------          ------------
                                                                                                                     
BENEFITS AND EXPENSES:                                                                                               
 Interest credited to policyholders' account balances                      16,586                17,375                22,691
 Market value adjustment expense                                              301                   238                   132
 Policy benefits (net of reinsurance recoveries: 1996 - $1,584                                                       
   1995 - $917; 1994 - $715)                                                1,311                   528                 1,620
 Reinsurance premium ceded                                                  1,262                 1,227                 1,240
 Amortization of deferred policy acquisition costs                          3,784                 1,300                 4,141
 Insurance expenses and taxes                                               4,595                 4,508                 3,685
                                                                      ------------          ------------          ------------
                                                                                                                     
        Total Benefits and Expenses                                        27,839                25,176                33,509
                                                                      ------------          ------------          ------------
                                                                                                                     
        Earnings Before Federal Income Tax Provision                       13,809                15,242                 7,291
                                                                      ------------          ------------          ------------
                                                                                                                     
FEDERAL INCOME TAX PROVISION (BENEFIT):                                                                              
 Current                                                                      102                 1,692                  (213)
 Deferred                                                                   4,488                 3,486                 2,031
                                                                      ------------          ------------          ------------
                                                                                                                     
        Total Federal Income Tax Provision                                  4,590                 5,178                 1,818
                                                                      ------------          ------------          ------------
                                                                                                                     
                                                                                                                     
NET EARNINGS                                                           $    9,219            $   10,064            $    5,473
                                                                      ============          ============          ============
</TABLE>




See notes to financial statements.
<PAGE>
ML LIFE INSURANCE COMPANY OF NEW YORK
(A wholly-owned subsidiary of Merrill Lynch Insurance Group, Inc.)

STATEMENTS OF STOCKHOLDER'S EQUITY
FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
(Dollars in Thousands)
<TABLE>
<CAPTION>

                                                                                                      Net            
                                                           Additional                              unrealized              Total
                                        Common              paid-in             Retained           investment          stockholder's
                                        stock               capital             earnings           gain (loss)             equity
                                     -----------          -----------         -----------          -----------         -------------
<S>                                  <C>                  <C>                 <C>                  <C>                 <C>   
BALANCE, JANUARY 1, 1994              $   2,200            $  83,006           $   8,497            $    (927)          $    92,776
                                                                                                                                  
 Net earnings                                                                      5,473                                      5,473
 Net unrealized investment loss                                                                        (2,436)               (2,436)
                                     -----------          -----------         -----------          -----------         -------------

BALANCE, DECEMBER 31, 1994                2,200               83,006              13,970              ( 3,363)               95,813
                                                                                                                   
 Net earnings                                                                     10,064                                     10,064
 Net unrealized investment gain                                                                         4,902                 4,902
                                     -----------          -----------         -----------          -----------         -------------
                                                                                                                          
BALANCE, DECEMBER 31, 1995                2,200               83,006              24,034                1,539               110,779
                                                                                                                           
 Dividend to Parent                                          (10,966)            (24,034)                                   (35,000)
 Net earnings                                                                      9,219                                      9,219
 Net unrealized investment loss                                                                          (444)                 (444)
                                     -----------          -----------         -----------          -----------         -------------
                                                                                                                                 
BALANCE, DECEMBER 31, 1996            $   2,200            $  72,040           $   9,219            $   1,095           $    84,554
                                     ===========          ===========         ===========          ===========         =============
</TABLE>


















See notes to financial statements.
<PAGE>
ML LIFE INSURANCE COMPANY OF NEW YORK
(A wholly-owned subsidiary of Merrill Lynch Insurance Group, Inc.)

STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
(Dollars in Thousands)
<TABLE>
<CAPTION>

                                                                          1996                  1995                  1994
                                                                      -----------           -----------           -----------
<S>                                                                   <C>                   <C>                   <C>  
OPERATING ACTIVITIES:                                                                                                
 Net earnings                                                          $   9,219             $  10,064             $   5,473
   Adjustments to reconcile net earnings to net cash and                                                             
    cash equivalents provided (used) by operating activities:                                                      
     Amortization of deferred policy acquisition costs                     3,784                 1,300                 4,142
     Capitalization of policy acquisition costs                           (2,134)               (4,368)               (7,142)
     Amortization, (accretion) and depreciation of investments                 1                  (434)                 (312)
     Net realized investment (gains) losses                               (2,169)                  265                 2,218
     Interest credited to policyholders' account balances                 16,586                17,375                22,691
     Provision for deferred Federal income tax                             4,488                 3,486                 2,031
     Changes in operating assets and liabilities:                                                                    
      Accrued investment income                                              651                   751                 2,810
      Claims and claims settlement expenses                                 (329)               (1,413)               (1,300)
      Federal income taxes - current                                       1,914                    15                  (694)
      Other policyholder funds                                               421                  (793)                  332
      Affiliated payable - net                                               964                  (180)                 (981)
     Policy loans on insurance contracts                                  (3,475)               (4,246)               (4,447)
     Other, net                                                           (3,951)                1,723                (1,947)
                                                                      -----------           -----------           -----------
      Net cash and cash equivalents provided                                                                         
        by operating activities                                           25,970                23,545                22,874
                                                                      -----------           -----------           -----------
                                                                                                                     
INVESTING ACTIVITIES:                                                                                                
 Sales of available-for-sale securities                                  155,645                68,736               128,183
 Maturities of available-for-sale securities                              34,455                38,420                92,499
 Purchases of available-for-sale securities                             (162,828)             (103,568)              (73,045)
 Mortgage loans principal payments received                                1,975                   -                   8,998
 Sales of mortgage loans                                                     -                   3,608                   -
                                                                      -----------           -----------           -----------
      Net cash and cash equivalents provided by                                                                      
        investing activities                                              29,247                 7,196               156,635
                                                                      -----------           -----------           -----------
</TABLE>
<PAGE>

ML LIFE INSURANCE COMPANY OF NEW YORK
(a wholly-owned subsidiary of Merrill Lynch Insurance Group, Inc.)

STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
(Continued) (Dollars In Thousands)
<TABLE>
<CAPTION>
                                                                           1996                 1995                  1994
                                                                      -------------         -------------         --------------
<S>                                                                   <C>                   <C>                   <C>         
FINANCING ACTIVITIES:                                                                                                
 Dividends paid to parent                                              $   (35,000)          $       -             $        -
 Policyholders' account balances:                                                                                    
   Deposits                                                                 32,158                43,191                 56,297
   Withdrawals (net of transfers to/from Separate Accounts)                (61,934)              (77,460)              (242,355)
                                                                      -------------         -------------         --------------
      Net cash and cash equivalents used                                                                             
        by financing activities                                            (64,776)              (34,269)              (186,058)
                                                                      -------------         -------------         --------------
                                                                                                                     
NET DECREASE IN CASH AND                                                                                             
 CASH EQUIVALENTS                                                           (9,559)               (3,528)                (6,549)
                                                                                                                     
CASH AND CASH EQUIVALENTS:                                                                                           
 Beginning of year                                                          17,387                20,915                 27,464
                                                                      -------------         -------------         --------------
                                                                                                                     
 End of year                                                           $     7,828           $    17,387           $     20,915
                                                                      =============         =============         ==============

Supplementary Disclosure of Cash Flow Information:                                                                   
 Cash paid (received) to (from) affiliates for:                                                                      
   Federal income taxes                                                $    (1,812)          $     1,677            $       482
   Interest                                                                    440                   447                    352

</TABLE>




See notes to financial statements.
<PAGE>
ML LIFE INSURANCE COMPANY OF NEW YORK
(A wholly-owned subsidiary of Merrill Lynch Insurance Group,Inc.)

NOTES TO FINANCIAL STATEMENTS
 (DOLLARS IN THOUSANDS)


NOTE 1:   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 Basis of Reporting: ML Life Insurance Company of New York (the
 "Company") is a wholly-owned subsidiary of Merrill Lynch
 Insurance Group, Inc. ("MLIG"). The Company is an indirect
 wholly-owned subsidiary of Merrill Lynch & Co., Inc. ("Merrill
 Lynch & Co.").
 
 The Company sells non-participating life insurance and annuity
 products which comprise one business segment. The primary
 products that the Company currently markets are immediate
 annuities, market value adjusted annuities, variable life
 insurance and variable annuities. The Company is licensed to
 sell insurance in nine states; however, it currently limits its
 marketing activities to the State of New York. The Company
 markets its products solely through the retail network of
 Merrill Lynch, Pierce, Fenner & Smith, Incorporated ("MLPF&S"),
 a wholly-owned subsidiary of Merrill Lynch & Co.
 
 The accompanying financial statements have been prepared in
 conformity with generally accepted accounting principles and
 prevailing industry practices, both of which require management
 to make estimates that affect the reported amounts and
 disclosure of contingencies in the financial statements. Actual
 results could differ from those estimates.
 
 Revenue Recognition: Revenues for the Company's interest-
 sensitive life, interest-sensitive annuity, variable life and
 variable annuity products consist of policy charges for the
 cost of insurance, deferred sales charges, policy
 administration charges and/or withdrawal charges assessed
 against policyholders' account balances during the period.
 
 Policyholders' Account Balances: Liabilities for the Company's
 universal life type contracts, including its life insurance and
 annuity products, are equal to the full accumulation value of
 such contracts as of the valuation date plus deficiency
 reserves for certain products. Interest-crediting rates for the
 Company's fixed-rate products are as follows:
 
 Interest-sensitive life products              4.00% - 5.40%
 Interest-sensitive deferred annuities         4.00% - 8.23%
 Immediate annuities                           3.00% - 10.00%
 
 These rates may be changed at the option of the Company,
 subject to minimum guarantees, after initial guaranteed rates
 expire.
 
 Liabilities for unpaid claims equal the death benefit for those
 claims which have been reported to the Company and an estimate
 based upon prior experience for claims unreported.
 
 Reinsurance: In the normal course of business, the Company
 seeks to limit its exposure to loss on any single insured life
 and to recover a portion of benefits paid by ceding reinsurance
 to other insurance enterprises or reinsurers under indemnity
 reinsurance agreements, primarily excess coverage and
 coinsurance agreements. The maximum amount of mortality risk
 retained by the Company is approximately $500 on a single life.
 
 Indemnity reinsurance agreements do not relieve the Company
 from its obligations to policyholders. Failure of reinsurers to
 honor their obligations could result in losses to the Company.
 The Company regularly evaluates the financial condition of its
 reinsurers so as to minimize its exposure to significant losses
 from reinsurer insolvencies. The Company holds collateral under
 reinsurance agreements in the form of letters of credit and
 funds withheld totaling $183 that can be drawn upon for
 delinquent reinsurance recoverables.
 
 As of December 31, 1996, the Company had life insurance in-
 force that was ceded to other life insurance companies of
 $149,994.
 
 Deferred Policy Acquisition Costs: Policy acquisition costs for
 life and annuity contracts are deferred and amortized based on
 the estimated future gross profits for each group of contracts.
 These future gross profit estimates are subject to periodic
 evaluation by the Company, with necessary revisions applied
 against amortization to date. It is reasonably possible that
 estimates of future gross profits could be reduced in the
 future, resulting in a material reduction in the carrying
 amount of deferred policy acquisition costs.
 
 Policy acquisition costs are principally commissions and a
 portion of certain other expenses relating to policy
 acquisition, underwriting and issuance, that are primarily
 related to and vary with the production of new business.
 Certain costs and expenses reported in the statements of
 earnings are net of amounts deferred. Policy acquisition costs
 can also arise from the acquisition or reinsurance of existing
 in-force policies from other insurers. These costs include
 ceding commissions and professional fees related to the
 reinsurance assumed. The deferred costs are amortized in
 proportion to the estimated future gross profits over the
 anticipated life of the acquired insurance contracts utilizing
 an interest methodology.
 
