----

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**UNITED      STATES**

**SECURITIES      AND EXCHANGE COMMISSION**

**FORM      10-Q**

**QUARTERLY      REPORT PURSUANT TO SECTION 13 OR 15(d)**

**OF      THE SECURITIES EXCHANGE ACT 0F 1934**

| For                the quarterly period ended **June                30, 2006** | Commission                File Numbers: **2-99959,                33-29851, 33-31711, 33-41858, 33-43008, 33-58853, 333-11699, 333-77041,                333-62837, 333-45923, 333-88069, 333-39306, 333-46566, 333-82816,                333-82824, 333-111636, 333-130699, 333-130703, 333-130704. 333-133684,                333-133685, and 333-133686** |
|--------------------------------------------------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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

| **Delaware**                                                                  | **04-2461439**                                   |
|-------------------------------------------------------------------------------|--------------------------------------------------|
| (State                or other jurisdiction of incorporation or organization) | (IRS                Employer Identification No.) |

| **One                  Sun Life Executive Park, Wellesley Hills, MA** | **02481**                   |
|-----------------------------------------------------------------------|-----------------------------|
| (Address                  of principal executive offices)             | (Zip                  Code) |

**(781)      237-6030**

**NONE**

| Large                  accelerated filer p  | Accelerated                  filer p  | Non-accelerated                  filer x  |
|--------------------------------------------------|--------------------------------------------|------------------------------------------------|

**THE      REGISTRANT MEETS THE CONDITIONS SET FORTH IN GENERAL INSTRUCTIONS H(1) (a)      AND      (b) OF FORM 10-Q AND IS THEREFORE FILING THIS FORM WITH THE REDUCED DISCLOSURE      FORMAT PERMITTED BY GENERAL INSTRUCTION H.**

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

**(A          Wholly-Owned Subsidiary of Sun Life of Canada (U.S.) Holdings,          Inc.)**

**QUARTERLY          REPORT ON FORM 10-Q FOR THE PERIOD ENDED JUNE 30, 2006**

**TABLE          OF CONTENTS**

|   | Page |
|--------|------|

| **PART                    I -** | **Financial                    Information**                                                                                                                                                                       |    |
|---------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------|
|                            |                                                                                                                                                                                                               |    |
| Item                    1.      | Financial                    Statements:                                                                                                                                                                           |    |
|                            |                                                                                                                                                                                                               |    |
|                            | Condensed                    Consolidated Statements of Income for the                    six-month periods ended June 30, 2006 and                    2005 (Unaudited)                                            |  3 |
|                            |                                                                                                                                                                                                               |    |
|                            | Condensed                    Consolidated Statements of Income for the                    three-month periods ended June 30, 2006                    and 2005 (Unaudited)                                          |  4 |
|                            |                                                                                                                                                                                                               |    |
|                            | Condensed                    Consolidated Balance Sheets as of June 30,                    2006 and December 31, 2005                    (Unaudited)                                                               |  5 |
|                            |                                                                                                                                                                                                               |    |
|                            | Condensed                    Consolidated Statements of Comprehensive                    Income for the six and three-month periods                    ended June 30, 2006 and 2005                    (Unaudited) |  6 |
|                            |                                                                                                                                                                                                               |    |
|                            | Condensed                    Consolidated Statements of Stockholder’s                    Equity for the six-month periods ended June                    30, 2006 and 2005 (Unaudited)                        |  7 |
|                            |                                                                                                                                                                                                               |    |
|                            | Condensed                    Consolidated Statements of Cash Flows for the                    six-month periods ended June 30, 2006                    and 2005 (Unaudited)                                        |  8 |
|                            |                                                                                                                                                                                                               |    |
|                            | Notes                    to Unaudited Condensed Consolidated Financial                    Statements                                                                                                               | 10      |
|                            |                                                                                                                                                                                                               |    |
| Item                    2.      | Management's                    Discussion and Analysis of Financial Condition                    and Results of Operations                                                                                        | 24      |
|                            |                                                                                                                                                                                                               |    |
| Item                    3.      | Quantitative                    and Qualitative Disclosures About Market                    Risk                                                                                                                   | 35      |
|                            |                                                                                                                                                                                                               |    |
| Item                    4.      | Controls                    and Procedures                                                                                                                                                                         | 35      |

| **PART                    II -** | **Other                    Information**                                                          |   |
|----------------------------------|---------------------------------------------------------------------------------------------------|--------|
|                             |                                                                                              |   |
| Item                    1.       | Legal                    Proceedings                                                              | 35     |
|                             |                                                                                              |   |
| Item                    1A.      | Risk                    Factors                                                                   | 35     |
|                             |                                                                                              |   |
| Item                    2.       | Unregistered                    Sales of Equity Securities and Use of                    Proceeds | 35     |
|                             |                                                                                              |   |
| Item                    3.       | Defaults                    Upon Senior Securities                                                | 35     |
|                             |                                                                                              |   |
| Item                    4.       | Submission                    of Matters to a Vote of Security                    Holders         | 35     |
|                             |                                                                                              |   |
| Item                    5.       | Other                    Information                                                              | 35     |
|                             |                                                                                              |   |
| Item                    6.       | Exhibits                                                                                          | 36     |

