As filed with the Securities and Exchange Commission on October 15, 1999
Registration No. 811-09623
-----------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM N-4
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Pre-effective Amendment No. [ ]
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
Amendment No. [ ]
(Check appropriate box or boxes)
GLENBROOK LIFE DISCOVER VARIABLE ACCOUNT (A)
(Exact Name of Registrant)
GLENBROOK LIFE AND ANNUITY COMPANY
(Name of Depositor)
3100 Sanders Road
Northbrook, IL 60062
(Address of Depositor's Principal Executive Offices) (Zip Code)
847/402-5000
(Depositor's Telephone Number, Including Area Code)
Michael J. Velotta, Esq.
Glenbrook Life and Annuity Company
3100 Sanders Road
Northbrook, Illinois 60062
(Name and Address for Agent For Service
Copies of all communications to:
Porter Wright Morris & Arthur, LLP
1667 K Street, NW, Suite 1100
Washington, DC 20006-1605
Attn: Patrice M. Pitts, Esq.
The Registrant hereby amends this registration statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall
file a further amendment which specifically states that this registration
statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the registration statement shall become
effective on such date as the Commission, acting pursuant to said Section
8(a), may determine.
<PAGE>
DISCOVER VARIABLE ANNUITY
PROSPECTUS
INDIVIDUAL AND GROUP FLEXIBLE PREMIUM DEFERRED VARIABLE ANNUITY CONTRACTS
offered by
GLENBROOK LIFE AND ANNUITY COMPANY
through
GLENBROOK LIFE DISCOVER VARIABLE ACCOUNT (A)
This prospectus describes the Discover Variable Annuity Contract
("Contract"). The Contract has 20 Investment Alternatives: one standard Fixed
Account Option which pays a guaranteed minimum rate of interest; and 19
Subaccounts of the Glenbrook Life Discover Variable Account (A) ("Variable
Account"). Purchase payments are allocated to the Investment Alternatives
according to your instructions. Purchase payments allocated to each Subaccount
of the Variable Account will be invested exclusively in one of the following
portfolios ("Funds"):
MSU FUND
Value
Equity Growth
Mid Cap Value
Mid Cap Growth
U.S. Real Estate
International Magnum
Emerging Markets Equity
Global Equity
Fixed Income
High Yield
VAN KAMPEN FUNDS
LIT Comstock
LIT Emerging Growth
JANUS FUNDS
Aspen Capital Appreciation
STRONG FUNDS
VIF Growth Fund II
Opportunity Fund II
WARBURG PINCUS FUNDS
Small Company
Post Venture Capital
SCUDDER VARIABLE LIFE INVESTMENT FUND
International Portfolio
VLIF Bond Portfolio
<PAGE>
VARIABLE ANNUITY CONTRACTS INVOLVE CERTAIN RISKS, INCLUDING POSSIBLE
LOSS OF PRINCIPAL.
* The investment performance of the portfolios in which the
Subaccounts invest will vary.
* We do not guarantee how any of the portfolios will perform.
* The Contract is not a deposit or obligation of any bank, and no
bank endorses or guarantees the Contract.
* Neither the U.S. Government nor any federal agency insures your
investment in the Contract.
Please read this prospectus carefully before investing, and keep it for
future reference. It contains important information about the Discover
Variable Annuity Contract.
In certain states, the Contract may be offered as a group contract with
individual ownership represented by Certificates. Unless the content specifies
otherwise, the discussion of Contracts in this prospectus also applies to
Certificates under group contracts.
THE SEC HAS NOT APPROVED OR DISAPPROVED THESE SECURITIES, OR PASSED UPON
THE ADEQUACY OF THE PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
The Contract is designed to aid you in long-term financial planning. It
is available to individuals, as well as to certain group and individual
retirement plans. You also may purchase the Contract for use as an Individual
Retirement Annuity or to fund an Individual Retirement Account ("IRA") that
qualifies for special federal income tax treatment.