 The Company has entered into an assumption reinsurance
 agreement with an unaffiliated insurer. The acquisition costs
 relating to this agreement are being amortized over a twenty-
 year period using an effective interest rate of 9.01%. This
 reinsurance agreement provides for payment of contingent ceding
 commissions based upon the persistency and mortality experience
 of the insurance contracts assumed. Any payments made for the
 contingent ceding commissions will be capitalized and amortized
 using an identical methodology as that used for the initial
 acquisition costs. The following is a reconciliation of the
 acquisition costs related to the reinsurance agreement for the
 years ended December 31:

<TABLE>
<CAPTION>
                              1996           1995          1994
                          -----------    -----------   -----------
<S>                       <C>            <C>           <C>    
 Beginning balance         $  17,654      $  14,923     $  15,614
 Capitalized amounts             577          1,553         1,447
 Interest accrued              1,566          2,138         1,407
 Amortization                 (2,646)          (960)       (3,545)
                          -----------    -----------   -----------
 Ending balance            $  17,151      $  17,654     $  14,923
                          ===========    ===========   ===========
</TABLE>
 
 The following table presents the expected amortization, net of
 interest accrued, of these deferred acquisition costs over the
 next five years. The amortization may be adjusted based on
 periodic evaluation of the expected gross profits on the
 reinsured policies.
 
                        1997  $1,394
                        1998     995
                        1999     942
                        2000     905
                        2001     868
 
 Investments: The Company's investments in fixed maturity and
 equity securities are classified as available-for-sale
 securities, which are carried at estimated fair value with
 unrealized gains and losses included in stockholder's equity.
 If a decline in value of a security is determined by management
 to be other-than-temporary, the carrying value is adjusted to
 the estimated fair value at the date of this determination and
 recorded as net realized investment gains (losses).
 
 For fixed maturity securities, premiums are amortized to the
 earlier of the call or maturity date, discounts are accreted to
 the maturity date, and interest income is accrued daily. For
 equity securities, dividends are recognized on the ex-dividend
 date. Realized gains and losses on the sale or maturity of the
 investments are determined on the basis of identified cost.
 
 Fixed maturity securities may contain securities which are
 considered non-investment grade. The Company defines non-
 investment grade fixed maturity securities as unsecured
 corporate debt obligations that do not have a rating equivalent
 to Standard and Poor's (or similar rating agency) BBB or higher
 and are not guaranteed by an agency of the Federal government.
 
 Mortgage loans are stated at unpaid principal balances, net of
 valuation allowances. Such valuation allowances are based on
 the decline in value expected to be realized on mortgage loans
 that may not be collectible in full. In establishing valuation
 allowances, management considers, among other things, the
 estimated fair value of the underlying collateral.
 
 The Company recognizes income from mortgage loans based on the
 cash payment interest rate of the loan, which may be different
 from the accrual interest rate of the loan for certain
 outstanding mortgage loans. The Company will recognize a
 realized gain at the date of the satisfaction of the loan at
 contractual terms for loans where there is a difference between
 the cash payment interest rate and the accrual interest rate.
 For all loans, the Company stops accruing income when an
 interest payment default either occurs or is probable.
 Impairments of mortgage loans are established as valuation
 allowances and recorded to net realized investment gains or
 losses.
 
 The Company has previously made commercial mortgage loans
 collateralized by real estate. The return on and the ultimate
 recovery of these loans are generally dependent on the
 successful operation, sale or refinancing of the real estate.
 The Company monitors the effects of current and expected real
 estate market conditions and other factors when assessing the
 collectibility of mortgage loans. When, in management's
 judgment, these assets are impaired, appropriate losses are
 recorded. Such estimates necessarily include assumptions, which
 may include anticipated improvements in selected market
 conditions for real estate, which may or may not occur. The
 more significant assumptions management considers involve
 estimates of the following: lease absorption and sales rates;
 real estate values and rates of return; operating expenses;
 required capital improvements; inflation; and sufficiency of
 any collateral independent of the real estate. Management
 believes that the carrying value approximates the fair value of
 these investments.
 
 Policy loans on insurance contracts are stated at unpaid
 principal balances.
 
 Income Taxes: The results of operations of the Company are
 included in the consolidated Federal income tax return of
 Merrill Lynch & Co. The Company has entered into a tax-sharing
 agreement with Merrill Lynch & Co. whereby the Company will
 calculate its current tax provision based on its operations.
 Under the agreement, the Company periodically remits to Merrill
 Lynch & Co. its current federal tax liability.
 
 The Company uses the asset and liability method in providing
 income taxes on all transactions that have been recognized in
 the financial statements.  The asset and liability method
 requires that deferred taxes be adjusted to reflect the tax
 rates at which future taxable amounts will be settled or
 realized.  The effects of tax rate changes on future deferred
 tax liabilities and deferred tax assets, as well as other
 changes in income tax laws, are recognized in net earnings in
 the period such changes are enacted.  Valuation allowances are
 established when necessary to reduce deferred tax assets to the
 amounts expected to be realized.
 
 Insurance companies are generally subject to taxes on premiums
 and in substantially all states are exempt from state income
 taxes.
 
 Separate Accounts: Separate Accounts are established in
 conformity with New York State Insurance Law, the Company's
 domiciliary state, and are generally not chargeable with
 liabilities that arise from any other business of the Company.
 Separate Accounts assets may be subject to general claims of
 the Company only to the extent the value of such assets exceeds
 Separate Accounts liabilities.
 
 Assets and liabilities of  Separate Accounts, representing net
 deposits and accumulated net investment earnings less fees,
 held primarily for the benefit of policyholders, are shown as
 separate captions in the balance sheets.
 
 Statements of Cash Flows: For the purpose of reporting cash
 flows, cash and cash equivalents include cash on hand and on
 deposit and short-term investments with original maturities of
 three months or less.
 