----

**PART          I - FINANCIAL INFORMATION**

**Item          1. Financial Statements**

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

**(A          Wholly-Owned Subsidiary of Sun Life of Canada (U.S.) Holdings,          Inc.)**

**CONDENSED          CONSOLIDATED STATEMENTS OF INCOME**

|                                                                                                                                    |   | **Unaudited**  |
|-----------------------------------------------------------------------------------------------------------------------------------------|--------|----------------|
|                                                                                                                                    |   |  **2006** |   |  **2005** |
|                                                                                                                                    |   |           |   |   |
| **Revenues**                                                                                                                            |   |           |   |   |
|                                                                                                                                    |   |           |   |   |
| Premiums                    and annuity considerations                                                                                  | $      | 30,628         | $ | 25,336 |
| Net                    investment income                                                                                                |   | 513,952        |   | 581,630 |
| Net                    derivative income (loss)                                                                                         |   | 226,034        |   | (120,939) |
| Net                    realized investment (losses) gains                                                                               |   | (22,442)       |   | 22,532 |
| Fee                    and other income                                                                                                 |   | 190,556        |   | 179,341 |
|                                                                                                                                    |   |           |   |   |
| Total                    revenues                                                                                                       |   | 938,728        |   | 687,900 |
|                                                                                                                                    |   |           |   |   |
| **Benefits                    and Expenses**                                                                                            |   |           |   |   |
|                                                                                                                                    |   |           |   |   |
| Interest                    credited                                                                                                    |   | 302,263        |   | 319,832 |
| Interest                    expense                                                                                                     |   | 63,251         |   | 61,084 |
| Policyowner                    benefits                                                                                                 |   | 71,198         |   | 68,508 |
| Other                    operating expenses                                                                                             |   | 113,776        |   | 94,775 |
| Amortization                    of deferred policy acquisition costs ("DAC") and                    value of business acquired ("VOBA") |   |  190,212  |   |  98,828 |
|                                                                                                                                    |   |           |   |   |
| Total                    benefits and expenses                                                                                          |   | 740,700        |   | 643,027 |
|                                                                                                                                    |   |           |   |   |
| Income                    before income tax expense and minority interest                                                               |   | 198,028        |   | 44,873 |
|                                                                                                                                    |   |           |   |   |
| Income                    tax expense                                                                                                   |   | 61,399         |   | 7,237 |
|                                                                                                                                    |   |           |   |   |
| Income                    before minority interest                                                                                      |   | 136,629        |   | 37,636 |
|                                                                                                                                    |   |           |   |   |
| Minority                    interest share of loss                                                                                      |   | -              |   | (1,214) |
|                                                                                                                                    |   |           |   |   |
| Net                    income                                                                                                           | $      | 136,629        | $ | 38,850 |

*The          accompanying notes are an integral part of the condensed consolidated financial          statements.*

----

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

**(A          Wholly-Owned Subsidiary of Sun Life of Canada (U.S.) Holdings,          Inc.)**

**CONDENSED          CONSOLIDATED STATEMENTS OF INCOME**

|                                                                 |   | **Unaudited** |
|----------------------------------------------------------------------|--------|---------------|
|                                                                 |   | **2006**      |   | **2005** |
|                                                                 |   |          |   |   |
| **Revenues**                                                         |   |          |   |   |
|                                                                 |   |          |   |   |
| Premiums                    and annuity considerations               | $      | 15,490        | $ |  12,389 |
| Net                    investment income                             |   | 270,372       |   | 308,803 |
| Net                    derivative income (loss)                      |   | 101,506       |   | (144,113) |
| Net                    realized investment (losses) gains            |   | (22,365)      |   | 17,030 |
| Fee                    and other income                              |   | 99,109        |   | 90,326 |
|                                                                 |   |          |   |   |
| Total                    revenues                                    |   | 464,112       |   | 284,435 |
|                                                                 |   |          |   |   |
| **Benefits                    and Expenses**                         |   |          |   |   |
|                                                                 |   |          |   |   |
| Interest                    credited                                 |   | 144,638       |   | 153,250 |
| Interest                    expense                                  |   | 31,977        |   | 30,258 |
| Policyowner                    benefits                              |   | 35,561        |   | 36,321 |
| Other                    operating expenses                          |   | 60,958        |   | 25,686 |
| Amortization                    of DAC and VOBA                      |   | 84,937        |   | 48,941 |
|                                                                 |   |          |   |   |
| Total                    benefits and expenses                       |   | 358,071       |   | 294,456 |
|                                                                 |   |          |   |   |
| Income                    (loss) before income tax expense (benefit) |   | 106,041       |   | (10,021) |
|                                                                 |   |          |   |   |
| Income                    tax expense (benefit)                      |   | 33,073        |   | (13,821) |
|                                                                 |   |          |   |   |
| Net                    income                                        | $      | 72,968        | $ | 3,800 |

*The          accompanying notes are an integral part of the condensed consolidated financial          statements.*