To learn more about the Contract, you may want to read the Statement of
Additional Information ("SAI"), dated , 1999. For a free copy of the SAI,
contact us at:
Glenbrook Life and Annuity Company
Customer Service Center
8301 Maryland Avenue
St. Louis, Missouri 63105
1-877-839-4214
We have filed the SAI with the SEC and have incorporated it by reference
into this prospectus. The table of contents for the SAI appears at the end of
this prospectus.
The SEC maintains an Internet website (http://www.sec.gov) that contains
the SAI, material incorporated by reference, and other information. You also
may read and copy any of these documents at the SEC's public reference room in
Washington, D.C. Please call 1-800-SEC-0330 for further information on the
operation of the public reference room.
THIS PROSPECTUS IS VALID ONLY WHEN ACCOMPANIED BY PROSPECTUSES FOR THE
FUNDS.
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
<S> <C>
IMPORTANT TERMS................................................................. 1
FEE TABLE....................................................................... 3
ANNUAL EXPENSES OF THE FUNDS FOR THE YEAR ENDED 1999.......................... 3
EXAMPLES...................................................................... 4
HIGHLIGHTS...................................................................... 5
THE CONTRACT.................................................................. 5
RIGHT TO CANCEL............................................................... 6
HOW TO INVEST................................................................. 6
INVESTMENT ALTERNATIVES....................................................... 6
TRANSFERS AMONG INVESTMENT ALTERNATIVES....................................... 7
FEES AND EXPENSES............................................................. 7
ACCESS TO YOUR MONEY.......................................................... 7
DEATH BENEFIT................................................................. 8
ANNUITY PAYMENTS.............................................................. 8
INQUIRIES..................................................................... 8
CONDENSED FINANCIAL INFORMATION................................................. 8
GLENBROOK LIFE AND ANNUITY COMPANY.............................................. 8
THE VARIABLE ACCOUNT............................................................ 9
THE FUNDS.......................................................................10
MSUF VALUE....................................................................10
MSUF EQUITY GROWTH...........................................................10
MSUF MID CAP VALUE............................................................10
MSUF MID CAP GROWTH...........................................................10
MSUF U.S. REAL ESTATE.........................................................10
MSUF INTERNATIONAL MAGNUM.....................................................10
MSUF EMERGING MARKETS EQUITY..................................................10
MSUF GLOBAL EQUITY............................................................10
MSUF FIXED INCOME.............................................................10
MSUF HIGH YIELD...............................................................10
VAN KAMPEN LIT COMSTOCK.......................................................10
VAN KAMPEN LIT EMERGING GROWTH................................................10
JANUS ASPEN CAPITAL APPRECIATION..............................................10
STRONG VIF GROWTH FUND II.....................................................10
STRONG OPPORTUNITY FUND II....................................................10
WARBURG PINCUS SMALL COMPANY..................................................10
WARBURG PINCUS POST VENTURE CAPITAL...........................................10
SCUDDER INTERNATIONAL.........................................................10
SCUDDER VLIF BOND.............................................................10
INVESTMENT ADVISORS.............................................................10
THE FIXED ACCOUNT OPTION........................................................10
FEES AND EXPENSES...............................................................11
CONTRACT OWNER TRANSACTION EXPENSES...........................................11
ANNUAL CONTRACT FEE...........................................................11
DEDUCTIONS FROM THE VARIABLE ACCOUNT..........................................12
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ADMINISTRATIVE EXPENSE CHARGE...............................................12
MORTALITY AND EXPENSE RISK CHARGE...........................................12
DEDUCTIONS FOR PREMIUM TAXES..................................................12
OTHER CHARGES AND DEDUCTIONS..................................................12
PURCHASING THE CONTRACT.........................................................12
RIGHT TO CANCEL...............................................................13
CREDITING YOUR FIRST PURCHASE PAYMENTS........................................13
ALLOCATING YOUR PURCHASE PAYMENTS.............................................13