 Reclassifications: To facilitate comparisons with the current
 year, certain amounts in the prior years have been
 reclassified.
<PAGE>
 
NOTE 2.   ESTIMATED FAIR VALUE OF FINANCIAL INSTRUMENTS
 
 Financial instruments are carried at fair value or amounts that
 approximate fair value.  The carrying value of financial
 instruments as of December 31 were:
<TABLE>
<CAPTION> 
                                                         1996              1995
                                                     ------------      ------------
<S>                                                  <C>               <C> 
  Assets:                                                                   
   Fixed maturity securities (1)                      $  269,103        $  307,596
   Equity securities (1)                                  10,859             3,534
   Mortgage loans (2)                                      2,057             4,032
   Policy loans on insurance contracts (3)                85,548            82,073
   Cash and cash equivalents (4)                           7,828            17,387
   Separate Accounts assets (5)                          591,814           544,432
                                                     ------------      ------------
                                                                             
  Total financial instruments recorded as assets      $  967,209        $  959,054
                                                     ============      ============
</TABLE> 

 (1)  For publicly traded securities, the estimated fair value
      is determined using quoted market prices. For securities
      without a readily ascertainable market value, the Company
      has determined an estimated fair value using a discounted
      cash flow model, including provision for credit risk,
      based upon the assumption that such securities will be
      held to maturity. Such estimated fair values do not
      necessarily represent the values for which these
      securities could have been sold at the dates of the
      balance sheets. At December 31, 1996 and 1995 securities
      without a readily ascertainable market value, having an
      amortized cost of $55,323 and $63,071, had an estimated
      fair value of $57,018 and $66,367, respectively.
 
 (2)  The estimated fair value of mortgage loans approximates
      the carrying value. See Note 1 for a discussion of the
      Company's valuation process.
 
 (3)  The Company estimates the fair value of policy loans as
      equal to the book value of the loans. Policy loans are
      fully collateralized by the account value of the
      associated insurance contracts, and the spread between the
      policy loan interest rate and the interest rate credited
      to the account value held as collateral is fixed.
 
 (4)  The estimated fair value of cash and cash equivalents
      approximates the carrying value.
 
 (5)  Assets held in Separate Accounts are carried at quoted
      market values.
<PAGE>
 
NOTE 3:   INVESTMENTS

 The amortized cost and estimated fair value of investments in
 fixed maturity and equity securities as of December 31 were:
<TABLE>
<CAPTION>
                                                                                   1996               
                                                  ---------------------------------------------------------------------
                                                      Cost /            Gross              Gross            Estimated
                                                    Amortized         Unrealized         Unrealized            Fair
                                                      Cost              Gains              Losses             Value
                                                  ------------        -----------        -----------        -----------
<S>                                               <C>                 <C>                <C>                <C>
 Fixed maturity securities:                                                                                    
   Corporate debt securities                       $  212,290          $   4,743          $     556          $ 216,477
   Mortgage-backed securities                          46,204                827                383             46,648
   U.S. government and agencies                           830                230                  -              1,060
   Foreign governments                                  5,017                 10                109              4,918
                                                  ------------        -----------        -----------        -----------
                                                                                                                     
    Total fixed maturity securities                $  264,341          $   5,810          $   1,048          $ 269,103
                                                  ============        ===========        ===========        ===========
                                                                                                                    
  Equity securities:                                                                                               
   Non-redeemable preferred stocks                 $    7,237          $   2,429          $      38          $   9,628
   Common stocks                                        1,738                260                767              1,231
                                                  ------------        -----------        -----------        -----------
                                                                                                                                 
      Total equity securities                      $    8,975          $   2,689          $     805          $  10,859
                                                  ============        ===========        ===========        ===========

                                                                                   1995
                                                  ---------------------------------------------------------------------
                                                      Cost /            Gross              Gross             Estimated
                                                    Amortized         Unrealized         Unrealized             Fair
                                                      Cost              Gains              Losses              Value
                                                  ------------        -----------        -----------        -----------
  Fixed maturity securities:                                                                      
   Corporate debt securities                       $  225,859          $  10,251          $     493          $ 235,617
   Mortgage-backed securities                          64,347              2,126                 75             66,398
   U.S. government and agencies                         5,197                384                  -              5,581
                                                  ------------        -----------        -----------        -----------
                                                                                                                  
    Total fixed maturity securities                $  295,403          $  12,761          $     568          $ 307,596
                                                  ============        ===========        ===========        ===========
                                                                                                                 
  Equity securities:                                                                                            
   Non-redeemable preferred stocks                 $    1,251          $   1,149          $       -          $   2,400
   Common stocks                                        1,766                135                767              1,134
                                                  ------------        -----------        -----------        -----------
                                                                                                               
      Total equity securities                      $    3,017          $   1,284          $     767          $   3,534
                                                  ============        ===========        ===========        ===========
</TABLE>
<PAGE>
 The amortized cost and estimated fair value of fixed maturity
 securities at December 31, 1996 by contractual maturity were:

<TABLE>
<CAPTION>                                                  
                                                                                          Estimated
                                                                       Amortized            Fair
                                                                          Cost              Value
                                                                      -----------        -----------
<S>                                                                   <C>                <C>
  Fixed maturity securities:                                                                  
  Due in one year or less                                              $  36,508          $  36,550
  Due after one year through five years                                  125,060            128,214
  Due after five years through ten years                                  45,087             46,196
  Due after ten years                                                     11,482             11,495
                                                                      -----------        -----------
                                                                         218,137            222,455
  Mortgage-backed securities                                              46,204             46,648
                                                                      -----------        -----------
                                                                                              
    Total fixed maturity securities                                    $ 264,341          $ 269,103
                                                                      ===========        ===========
</TABLE>                                 

 Fixed maturity securities not due at a single maturity date
 have been included in the preceding table in the year of final
 maturity. Expected maturities may differ from contractual
 maturities because borrowers may have the right to call or
 prepay obligations with or without call or prepayment
 penalties.
 
 The amortized cost and estimated fair value of fixed maturity
 securities at December 31, 1996 by rating agency equivalent
 were:
<TABLE>
<CAPTION>
                                                                                          Estimated
                                                                        Amortized           Fair
                                                                          Cost              Value
                                                                      -----------        -----------
<S>                                                                   <C>                <C>   
  AAA                                                                  $  61,677          $  62,377
  AA                                                                      19,178             19,791
  A                                                                       64,297             65,091
  BBB                                                                    107,256            109,782
  Non-investment grade                                                    11,933             12,062
                                                                      -----------        -----------
                                                                                              