----

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

**(A          Wholly-Owned Subsidiary of Sun Life of Canada (U.S.) Holdings,          Inc.)**

**CONDENSED          CONSOLIDATED BALANCE SHEETS**

|                                                                                                                                                                                            |    | **Unaudited**                        |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------|--------------------------------------|
| **ASSETS**                                                                                                                                                                                      |    | **June                    30, 2006** |   | **December                    31, 2005** |
| Investments                                                                                                                                                                                     |    |                                 |   |   |
| Available-for-sale                    fixed maturities at fair value (amortized cost of $14,616,730                    and $15,620,827 in 2006 and 2005, respectively)                          |  $ |  14,237,535                     |  $ |  15,677,148 |
| Trading                    fixed maturities at fair value (amortized cost of $2,911,228                    and                    $1,982,762                    in 2006 and 2005, respectively) |    | 2,862,848                            |   | 1,984,848 |
| Subordinated                    note from affiliate held-to-maturity (fair value of $631,972and                    $645,755 in 2006 and 2005, respectively)                                     |    |  600,000                        |   |  600,000 |
| Mortgage                    loans                                                                                                                                                               |    | 1,986,266                            |   | 1,739,370 |
| Derivative                    instruments - receivable                                                                                                                                          |    | 655,327                              |   | 487,947 |
| Limited                    partnerships                                                                                                                                                         |    | 203,533                              |   | 222,148 |
| Real                    estate                                                                                                                                                                  |    | 168,938                              |   | 170,510 |
| Policy                    loans                                                                                                                                                                 |    | 699,652                              |   | 701,769 |
| Other                    invested assets                                                                                                                                                        |    | 1,088,822                            |   | 554,917 |
| Cash                    and cash equivalents                                                                                                                                                    |    | 324,878                              |   | 347,654 |
| Total                    investments                                                                                                                                                            |    | 22,827,799                           |   | 22,486,311 |
|                                                                                                                                                                                            |    |                                 |   |   |
| Accrued                    investment income                                                                                                                                                    |    | 276,362                              |   | 261,507 |
| Deferred                    policy acquisition costs                                                                                                                                            |    | 1,442,347                            |   | 1,341,377 |
| Value                    of business acquired                                                                                                                                                   |    | 72,116                               |   | 53,670 |
| Deferred                    federal income taxes                                                                                                                                                |    | 1,340                                |   | 4,360 |
| Goodwill                                                                                                                                                                                        |    | 701,451                              |   | 701,451 |
| Receivable                    for investments sold                                                                                                                                              |    | 65,639                               |   | 79,860 |
| Reinsurance                    receivable                                                                                                                                                       |    | 1,831,607                            |   | 1,860,680 |
| Other                    assets                                                                                                                                                                 |    | 144,760                              |   | 122,239 |
| Separate                    account assets                                                                                                                                                      |    | 19,375,536                           |   | 19,095,391 |
|                                                                                                                                                                                            |    |                                 |   |   |
| Total                    assets                                                                                                                                                                 | $       | 46,738,957                           | $ | 46,006,846 |
|                                                                                                                                                                                            |    |                                 |   |   |
| **LIABILITIES**                                                                                                                                                                                 |    |                                 |   |   |
|                                                                                                                                                                                            |    |                                 |   |   |
| Contractholder                    deposit funds and other policy liabilities                                                                                                                    | $       | 18,819,464                           | $ | 18,668,578 |
| Future                    contract and policy benefits                                                                                                                                          |    | 748,955                              |   | 768,297 |
| Payable                    for investments purchased                                                                                                                                            |    | 245,446                              |   | 248,733 |
| Accrued                    expenses and taxes                                                                                                                                                   |    | 105,203                              |   | 150,318 |
| Debt                    payable to affiliates                                                                                                                                                   |    | 1,225,000                            |   | 1,125,000 |
| Partnership                    capital securities                                                                                                                                               |    | 607,826                              |   | 607,826 |
| Reinsurance                    payable to affiliate                                                                                                                                             |    | 1,627,810                            |   | 1,652,517 |
| Derivative                    instruments - payable                                                                                                                                             |    | 78,631                               |   | 197,765 |
| Other                    liabilities                                                                                                                                                            |    | 1,292,785                            |   | 766,657 |
| Separate                    account liabilities                                                                                                                                                 |    | 19,375,536                           |   | 19,095,391 |
|                                                                                                                                                                                            |    |                                 |   |   |
| Total                    liabilities                                                                                                                                                            |    | 44,126,656                           |   | 43,281,082 |
|                                                                                                                                                                                            |    |                                 |   |   |
| Commitments                    and contingencies - Note 5                                                                                                                                       |    |                                 |   |   |
|                                                                                                                                                                                            |    |                                 |   |   |
|                                                                                                                                                                                            |    |                                 |   |   |
| **STOCKHOLDER’S                    EQUITY**                                                                                                                                               |    |                                 |   |   |
|                                                                                                                                                                                            |    |                                 |   |   |
| Common                    stock, $1,000 par value - 10,000 shares authorized; 6,437 shares                    issued                    and outstanding                                         | $       |  6,437                          |  $ |  6,437 |
| Additional                    paid-in capital                                                                                                                                                   |    | 2,141,932                            |   | 2,138,880 |
| Accumulated                    other comprehensive (loss) income                                                                                                                                |    | (133,884)                            |   | 19,260 |
| Retained                    earnings                                                                                                                                                            |    | 597,816                              |   | 561,187 |
|                                                                                                                                                                                            |    |                                 |   |   |
| Total                    stockholder’s equity                                                                                                                                             |    | 2,612,301                            |   | 2,725,764 |
|                                                                                                                                                                                            |    |                                 |   |   |
| Total                    liabilities and stockholder’s equity                                                                                                                             | $       | 46,738,957                           | $ | 46,006,846 |

*The          accompanying notes are an integral part of the condensed consolidated financial          statements.*

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

**(A          Wholly-Owned Subsidiary of Sun Life of Canada (U.S.) Holdings,          Inc.)**

**CONDENSED          CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME**

|                                                                                                                                                            |   | **Unaudited**   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------|
|                                                                                                                                                            |   |  **2006**  |   |  **2005** |
|                                                                                                                                                            |   |            |   |   |
| Net                    income                                                                                                                                   | $      | 136,629         | $ | 38,850 |
|                                                                                                                                                            |   |            |   |   |
| Other                    comprehensive (loss) income:                                                                                                           |   |            |   |   |
| Net                    change in unrealized holding (losses) gains on available-for-sale                    securities, net of tax and policyholder amounts (1) |   |  (177,198) |   |  39,738  |
| Minimum                    pension liability adjustment, net of tax (2)                                                                                         |   | 1,289           |   | - |
| Reclassification                    adjustments of realized investment losses (gains)into                    net income(3)                                      |   |  22,765    |   |  (35,159) |
| Other                    comprehensive (loss) income                                                                                                            |   | (153,144)       |   | 4,579 |
|                                                                                                                                                            |   |            |   |   |
| Comprehensive                    (loss) income                                                                                                                  | $      | (16,515)        | $ | 43,429 |

| (1)   | Net                  change in unrealized holding (losses) gains on available-for-sale                  securities is reflected net of tax benefit (expense) of $95.4 million                  and                  $(21.4) for the six-month periods ended June 30, 2006 and 2005,                  respectively. |
|-----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (2)   | Minimum                  pension liability adjustment is reflected net of tax (expense)                  of $(0.7)                  million for the six-month period ended June 30,                  2006. |
|-----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (3)   | Reclassification                  adjustment of realized investment losses (gains) is reflected net                  of tax                  (benefit) expense of $(12.3) million and $18.9 million for the                  six-month                  periods ended June 30, 2006 and 2005, respectively. |
|-----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                                                                                                                            |   | **Unaudited**  |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------|
|                                                                                                                                                            |   |  **2006** |   |  **2005** |
|                                                                                                                                                            |   |           |   |   |
| Net                    income                                                                                                                                   | $      | 72,968         | $ | 3,800 |
|                                                                                                                                                            |   |           |   |   |
| Other                    comprehensive (loss) income:                                                                                                           |   |           |   |   |
| Net                    change in unrealized holding (losses) gains on available-for-sale                    securities, net of tax and policyholder amounts (4) |   |  (78,023) |   |  129,959 |
| Reclassification                    adjustments of realized investment losses (gains)into                    net income (5)                                     |   |  16,392   |   |  (26,856) |
| Other                    comprehensive (loss) income                                                                                                            |   | (61,631)       |   | 103,103 |
|                                                                                                                                                            |   |           |   |   |
| Comprehensive                    income                                                                                                                         | $      | 11,337         | $ | 106,903 |

| (4)   | Net                  change in unrealized holding (losses) gains on available-for-sale                  securities is reflected net of tax benefit (expense) of $42.0 million                  and                  $(70.0) million for the three-month periods ended June 30, 2006                  and 2005,                  respectively. |
|-----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (5)   | Reclassification                  adjustment of realized investment losses (gains) is reflected net                  of tax                  (benefit) expense of $(8.8) million and $14.5 million for the three-month                  periods ended June 30, 2006 and 2005, respectively. |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