    Total fixed maturity securities                                    $ 264,341          $ 269,103
                                                                      ===========        ===========
</TABLE> 
<PAGE>
 The Company has recorded certain adjustments to deferred policy
 acquisition costs and policyholders' account balances in
 conjunction with investments classified as available-for-sale.
 The Company adjusts those assets and liabilities as if the
 unrealized investment gains or losses from securities
 classified as available-for-sale had actually been realized,
 with corresponding credits or charges reported directly to
 shareholder's equity. The following reconciles the net
 unrealized investment gain on investment securities classified
 as available-for-sale as of December 31:
<TABLE>
<CAPTION>
                                                                          1996               1995   
                                                                      -----------        -----------
<S>                                                                   <C>                <C>   
  Assets:
   Fixed maturity securities                                           $   4,762          $  12,193
   Equity securities                                                       1,884                517
                                                                      -----------        -----------
                                                                           6,646             12,710
                                                                      -----------        -----------
                                                                                             
  Liabilities:                                                                               
   Policyholders' account balances                                         4,962             10,342
   Federal income taxes - deferred                                           589                829
                                                                      -----------        -----------
                                                                           5,551             11,171
                                                                      -----------        -----------
                                                                                             
  Stockholder's equity:                                                                      
   Net unrealized investment gain on investment securities             $   1,095          $   1,539
                                                                      ===========        ===========
</TABLE> 

 Proceeds and gross realized investment gains and losses from
 the sale of available-for-sale securities for the years ended
 December 31 were:
<TABLE>
<CAPTION>
                                                                          1996               1995               1994
                                                                      -----------        -----------        -----------
<S>                                                                   <C>                <C>                <C>
  Proceeds                                                             $ 155,645          $  68,736          $ 128,183
  Gross realized investment gains                                          2,677              1,709             11,725
  Gross realized investment losses                                           508              1,640             13,255

</TABLE>
 
 The Company owned investment securities of $1,060 and $1,130
 that were deposited with insurance regulatory authorities at
 December 31, 1996 and 1995, respectively.
 
 The Company's investment in mortgage loans are principally
 collateralized by commercial real estate and are located in
 California.
 
 The Company had no impaired mortgage loans on real estate as of
 December 31, 1996 and 1995.
<PAGE>
 
 Additional information on impaired loans for the years ended
 December 31 follows:
<TABLE>
<CAPTION>
                                                                          1996               1995               1994
                                                                      -----------        -----------        -----------
<S>                                                                   <C>                <C>                <C> 
  Average investment in impaired loans                                 $       -          $   3,650          $   5,475
  Investment income recognized (cash basis)                                    -                233                275
</TABLE>
 
 Net investment income arose from the following sources for the
 years ended December 31:
<TABLE>
<CAPTION>
                                                                          1996               1995               1994
                                                                      -----------        -----------        -----------
<S>                                                                   <C>                <C>                <C>
  Fixed maturity securities                                            $  22,153          $  25,046          $  28,255
  Equity securities                                                          183                  -                  -
  Mortgage loans                                                             388                686                975
  Policy loans on insurance contracts                                      4,133              3,903              3,680
  Cash and cash equivalents                                                1,559              1,103                659
                                                                      -----------        -----------        -----------

  Gross investment income                                                 28,416             30,738             33,569
  Less investment expenses                                                  (896)              (919)              (890)
                                                                      -----------        -----------        -----------
  Net investment income                                                $  27,520          $  29,819          $  32,679
                                                                      ===========        ===========        ===========
</TABLE>

 Net realized investment gains (losses), including changes in
 valuation allowances, for the years ended December 31:
<TABLE>
<CAPTION>
                                                                         1996                1995               1994
                                                                      -----------        -----------        -----------
<S>                                                                   <C>                <C>                <C>   
  Fixed maturity securities                                            $     657          $     985          $  (1,767)
  Equity securities                                                        1,512               (916)               237
  Mortgage loans                                                               -               (334)              (688)
                                                                      -----------        -----------        -----------

  Net realized investment gains (losses)                               $   2,169          $    (265)         $  (2,218)
                                                                      ===========        ===========        ===========
</TABLE>

 The following is a reconciliation of the change in valuation
 allowances which have been recorded to reflect other-than-
 temporary declines in estimated fair value of mortgage loans
 for the years ended December 31, 1995 and 1994.  During 1996,
 there were no valuation allowances recorded:
<TABLE>
<CAPTION> 
                                                   Balance at          Additions                             Balance at
                                                   Beginning           Charged to          Write -              End
                                                    of Year            Operations           Downs             of Year
                                                  ------------        ------------       ----------         -----------
<S>                                               <C>                 <C>                <C>                <C> 
       1995                                        $    1,536          $       -          $  1,536           $       -
       1994                                               848                688                 -               1,536
</TABLE> 
<PAGE>
 The Company held no investments at December 31, 1996 which have
 been non-income producing for the preceding twelve months.

NOTE 4: FEDERAL INCOME TAXES
 
 The following is a reconciliation of the provision for income
 taxes based on earnings before federal income taxes, computed
 using the Federal statutory tax rate, with the provision for
 income taxes for the years ended December 31:
<TABLE>
<CAPTION> 
                                                                          1996               1995               1994
                                                                      -----------        -----------        -----------
<S>                                                                   <C>                <C>                <C> 
  Provision for income taxes computed at Federal statutory rate        $   4,833          $   5,334          $   2,552
  State corporate income taxes                                               (10)               (91)                 -
  Decrease in income taxes resulting from:                                                                     
     Dividend received deduction                                            (235)               (31)              (670)
     Other                                                                     2                (34)               (64)
                                                                      -----------        -----------        -----------
       Federal income tax provision                                    $   4,590          $   5,178          $   1,818
                                                                      ===========        ===========        ===========
</TABLE>

 The Federal statutory rate for each of the three years in the
 period ended December 31, 1996 was 35%.
 