*The          accompanying notes are an integral part of the condensed consolidated financial          statements.*

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

**(A          Wholly-Owned Subsidiary of Sun Life of Canada (U.S.) Holdings,          Inc.)**

**CONDENSED          CONSOLIDATED STATEMENTS OF STOCKHOLDER’S EQUITY**

**Unaudited**

|   |                                            |   |       |   |           |   | **Accumulated**                      |   |         |   |              |
|--------|-------------------------------------------------|--------|------------|--------|----------------|--------|--------------------------------------|--------|--------------|--------|-------------------|
|   |                                            |   |       |   | **Additional** |   | **Other**                            |   |         |   | **Total**         |
|   |                                            |   | **Common** |   | **Paid-In**    |   | **Comprehensive**                    |   | **Retained** |   | **Stockholder's** |
|   |                                            |   | **Stock**  |   | **Capital**    |   | **(Loss)                    Income** |   | **Earnings** |   | **Equity**        |
|   |                                            |   |       |   |           |   |                                 |   |         |   |              |
|   | Balance                    at December 31, 2004 | $      | 6,437      | $      | 2,131,888      | $      | 180,638                              | $      | 628,035      | $      | 2,946,998         |
|   |                                            |   |       |   |           |   |                                 |   |         |   |              |
|   | Net                    income                   |   |       |   |           |   |                                 |   | 38,850       |   | 38,850            |
|   | Other                    comprehensive income   |   |       |   |           |   | 4,579                                |   |         |   | 4,579             |
|   |                                            |   |       |   |           |   |                                 |   |         |   |              |
|   | Balance                    at June 30, 2005     | $      | 6,437      | $      | 2,131,888      | $      | 185,217                              | $      | 666,885      | $      | 2,990,427         |
|   |                                            |   |       |   |           |   |                                 |   |         |   |              |
|   |                                            |   |       |   |           |   |                                 |   |         |   |              |
|   |                                            |   |       |   |           |   |                                 |   |         |   |              |
|   | Balance                    at December 31, 2005 | $      | 6,437      | $      | 2,138,880      | $      | 19,260                               | $      | 561,187      | $      | 2,725,764         |
|   |                                            |   |       |   |           |   |                                 |   |         |   |              |
|   | Net                    income                   |   |       |   |           |   |                                 |   | 136,629      |   | 136,629           |
|   | Dividends                                       |   |       |   |           |   |                                 |   | (100,000)    |   | (100,000)         |
|   | Additional                    paid-in-capital   |   |       |   | 3,052          |   |                                 |   |         |   | 3,052             |
|   | Other                    comprehensive loss     |   |       |   |           |   | (153,144)                            |   |         |   | (153,144)         |
|   |                                            |   |       |   |           |   |                                 |   |         |   |              |
|   | Balance                    at June 30, 2006     | $      | 6,437      | $      | 2,141,932      | $      | (133,884)                            | $      | 597,816      | $      | 2,612,301         |

*The          accompanying notes are an integral part of the condensed consolidated financial          statements.*

----

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

**(A          Wholly-Owned Subsidiary of Sun Life of Canada (U.S.) Holdings,          Inc.)**

**CONDENSED          CONSOLIDATED STATEMENTS OF CASH FLOWS**

|                                                                                     |                                                                           |        | **Unaudited**                     |
|------------------------------------------------------------------------------------------|--------------------------------------------------------------------------------|-------------|-----------------------------------|
|                                                                                     |                                                                           |        |  **2006**                    |   |  **2005** |
|                                                                                     |                                                                           |        |                              |   |   |
| **Cash                    Flows From Operating Activities:**                             |                                                                           |        |                              |
| Net                    income from operations                                            | $                     136,629                                             |        | $                    38,850  |
| Adjustments                    to reconcile net income to net cash (used in) provided by |                                                                           |        |                              |
|                                                                                     | operating                    activities:                                       |        |                              |   |
|                                                                                     | Minority                    interest share                                     | -           |                              | (1,214) |
|                                                                                     | Amortization                    of discount and premiums                       | 33,682      |                              | 26,602 |
|                                                                                     | Amortization                    of DAC and VOBA                                | 190,212     |                              | 98,828 |
|                                                                                     | Depreciation                    and amortization                               | 2,411       |                              | 1,961 |
|                                                                                     | Non                    cash derivative activity                                | (237,874)   |                              | 82,624 |
|                                                                                     | Net                    realized losses (gains) on investments                  | 22,442      |                              | (22,532) |
|                                                                                     | Net                    unrealized losses on trading investments                | 50,466      |                              | 26,014 |
|                                                                                     | Net                    change in unrealized and undistributed gains in private |        |                              |   |
|                                                                                     | equity                    limited partnerships                                 | (17,882)    |                              | (21,053) |
|                                                                                     | Interest                    credited to contractholder deposits                | 302,263     |                              | 319,832 |
| Changes                    in assets and liabilities:                                    |                                                                           |        |                              |
|                                                                                     | Deferred                    federal income taxes                               | 86,084      |                              | 1,895 |
|                                                                                     | Deferred                    acquisition costs                                  | (124,117)   |                              | (140,078) |
|                                                                                     | Accrued                    investment income                                   | (14,855)    |                              | (14,459) |
|                                                                                     | Future                    contract and policy benefits                         | (6,624)     |                              | (15,806) |
|                                                                                     | Other,                    net                                                  | (35,607)    |                              | 88,485 |
|                                                                                     | Net                    purchases of trading fixed maturities                   | (936,339)   |                              | (335,595) |
|                                                                                     |                                                                           |        |                              |   |   |
| Net                    cash (used in) provided by operating activities                   | (549,109)                                                                      |        | 134,354                           |
|                                                                                     |                                                                           |        |                              |   |   |
| **Cash                    Flows From Investing Activities:**                             |                                                                           |        |                              |
| Sales,                    maturities and repayments of:                                  |                                                                           |        |                              |
|                                                                                     | Available-for-sale                    fixed maturities                         | 3,041,711   |                              | 3,124,439 |
|                                                                                     | Mortgage                    loans                                              | 113,811     |                              | 55,403 |
|                                                                                     | Other                    invested assets                                       | 59,231      |                              | 395,691 |
|                                                                                     | Net                    cash in disposition of subsidiary                       | -           |                              | 17,040 |
| Purchases                    of:                                                         |                                                                           |        |                              |
|                                                                                     | Available-for-sale                    fixed maturities                         | (2,078,597) |                              | (3,220,787) |
|                                                                                     | Mortgage                    loans                                              | (359,197)   |                              | (124,624) |
|                                                                                     | Real                    estate                                                 | (655)       |                              | (3,479) |
|                                                                                     | Other                    invested assets                                       | (568,908)   |                              | (152,332) |
| Change                    in other investing activities, net                             | 536,620                                                                        |        | (211,113)                         |
| Net                    change in policy loans                                            | 2,117                                                                          |        | (6,174)                           |
| Net                    change in short term investments                                  | -                                                                              |        | (4,543)                           |
|                                                                                     |                                                                           |        |                              |   |   |
| Net                    cash provided by (used in) investing activities                   | $                    746,133                                                   |        | $                    (130,479)    |

*Continued          on next page*

*The          accompanying notes are an integral part of the condensed consolidated financial          statements.*

----

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

**(A          Wholly-Owned Subsidiary of Sun Life of Canada (U.S.) Holdings,          Inc.)**

**CONDENSED          CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)**

|                                                                   | **Unaudited**                                                     |
|------------------------------------------------------------------------|-------------------------------------------------------------------|
|                                                                   |  **2006**                                                    |   |  **2005** |
|                                                                   |                                                              |   |   |
| **Cash                    Flows From Financing Activities:**           |                                                              |   |   |
|                                                                   | Deposits                    to contractholder deposit funds       | $                      1,658,030 |   | $                      1,569,515 |
|                                                                   | Withdrawals                    from contractholder deposit funds  | (1,880,882) |   | (1,634,241) |
|                                                                   | Debt                    proceeds                                  | 100,000 |   | 100,000 |
|                                                                   | Dividends                                                         | (100,000) |   | - |
|                                                                   | Other,                    net                                     | 3,052 |   | 1,558 |
|                                                                   |                                                              |   |   |   |   |
| Net                    cash (used in) provided by financing activities | (219,800)                                                         |   | 36,832 |
|                                                                   |                                                              |   |   |   |   |
| Net                    change in cash and cash equivalents             | (22,776)                                                          |   | 40,707 |
|                                                                   |                                                              |   |   |   |   |
|                                                                   | Cash                    and cash equivalents, beginning of period | 347,654 |   | 552,949 |
|                                                                   |                                                              |   |   |   |   |
|                                                                   | Cash                    and cash equivalents, end of period       | $                    324,878 |   | $                    593,656 |

**Supplemental          Schedule of non-cash investing and financing activities**

*The          accompanying notes are an integral part of the condensed consolidated financial          statements.*

----

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

**(A          Wholly-Owned Subsidiary of Sun Life of Canada (U.S.) Holdings,          Inc.)**

**NOTES          TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL          STATEMENTS**

**1.          DESCRIPTION OF BUSINESS **

**GENERAL**

**BASIS          OF PRESENTATION**

----

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

**(A          Wholly-Owned Subsidiary of Sun Life of Canada (U.S.) Holdings,          Inc.)**

**NOTES          TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS          (continued)**

**BASIS          OF PRESENTATION (continued)**

**USE          OF ESTIMATES**

**NEW          ACCOUNTING PRONOUNCEMENTS**

----

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

**(A          Wholly-Owned Subsidiary of Sun Life of Canada (U.S.) Holdings,          Inc.)**

**NOTES          TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS          (continued)**

**2.**
**TRANSACTIONS          WITH AFFILIATES **

----

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

**(A          Wholly-Owned Subsidiary of Sun Life of Canada (U.S.) Holdings,          Inc.)**

**NOTES          TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS          (continued)**

**2.**
**TRANSACTIONS          WITH AFFILIATES (continued)**

----

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

**(A          Wholly-Owned Subsidiary of Sun Life of Canada (U.S.) Holdings,          Inc.)**

**NOTES          TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS          (continued)**

**2.**
**TRANSACTIONS          WITH AFFILIATES (continued)**

----

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

**(A          Wholly-Owned Subsidiary of Sun Life of Canada (U.S.) Holdings,          Inc.)**

**NOTES          TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS          (continued)**

**2.**
**TRANSACTIONS          WITH AFFILIATES (continued)**

**3.          SEGMENT INFORMATION**

**Wealth          Management**

----

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

**(A          Wholly-Owned Subsidiary of Sun Life of Canada (U.S.) Holdings,          Inc.)**

**NOTES          TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS          (continued)**

**3.          SEGMENT INFORMATION (continued)**

**Individual          Protection**

**Group          Protection**

**Corporate**

|                                                                                                           | **Six-month                    period ended June 30, 2006** |   |           |
|----------------------------------------------------------------------------------------------------------------|-------------------------------------------------------------|--------|----------------|
|                                                                                                           |                                                        |   |           |   |   |   |   |   |   |
|                                                                                                           | **Wealth**                                                  |   | **Individual** |   | **Group** |   |   |   |   |
|                                                                                                           | **Management**                                              |   | **Protection** |   | **Protection** |   | **Corporate** |   | **Totals** |
|                                                                                                           |                                                        |   |           |   |   |   |   |   |   |
| Total                    Revenues                                                                              | $                    825,927                                | $      | 43,297         | $ | 19,424 | $ | 50,080 | $ | 938,728 |
| Total                  Expenditures                                                                            | 643,597                                                     |   | 42,794         |   | 18,526 |   | 35,783 |   | 740,700 |
| Income                    beforeincome                    tax expense and                    minority interest | 182,330                                                     |   | 503            |   | 898 |   | 14,297 |   | 198,028 |
|                                                                                                           |                                                        |   |           |   |   |   |   |   |   |
| Net                    income                                                                                  | $                    124,020                                | $      | 397            | $ | 584 | $ | 11,628 | $ | 136,629 |

|                                                                                                                   | **Six-month                    period ended June 30, 2005** |   |   |
|------------------------------------------------------------------------------------------------------------------------|-------------------------------------------------------------|--------|--------|
|                                                                                                                   |                                                        |   |   |   |   |   |   |   |   |
| Total                    Revenues                                                                                      | $                    563,634                                | $      | 39,732 | $ | 17,186 | $ | 67,348 | $ | 687,900 |
| Total                    Expenditures                                                                                  | 555,451                                                     |   | 36,612 |   | 18,249 |   | 32,715 |   | 643,027 |
| Income                    (loss) before income                    tax expense and                    minority interest | 8,183                                                       |   | 3,120  |   | (1,063) |   | 34,633 |   | 44,873 |
|                                                                                                                   |                                                        |   |   |   |   |   |   |   |   |
| Net                    income (loss)                                                                                   | $                    10,871                                 | $      | 2,098  | $ | (691) | $ | 26,572 | $ | 38,850 |