 The Company provides for deferred income taxes resulting from
 temporary differences that arise from recording certain
 transactions in different years for income tax reporting
 purposes than for financial reporting purposes. The sources of
 these differences and the tax effect of each are as follows:
<TABLE>
<CAPTION>
                                                                            1996              1995              1994
                                                                      -----------        -----------        -----------
<S>                                                                   <C>                <C>                <C>   
  Deferred policy acquisition costs                                    $    (259)         $   1,239          $     887
  Policyholders' account balances                                          4,053                738                833
  Liability for guaranty fund assessments                                     50                  -                  -
  Investment adjustments                                                     642              1,445              1,117
  Other                                                                        2                 64               (806)
                                                                      -----------        -----------        -----------

  Deferred Federal income tax provision                                $   4,488          $   3,486          $   2,031
                                                                      ===========        ===========        ===========
</TABLE>
<PAGE>
 Deferred tax assets and liabilities as of December 31 are
 determined as follows:
<TABLE>
<CAPTION>
                                                                          1996               1995
                                                                      -----------        -----------
<S>                                                                   <C>                <C>    
  Deferred tax assets:
   Policyholders' account balances                                     $   4,224          $   8,277
   Investment adjustments                                                  1,939              2,581
   Other                                                                       -                  2
                                                                      -----------        -----------

      Total deferred tax assets                                            6,163             10,860
                                                                      -----------        -----------


  Deferred tax liabilities:                                                                    
   Deferred policy acquisition costs                                       6,150              6,409
   Liability for guaranty fund assessments                                    50                  -
   Net unrealized investment gain                                            589                829
                                                                      -----------        -----------
      Total deferred tax liabilities                                       6,789              7,238
                                                                      -----------        -----------

      Net deferred tax asset (liability)                               $    (626)         $   3,622
                                                                      ===========        ===========
</TABLE>

 The Company anticipates that all deferred tax assets will be
 realized, therefore no valuation allowance has been provided.
<PAGE>
NOTE 5: RELATED PARTY TRANSACTIONS

 The Company and MLIG are parties to a service agreement whereby
 MLIG has agreed to provide certain accounting, data processing,
 legal, actuarial, management, advertising and other services to
 the Company. Expenses incurred by MLIG in relation to this
 service agreement are reimbursed by the Company on an allocated
 cost basis. Charges billed to the Company by MLIG pursuant to
 the agreement were $4,258, $3,968 and $3,673 for 1996, 1995 and
 1994 respectively. The Company is allocated interest expense on
 its accounts payable to MLIG which approximates the daily
 Federal funds rate. Total intercompany interest paid was $74,
 $88 and $50 for 1996, 1995 and 1994, respectively.
 
 The Company and Merrill Lynch Asset Management, L.P. ("MLAM")
 are parties to a service agreement whereby MLAM has agreed to
 provide certain invested asset management services to the
 Company. The Company pays a fee to MLAM for these services
 through the MLIG service agreement. Charges attributable to
 this agreement and allocated to the Company by MLIG were $186,
 $206 and $203 for 1996, 1995 and 1994, respectively.
 
 The Company has a general agency agreement with Merrill Lynch
 Life Agency Inc. ("MLLA") whereby registered representatives of
 MLPF&S, who are the Company's licensed insurance agents,
 solicit applications for contracts to be issued by the Company.
 MLLA is paid commissions for the contracts sold by such agents.
 Commissions paid to MLLA were $1,334, $2,424 and $5,329 for
 1996, 1995 and 1994, respectively. Substantially all of these
 commissions were capitalized as deferred policy acquisition
 costs and are being amortized in accordance with the policy
 discussed in Note 1.
 
 In connection with the acquisition of a block of variable life
 insurance business from Monarch Life Insurance Company
 ("Monarch Life"), the Company borrowed funds from Merrill Lynch
 & Co. to partially finance the transaction. As of December 31,
 1996 and 1995, the outstanding balance of these loans was
 $3,075. Repayments made on these loans during 1996, 1995, and
 1994 were $0, $1,261 and $1,214, respectively. Interest was
 calculated on these loans at LIBOR plus 150 basis points.
 Intercompany interest paid on these loans during 1996, 1995 and
 1994 was $366, $359 and $302, respectively.

NOTE 6: STOCKHOLDER'S EQUITY AND STATUTORY REGULATIONS

 At December 31, 1996 and 1995, $41,214 and $58,790,
 respectively, of stockholder's equity was available for
 distribution to MLIG. Notice of intention to declare a dividend
 must be filed with the New York Superintendent of Insurance who
 may disallow the payment. During 1996, the Company paid a
 $35,000 dividend to MLIG. No dividends were declared or paid
 during 1995 and 1994. Statutory capital and surplus at December
 31, 1996 and 1995, was $52,895 and $72,113, respectively.
 
 Applicable insurance department regulations require that the
 Company report its accounts in accordance with statutory
 accounting practices. Statutory accounting practices primarily
 differ from the principals utilized in theses financial
 statements by charging policy acquisition costs to expense as
 incurred, establishing future policy benefit reserves using
 different actuarial assumptions, not providing for deferred
 income taxes and valuing securities on a different basis. The
 Company's statutory net income for 1996, 1995 and 1994 was
 $12,884, $3,080 and $3,816, respectively.
 
 The National Association of Insurance Commissioners ("NAIC")
 utilized the Risk Based Capital ("RBC") adequacy monitoring
 system. The RBC calculates the amount of adjusted capital which
 a life insurance company should have based upon that company's
 risk profile. As of December 31, 1996, and 1995, based on the
 RBC formula, the Company's total adjusted capital level was
 626% and 709%, respectively, of the minimum amount of capital
 required to avoid regulatory action.

NOTE 7: COMMITMENTS AND CONTINGENCIES

 State insurance laws generally require that all life insurers
 who are licensed to transact business within a state become
 members of the state's life insurance guaranty association.
 These associations have been established for the protection of
 policyholders from loss (within specified limits) as a result
 of the insolvency of an insurer. At the time an insolvency
 occurs, the guaranty association assesses the remaining members
 of the association an amount sufficient to satisfy the
 insolvent insurer's policyholder obligations (within specified
 limits). Based upon the public information available at this
 time, management believes the Company has no material financial
 obligations to state guaranty associations.
 
 In the normal course of business, the Company is subject to
 various claims and assessments. Management believes the
 settlement of these matters would not have a material effect on
 the financial position or results of operations of the Company.
 
                          * * * * * *





<PAGE>   13
                                   SIGNATURES

                 Pursuant to the requirements of Section 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 26, 1997                 By:  /s/ Joseph E. Crowne, Jr.         
                                         ---------------------------------
                                         Joseph E. Crowne, Jr.
                                         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.

<TABLE>
<CAPTION>
Signature                                  Title                                   Date
---------                                  -----                                   ----
<S>                                        <C>                                     <C>
            *
-------------------------                  Chairman of the Board, President        March 26, 1997
Anthony J. Vespa                           and Chief Executive Officer             --------------
                                                                      
/s/ Joseph E. Crowne, Jr.                  Director, Senior Vice President,        March 26, 1997
-------------------------                  Chief Financial Officer, Chief          --------------
Joseph E. Crowne, Jr.                      Actuary and Treasurer         

/s/ Barry G. Skolnick                      Director, Senior Vice President and     March 26, 1997
-------------------------                  General Counsel*                        --------------
Barry G. Skolnick                          

            *
-------------------------                  Director, Senior Vice President and     March 26, 1997
David M. Dunford                           Chief Investment Officer                --------------
</TABLE>
<PAGE>   14
<TABLE>
<S>                                        <C>                                     <C>
            *
-------------------------                  Director and Senior Vice President      March 26, 1997
Gail R. Farkas                                                                     --------------

            *
-------------------------                  Director, Vice President and Senior     March 26, 1997
Michael P. Cogswell                        Counsel                                 --------------

            *
-------------------------                  Director                                March 26, 1997
Frederick J.C. Butler                                                              --------------

            *
-------------------------                  Director                                March 26, 1997
Robert L. Israeloff                                                                --------------

            *
-------------------------                  Director                                March 26, 1997
Allen N. Jones                                                                     --------------

            *
-------------------------                  Director                                March 26, 1997
Cynthia L. Kahn                                                                    --------------

            *
-------------------------                  Director                                March 26, 1997
Robert A. King                                                                     --------------

            *
-------------------------                  Director                                March 26, 1997
Irving M. Pollack                                                                  --------------

            *
-------------------------                  Director                                March 26, 1997
William A. Wilde                                                                   --------------
</TABLE>




*Signing in his own capacity and as Attorney-in-Fact.
<PAGE>   15
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.
<PAGE>   16
                                 EXHIBIT INDEX

<TABLE>
<CAPTION>
Exhibit No.          Description                                    Location
-----------          -----------                                    --------
<S>                 <C>                                             <C>
3.1                  Certificate of Amendment and Restatement       Incorporated by reference to Exhibit 3(a)
                     of Charter of Royal Tandem Life Insurance      to the Registrant's registration statement
                     Company.                                       on Form S-1, File No. 33-34562, filed
                                                                    April 26, 1990.

3.2                  By-Laws of Royal Tandem Life Insurance         Incorporated by reference to Exhibit 3(b)
                     Company.                                       to the Registrant's registration statement
                                                                    on Form S-1, File No. 33-34562, filed
                                                                    April 26, 1990.

3.3                  Certificate of Amendment of the Charter of     Incorporated by reference to Exhibit 3(c)
                     ML Life Insurance Company of New York.         to Post-Effective Amendment No. 3 to the
                                                                    Registrant's registration statement on
                                                                    Form S-1, File No. 33-34562, filed March
                                                                    30, 1992.

3.4                  By-Laws of ML Life                             Incorporated by reference to
                     Insurance Company of New York.                 Exhibit 3(d) to Post-Effective Amendment No. 3
                                                                    to the Registrant's registration statement on
                                                                    Form S-1, File No. 33-34562, filed March 30,
                                                                    1992.
</TABLE>





                                    - E-1 -
<PAGE>   17
<TABLE>
<S>                  <C>                                            <C>
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           Incorporated by reference to Exhibit 4(b)
                     Application.                                   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.
</TABLE>





                                    - E-2 -
<PAGE>   18
<TABLE>
<S>                  <C>                                            <C>
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           Incorporated by reference to Exhibit
                     MLNY-AY-991/94.                                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          Incorporated by reference to Exhibit
                     MLNY-AYQ-991/94.                               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.
</TABLE>





                                    - E-3 -
<PAGE>   19




<TABLE>
<S>                  <C>                                            <C>
10.1                 General Agency Agreement between Royal         Incorporated by reference to Exhibit 10(a)
                     Tandem Life Insurance Company and Merrill      to Pre-Effective Amendment No. 1 to the
                     Lynch Life Agency Inc.                         Registrant's registration statement on
                                                                    Form S-1, File No. 33-34562, filed October
                                                                    16, 1990.

10.2                 Investment Management Agreement by and         Incorporated by reference to Exhibit 10(b)
                     between Royal Tandem Life Insurance            to Pre-Effective Amendment No. 1 to the
                     Company and Equitable Capital Management       Registrant's registration statement on
                     Corporation.                                   Form S-1, File No. 33-34562, filed October
                                                                    16, 1990.

10.3                 Shareholders' Agreement by and among The       Incorporated by reference to Exhibit 10(c)
                     Equitable Life Assurance Society of the        to Pre-Effective Amendment No. 1 to the
                     United States and Merrill Lynch & Co.,         Registrant's registration statement on
                     Inc. and Tandem Financial Group, Inc.          Form S-1, File No. 33-34562, filed October
                                                                    16, 1990.

10.4                 Service Agreement by and between Royal         Incorporated by reference to Exhibit 10(d)
                     Tandem Life Insurance Company and Tandem       to Pre-Effective Amendment No. 1 to the
                     Financial Group, Inc.                          Registrant's registration statement on
                                                                    Form S-1, File No. 33-34562, filed October
                                                                    16, 1990.
</TABLE>





                                    - E-4 -
<PAGE>   20
<TABLE>
<S>                  <C>                                            <C>
10.5                 Service Agreement by and between Tandem        Incorporated by reference to Exhibit 10(e)
                     Financial Group, Inc. and Merrill Lynch &      to Pre-Effective Amendment No. 1 to the
                     Co., Inc.                                      Registrant's registration statement on
                                                                    Form S-1, File No. 33-34562, filed October
                                                                    16, 1990.

10.6                 Form of Investment Management Agreement by     Incorporated by reference to Exhibit 10(f)
                     and between Royal Tandem Life Insurance        to Post-Effective Amendment No. 1 to the
                     Company and Merrill Lynch Asset                Registrant's registration statement on
                     Management, Inc.                               Form S-1, File No. 33-34562, filed March
                                                                    7, 1991.