----

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

**(A          Wholly-Owned Subsidiary of Sun Life of Canada (U.S.) Holdings,          Inc.)**

**NOTES          TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS          (continued)**

**3.            SEGMENT INFORMATION (continued)**

|                                                                                        | **Three-month                      period ended June 30, 2006** |   |           |
|---------------------------------------------------------------------------------------------|-----------------------------------------------------------------|--------|----------------|
|                                                                                        |                                                            |   |           |   |   |   |   |   |   |
|                                                                                        | **Wealth**                                                      |   | **Individual** |   | **Group** |   |   |   |   |
|                                                                                        | **Management**                                                  |   | **Protection** |   | **Protection** |   | **Corporate** |   | **Totals** |
|                                                                                        |                                                            |   |           |   |   |   |   |   |   |
| Total                      Revenues                                                         | $                      398,891                                  | $      | 23,119         | $ | 9,779 | $ | 32,323 | $ | 464,112 |
| Total                      Expenditures                                                     | 307,868                                                         |   | 24,581         |   | 8,557 |   | 17,065 |   | 358,071 |
| Income                      (loss) before income                      tax expense (benefit) | 91,023                                                          |   | (1,462)        |   | 1,222 |   | 15,258 |   | 106,041 |
|                                                                                        |                                                            |   |           |   |   |   |   |   |   |
| Net                      income (loss)                                                      | $                      61,821                                   | $      | (880)          | $ | 794 | $ | 11,233 | $ | 72,968 |

|                                                                                        | **Three-month                      period ended June 30, 2005** |   |    |
|---------------------------------------------------------------------------------------------|-----------------------------------------------------------------|--------|---------|
|                                                                                        |                                                            |   |    |   |   |   |   |   |   |
| Total                      Revenues                                                         | $                      236,064                                  | $      | 18,185  | $ | 8,495 | $ | 21,691 | $ | 284,435 |
| Total                      Expenditures                                                     | 269,536                                                         |   | 19,242  |   | 9,616 |   | (3,938) |   | 294,456 |
| Income                      (loss) before income                      tax expense (benefit) | (33,472)                                                        |   | (1,057) |   | (1,121) |   | 25,629 |   | (10,021) |
|                                                                                        |                                                            |   |    |   |   |   |   |   |   |
| Net                      (loss) income                                                      | $                      (18,915)                                 | $      | (653)   | $ | (729) | $ | 24,097 | $ | 3,800 |

| **Six-month                    period ended June 30, 2006**                                                                               |
|-------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                      |
|                                                                                                                                      | **Wealth** |   | **Individual** |   | **Group** |   |   |   |   |
|                                                                                                                                      | **Management** |   | **Protection** |   | **Protection** |   | **Corporate** |   | **Totals** |
| Income                    (loss) before                    income tax                    expense and minority                    interest | $ | 20,051 |   | $ | 2,213 |   | $ | 363 |   | $ | (22,627) |   | $ | - |
|                                                                                                                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **Six-month                    period ended June 30, 2005**                                                                               |
|                                                                                                                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Income                    (loss)before                    income tax                    expense and minority                    interest  | $ | 17,646 |   | $ | 689 |   | $ | 171 |   | $ | (18,506) |   | $ | - |

----

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

**(A          Wholly-Owned Subsidiary of Sun Life of Canada (U.S.) Holdings,          Inc.)**

**NOTES          TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS          (continued)**

**3.          SEGMENT INFORMATION (continued)**

| **Three-month                    period ended June 30, 2006**                                    |
|--------------------------------------------------------------------------------------------------|
|                                                                                             |
|                                                                                             | **Wealth** |   | **Individual** |   | **Group** |   |   |   |   |
|                                                                                             | **Management** |   | **Protection** |   | **Protection** |   | **Corporate** |   | **Totals** |
| Income                    (loss) before                    income tax                    expense | $ | 10,037 |   | $ | 1,333 |   | $ | 188 |   | $ | (11,558) |   | $ | - |
|                                                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **Three-month                    period ended June 30, 2005**                                    |
|                                                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Income                    (loss) before                    income tax                    expense | $ | 9,114 |   | $ | 350 |   | $ | 90 |   | $ | (9,554) |   | $ | - |

**4.          REINSURANCE**

----

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

**(A          Wholly-Owned Subsidiary of Sun Life of Canada (U.S.) Holdings,          Inc.)**

**NOTES          TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS          (continued)**

**5.**
**COMMITMENTS          AND CONTINGENT LIABILITIES**

**Regulation          and Regulatory Developments**

**Litigation,          Income Taxes and Other Matters**

**Indemnities**

----

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

**(A          Wholly-Owned Subsidiary of Sun Life of Canada (U.S.) Holdings,          Inc.)**

**NOTES          TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS          (continued)**

**6.          RETIREMENT PLANS**

|                                                                                  |                           | **2006**                                                                                 | **2005**                                 |
|---------------------------------------------------------------------------------------|--------------------------------|------------------------------------------------------------------------------------------|------------------------------------------|
|                                                                                  |                           | **Pension                      Benefits**                                                | **Other                      Benefits**  | **Pension                      Benefits** | **Other                      Benefits** |
|                                                                                  |                           |                                                                                     |                                     |   |   |
| Components                      of net periodic benefit cost:                         |                           |                                                                                     |                                     |   |
| Service                      cost                                                     | $                      2,796   | $                      656                                                               | $                        5,474 | $                                667 |
| Interest                      cost                                                    | 6,720                          | 1,484                                                                                    | 6,920                                    | 1,497 |
| Expected                      return on plan assets                                   | (10,836)                       | -                                                                                        | (10,046)                                 | - |
| Amortization                      of transition obligation asset                      | (1,046)                        | -                                                                                        | (1,525)                                  | - |
| Amortization                      of prior service cost                               | 138                            | (264)                                                                                    | 428                                      | (120) |
| Recognized                      net actuarial loss                                    | 82                             | 726                                                                                      | 959                                      | 636 |
| Net                      periodic benefit (benefit) cost                              | $                      (2,146) | $                                2,602 | $                      2,210             | $                                2,680 |
| The                      Company’s share of net periodic benefit (benefit) cost | $                      (2,146) | $                       2,243                                                       | $                      2,193             | $                         2,304 |