10.7                 Assumption Reinsurance Agreement between       Incorporated by reference to Exhibit 10(g)
                     Merrill Lynch Life Insurance Company,          to Post-Effective Amendment No. 3 to the
                     Tandem Insurance Group, Inc. and Royal         Registrant's registration statement on
                     Tandem Life Insurance Company and Family       Form S-1, File No. 33-34562, filed March
                     Life Insurance Company.                        30, 1992.


10.8                 Indemnity Agreement between ML Life            Incorporated by reference to Exhibit 10(h)
                     Insurance Company of New York and Merrill      to Post-Effective Amendment No. 3 to the
                     Lynch Life Agency, Inc.                        Registrant's registration statement on
                                                                    Form S-1, File No. 33-34562, filed March
                                                                    30, 1992.
</TABLE>





                                    - E-5 -
<PAGE>   21
<TABLE>
<S>                  <C>                                            <C>
10.9                 Amended General Agency Agreement between       Incorporated by reference to Exhibit 10(i)
                     ML Life Insurance Company of New York and      to Post-Effective Amendment No. 3 to the
                     Merrill Lynch Life Agency, Inc.                Registrant's registration statement on
                                                                    Form S-1, File No. 33-34562, filed March
                                                                    30, 1992.

10.10                Amended Management Agreement between ML        Incorporated by reference to Exhibit 10(j)
                     Life Insurance Company of New York and         to the Registrant's registration statement
                     Merrill Lynch Asset Management, Inc.           on Form S-1, File No. 33-60288, filed
                                                                    March 30, 1993.

10.11                Mortgage Loan Servicing Agreement between      Incorporated by reference to Exhibit 10(k)
                     ML Life Insurance Company of New York and      to the Registrant's registration statement
                     Merrill Lynch & Co., Inc.                      on Form S-1, File No. 33-60288, filed
                                                                    March 29, 1995.

24.1                 Power of attorney of Frederick J.C.            Incorporated by reference to Exhibit 24(a)
                     Butler.                                        to Post-Effective Amendment No. 1 to the
                                                                    Registrant's registration statement on
                                                                    Form S-1, File No. 33-60288, filed March
                                                                    31, 1994.

24.2                 Power of attorney of Michael P. Cogswell.      Incorporated by reference to Exhibit 24(b)
                                                                    to Post-Effective Amendment No. 1 to the
                                                                    Registrant's registration statement on
                                                                    Form S-1, File No. 33-60288, filed March
                                                                    31, 1994.
</TABLE>





                                    - E-6 -
<PAGE>   22
<TABLE>
<S>                  <C>                                            <C>
24.3                 Power of attorney of Joseph E. Crowne.         Incorporated by reference to Exhibit 24(d)
                                                                    to Post-Effective Amendment No. 1 to the
                                                                    Registrant's registration statement on
                                                                    Form S-1, File No. 33-60288, filed March
                                                                    31, 1994.

24.4                 Power of attorney of David M. Dunford.         Incorporated by reference to Exhibit 24(e)
                                                                    to Post-Effective Amendment No. 1 to the
                                                                    Registrant's registration statement on
                                                                    Form S-1, File No. 33-60288, filed March
                                                                    31, 1994.

24.5                 Power of attorney of Robert L. Israeloff.      Incorporated by reference to Exhibit 24(g)
                                                                    to Post-Effective Amendment No. 1 to the
                                                                    Registrant's registration statement on
                                                                    Form S-1, File No. 33-60288, filed March
                                                                    31, 1994.

24.6                 Power of attorney of Allen N. Jones.           Incorporated by reference to Exhibit 24(j)
                                                                    to Post-Effective Amendment No. 6 to the
                                                                    Registrant's registration statement on
                                                                    Form S-1, File No. 33-60288, filed March
                                                                    27, 1997.
</TABLE>





                                    - E-7 -
<PAGE>   23
<TABLE>
<S>                  <C>                                            <C>
24.7                 Power of attorney of Cynthia L. Kahn.          Incorporated by reference to Exhibit 24(i)
                                                                    to Post-Effective Amendment No. 1 to the
                                                                    Registrant's registration statement on
                                                                    Form S-1, File No. 33-60288, filed March
                                                                    31, 1994.

24.8                 Power of attorney of Robert A. King.           Incorporated by reference to Exhibit 24(j)
                                                                    to Post-Effective Amendment No. 1 the
                                                                    Registrant's registration statement on
                                                                    Form S-1, File No. 33-60288, filed March
                                                                    31, 1994.

24.9                 Power of attorney of Irving M. Pollack.        Incorporated by reference to Exhibit 24(k) to
                                                                    Post-Effective Amendment No. 1 to the
                                                                    Registrant's registration statement on Form
                                                                    S-1, File No. 33-60288, filed March 31, 1994.

24.10                Power of attorney of Barry G. Skolnick.        Incorporated by reference to Exhibit 24(l)
                                                                    to Post-Effective Amendment No. 1 to the
                                                                    Registrant's registration statement on
                                                                    Form S-1, File No. 33-60288, filed March
                                                                    31, 1994.
</TABLE>





                                    - E-8 -
<PAGE>   24
<TABLE>
<S>                 <C>                                             <C>
24.11               Power of attorney of William A. Wilde.          Incorporated by reference to Exhibit 24(m)
                                                                    to Post-Effective Amendment No. 1 to the
                                                                    Registrant's registration statement on
                                                                    Form S-1, File No. 33-60288, filed March
                                                                    31, 1994.

24.12               Power of attorney of Anthony J. Vespa.          Incorporated by reference to Exhibit 24(n)
                                                                    to Post-Effective Amendment No. 1 to the
                                                                    Registrant's registration statement on
                                                                    Form S-1, File No. 33-60288, filed March
                                                                    31, 1994.

24.13               Power of Attorney of
                    Gail R. Farkas                                  Incorporated by reference to Exhibit 24(g) to
                                                                    Post-Effective Amendment No. 5 to the
                                                                    Registrant's registration statement on Form
                                                                    S-1, File No. 33-60288, filed March 26, 1996.

99.1                Preliminary prospectus contained in             Exhibit 99.1
                    Post-Effective Amendment No. 6 to the
                    Registrant's registration statement, filed
                    March 27, 1997, pursuant to the Securities
                    Act of 1933, File No. 33-60288.
</TABLE>





                                    - E-9 -