|                                                                                  |                           | **2006**                                  | **2005**                                |
|---------------------------------------------------------------------------------------|--------------------------------|-------------------------------------------|-----------------------------------------|
|                                                                                  |                           | **Pension                      Benefits** | **Other                      Benefits** | **Pension                      Benefits** | **Other                      Benefits** |
|                                                                                  |                           |                                      |                                    |   |   |
| Components                      of net periodic benefit cost:                         |                           |                                      |                                    |   |
| Service                      cost                                                     | $                      1,398   | $                      328                | $                      2,737            | $                      333 |
| Interest                      cost                                                    | 3,360                          | 742                                       | 3,460                                   | 748 |
| Expected                      return on plan assets                                   | (5,418)                        | -                                         | (5,023)                                 | - |
| Amortization                      of transition obligation asset                      | (523)                          | -                                         | (763)                                   | - |
| Amortization                      of prior service cost                               | 69                             | (132)                                     | 214                                     | (60) |
| Recognized                      net actuarial loss                                    | 41                             | 363                                       | 479                                     | 318 |
| Net                      periodic benefit (benefit) cost                              | $                      (1,073) | $                      1,301              | $                      1,104            | $                      1,339 |
| The                      Company’s share of net periodic benefit (benefit) cost | $                      (1,073) | $                      1,126              | $                      1,096            | $                      1,152 |

----

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

**(A          Wholly-Owned Subsidiary of Sun Life of Canada (U.S.) Holdings,          Inc.)**

**NOTES          TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS          (continued)**

**6.          RETIREMENT PLANS (continued)**

**7.          SALE OF VARIABLE INTEREST ENTITY**

**8.          GOODWILL**

**9.          LIABILITIES FOR CONTRACT GUARANTEES**

| **Benefit                    Type**                   |   | **Account                    Balance** | **Net                    Amount at Risk****1** | **Average                    Attained Age** |
|-------------------------------------------------------|--------|----------------------------------------|------------------------------------------------|---------------------------------------------|
| Minimum                    Death                      |   | $                    15,908,005        | $                    2,051,959                 | 66.8                                        |
| Minimum                    Income                     |   | $                    384,509           | $                    70,982                    | 59.7                                        |
| Minimum                    Accumulation or Withdrawal |   |  $                    2,197,848   |  $                    3,106               |  62.1                                  |

*Net          amount at risk represents the difference between the guaranteed benefits          and the          account balance.*

----

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

**(A          Wholly-Owned Subsidiary of Sun Life of Canada (U.S.) Holdings,          Inc.)**

**NOTES          TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS          (continued)**

**9.          LIABILITIES FOR CONTRACT GUARANTEES (continued)**

|                                                                            | **Guaranteed****Minimum****Death                    Benefit** |   | **Guaranteed****Minimum****Income                    Benefit** |   | **Total**                   |
|---------------------------------------------------------------------------------|---------------------------------------------------------------|--------|----------------------------------------------------------------|--------|-----------------------------|
| Balance                    at January 1, 2006                                   | $                    41,749                                   |   | $                    3,000                                     |   | $                    44,749 |
|                                                                            |                                                          |   |                                                           |   |                        |
| Benefit                    Ratio Change / Assumption                    Changes |  (5,133)                                                 |   |  (355)                                                    |   |  (5,488)               |
| Incurred                    guaranteed benefits                                 | 18,228                                                        |   | 302                                                            |   | 18,530                      |
| Paid                    guaranteed benefits                                     | (16,649)                                                      | 0      | -                                                              |   | (16,649)                    |
| Interest                                                                        | 678                                                           |   | 53                                                             |   | 731                         |
|                                                                            |                                                          |   |                                                           |   |                        |
| Balance                    at June 30, 2006                                     | $                    38,873                                   |   | $                    3,000                                     |   | $                    41,873 |

|                                            | **Guaranteed****Minimum****Death                    Benefit** |   | **Guaranteed****Minimum****Income                    Benefit** |   | **Total**                   |
|-------------------------------------------------|---------------------------------------------------------------|--------|----------------------------------------------------------------|--------|-----------------------------|
| Balance                    at January 1, 2005   | $                    28,313                                   |   | $                    2,421                                     |   | $                    30,734 |
|                                            |                                                          |   |                                                           |   |                        |
| Incurred                    guaranteed benefits | 18,653                                                        |   | 472                                                            |   | 19,125                      |
| Paid                    guaranteed benefits     | (20,267)                                                      |   | -                                                              |   | (20,267)                    |
| Interest                                        | 396                                                           |   | 43                                                             |   | 439                         |
|                                            |                                                          |   |                                                           |   |                        |
| Balance                    at June 30, 2005     | $                     27,095                             |   | $                    2,936                                |   | $                    30,031 |

----

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

**(A          Wholly-Owned Subsidiary of Sun Life of Canada (U.S.) Holdings,          Inc.)**

**NOTES          TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS          (continued)**

**9.          LIABILITIES FOR CONTRACT GUARANTEES (continued)**

**10.          SUBSEQUENT EVENT**

----

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

**Item          2. Management’s Discussion and Analysis of Financial Condition and          Results of Operations.**

***CAUTIONARY          STATEMENT***

| l      | Heightened                    competition, particularly in terms of price, product features                    and                    distribution capability, which could constrain the Company’s growth and                    profitability. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                  |
| l      | Changes                    in interest rates and market conditions.                                                                                                                                                                                   |
|   |                                                                                                                                                                                                                                                  |
| l      | Regulatory                    and legislative developments.                                                                                                                                                                                           |
|   |                                                                                                                                                                                                                                                  |
| l      | Developments                    in consumer preferences and behavior                    patterns.                                                                                                                                                     |

**CRITICAL          ACCOUNTING POLICIES**

***Goodwill***

***Deferred          Acquisition Costs***

----

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

**CRITICAL          ACCOUNTING POLICIES (continued)**

**Deferred**
***Acquisition Costs (continued)***

***Value          of Business Acquired***

**RESULTS          OF OPERATIONS**

***Six-month          period ended June 30, 2006 compared to the six-month period ended June          30,          2005:***

**Net          Income**

**REVENUES**

***Premium          and annuity considerations***

----

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

**RESULT          OF OPERATIONS (Continued)**

**REVENUES          (continued)**

***Net          Investment incom***
**e**

***Net          Derivative income (loss)***

|                                                                                                                | **Six-month                    periods ended June 30,** |
|---------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------|
|                                                                                                                | **2006**                                                | **2005** |
| Net                    expense on swap agreements                                                                   | $                    (11,277)                           | $                    (36,576) |
| Change                    in fair value of swap agreements (interest                    rate, currency, and equity) |  231,883                                           |  (61,762) |
| Change                    in fair value of options, futures and embedded                    derivatives             |  5,428                                             |  (22,601) |
|                                                                                                                |                                                    |   |
| Total                    derivative income (loss)                                                                   | $                    226,034                            | $                    (120,939) |

----

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

**RESULT          OF OPERATIONS (Continued)**

**REVENUES          (continued)**

***Net          Realized investment (losses) gains***
** **

***Fees          and other income***

**BENEFITS          AND EXPENSES**

***Interest          credited***

***Interest          expense***

***Policyholder          benefits***

***Other          operating expenses -***

----

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

**RESULT          OF OPERATIONS (Continued)**

**BENEFITS          AND EXPENSES (continued)**

***Amortization          of DAC -***

***Amortization          of VOBA***

**Results          of Operations by Segment**

***Wealth          Management Segment***

***Fixed          Annuities***
*          -*

***Variable          Annuities***
*          -*

***Fixed          Indexed Annuities***
*          -*

----

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

***Wealth          Management Segment (continued)***

***Institutional          Investment Contracts***
*          - *

***Other***
**-**

----

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

***Wealth          Management Segment (continued)***

|                                      | **2006**                     |   | **2005** |
|-------------------------------------------|------------------------------|--------|----------|
|                                      |                         |   |     |
| **Total                    Revenues**     | $                    825,927 | $      | 563,634  |
| **Total                    Expenditures** | 643,597                      |   | 555,451  |
| **Pretax                    Income**      | 182,330                      |   | 8,183    |
|                                      |                         |   |     |
| **Net                    Income**         | $                    124,020 | $      | 10,871   |

**REVENUES**

***Net          Investment incom***
**e**

----

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

***Wealth          Management Segment (continued)***

***Net          Derivative income (loss)***
*** ***

|                                                                                                                | **Six-month                    periods ended June 30,** |
|---------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------|
|                                                                                                                | **2006**                                                | **2005** |
| Net                    expense on swap agreements                                                                   | $                    (10,523)                           | $                    (38,861) |
| Change                    in fair value of swap agreements (interest                    rate, currency, and equity) |  228,447                                           |  (55,678) |
| Change                    in fair value of options, futures and embedded                    derivatives             |  5,428                                             |  (22,601) |
|                                                                                                                |                                                    |   |
| Total                    derivative income (loss)                                                                   | $                    223,352                            | $                    (117,140) |

***Net          Realized investment (losses) gains***
** **

***Fees          and other income***

**BENEFITS          AND EXPENSES**

***Interest          credited -***

----

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

***Wealth          Management Segment (continued)***

***Interest          expense***

***Policyholder          benefits***

***Other          operating expenses -***

***Amortization          of DAC***

***Amortization          of VOBA***

***Individual          Protection Segment***

|                                      | **2006**                    |   | **2005** |
|-------------------------------------------|-----------------------------|--------|----------|
|                                      |                        |   |     |
| **Total                    Revenues**     | $                    43,297 | $      | 39,732   |
| **Total                    Expenditures** | 42,794                      |   | 36,612   |
| **Pretax                    Income**      | 503                         |   | 3,120    |
|                                      |                        |   |     |
| **Net                    Income**         | $                    397    | $      | 2,098    |

----

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

***Individual          Protection Segment (continued)***

***Group          Protection Segment***

|                                        | **2006**                    |   | **2005** |
|---------------------------------------------|-----------------------------|--------|----------|
|                                        |                        |   |     |
| **Total                    Revenues**       | $                    19,424 | $      | 17,186   |
| **Total                    Expenditures**   | 18,526                      |   | 18,249   |
| **Pretax                    Income (Loss)** | 898                         |   | (1,063)  |
|                                        |                        |   |     |
| **Net                    Income (Loss)**    | $                    584    | $      | (691)    |

----

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

***Corporate          Segment***

|                                      | **2006**                    |   | **2005** |
|-------------------------------------------|-----------------------------|--------|----------|
|                                      |                        |   |     |
| **Total                    Revenues**     | $                    50,080 | $      | 67,348   |
| **Total                    Expenditures** | 35,783                      |   | 32,715   |
| **Pretax                    Income**      | 14,297                      |   | 34,633   |
|                                      |                        |   |     |
| **Net                    Income**         | $                    11,628 | $      | 26,572   |

----

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

**Item          3. Quantitative and Qualitative Disclosures About Market          Risk.**

**Item          4. Controls and Procedures.**

**PART          II - OTHER INFORMATION**

**Item          1. Legal Proceedings**

**Item          1A. Risk Factors.**

**Item          2. Unregistered Sales of Equity Securities and Use of          Proceeds.**

**Item          3. Defaults Upon Senior Securities.**

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

**Item          5. Other Information.**

----

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

**Item          6. Exhibits.**

| Exhibit                    No. | Description |
|--------------------------------|-------------|

| 31.1   | Certification                    pursuant to Rule 13a-14(a) and 15d-14(a), as adopted pursuant                    to Section                    302 of the Sarbanes-Oxley Act of 2002 |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                  |
| 31.2   | Certification                    pursuant to Rule 13a-14(a) and 15d-14(a), as adopted pursuant                    to Section                    302 of the Sarbanes-Oxley Act of 2002 |
|   |                                                                                                                                                                                  |
| 32.1   | Certification                    pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section                    906 of                    the Sarbanes-Oxley Act of 2002       |
|   |                                                                                                                                                                                  |
| 32.2   | Certification                    Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section                    906 of                    the Sarbanes-Oxley Act of 2002       |

----

**SIGNATURES**

|   | Sun                    Life Assurance Company of Canada (U.S.)(Registrant) |
|--------|----------------------------------------------------------------------------|

| August                    11, 2006 | */s/                    Robert C. Salipante*      |
|------------------------------------|---------------------------------------------------|
| Date                               | Robert                    C. Salipante, President |

| August                    11, 2006 | */s/                    Gary Corsi*                                                          |
|------------------------------------|----------------------------------------------------------------------------------------------|
| Date                               | Gary                    Corsi, Vice President and Chief Financial                    Officer |