ACCUMULATION UNITS............................................................14
ACCUMULATION UNIT VALUE.......................................................14
TRANSFERS.......................................................................14
TELEPHONE TRANSFERS...........................................................15
DOLLAR COST AVERAGING.........................................................15
AUTOMATIC PORTFOLIO REBALANCING...............................................16
ACCESS TO YOUR MONEY............................................................16
WITHDRAWALS...................................................................16
ANNUITY INCOME PAYMENTS.........................................................17
PAYOUT START DATE FOR ANNUITY PAYMENTS........................................17
VARIABLE INCOME PAYMENTS......................................................17
FIXED INCOME PAYMENTS.........................................................18
ANNUITY TRANSFERS.............................................................18
INCOME PLANS..................................................................18
INCOME PLAN 1 - LIFE INCOME WITH GUARANTEED PAYMENTS........................18
INCOME PLAN 2 - JOINT AND SURVIVOR LIFE INCOME WITH GUARANTEED PAYMENTS.....18
INCOME PLAN 3 - GUARANTEED NUMBER OF PAYMENTS...............................19
DEATH BENEFITS..................................................................19
DEATH BENEFIT PAYMENT PROVISIONS..............................................19
DEATH BENEFIT AMOUNT..........................................................20
FEDERAL TAX MATTERS.............................................................20
INTRODUCTION..................................................................20
TAXATION OF ANNUITIES.........................................................20
TAX DEFERRAL................................................................20
NONNATURAL OWNERS...........................................................21
DIVERSIFICATION REQUIREMENTS................................................21
OWNERSHIP TREATMENT.........................................................21
TAXATION OF PARTIAL AND FULL WITHDRAWALS....................................22
TAXATION OF ANNUITY PAYMENTS................................................22
TAXATION OF DEATH BENEFITS..................................................23
PENALTY TAX ON PREMATURE DISTRIBUTIONS......................................23
AGGREGATION OF ANNUITY CONTRACTS............................................23
TAX QUALIFIED CONTRACTS.....................................................23
RESTRICTIONS UNDER SECTION 403(B) PLANS.....................................24
INCOME TAX WITHHOLDING......................................................24
GENERAL MATTERS.................................................................24
OWNER.........................................................................24
BENEFICIARY...................................................................25
ASSIGNMENTS...................................................................25
DELAY OF PAYMENTS.............................................................25
MODIFICATION..................................................................25
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CUSTOMER INQUIRIES............................................................26
DISTRIBUTION OF THE CONTRACTS...................................................26
VOTING RIGHTS...................................................................26
GENERAL PROVISIONS..............................................................27
LEGAL PROCEEDINGS.............................................................27
FINANCIAL STATEMENTS..........................................................27
LEGAL MATTERS.................................................................27
YEAR 2000.....................................................................27
TABLE OF CONTENTS FOR STATEMENT OF ADDITIONAL INFORMATION.......................30
</TABLE>
iii
<PAGE>
IMPORTANT TERMS
For your convenience, we are providing a glossary of the terms we use in
this prospectus.
ACCUMULATION PHASE: The period that begins when we issue your Contract
and ends when you receive annuity income payments. During the Accumulation
Phase, earnings accumulate on a tax-deferred basis.
ACCUMULATION UNIT: The measurement we use to calculate the value of each
Subaccount at the end of each Valuation Period.
ACCUMULATION UNIT VALUE: The value of each Accumulation Unit that is
calculated on each Valuation Date. Each Subaccount has its own Accumulation
Unit Value. ANNUITANT: The person(s) you identify whose life (lives) we use to
determine the amount and duration of annuity income payments. You may name
joint annuitants at the time you select an Income Plan.
BENEFICIARY: The person(s) you select to receive the benefits of the
Contract if no Owner is living.
CONTRACT ANNIVERSARY: Each anniversary of the Issue Date.
CONTRACT VALUE: The total value of your Contract--the value you have
accumulated under the Contract in the Subaccounts of the Variable Account plus
your value in the Fixed Account Option.
CONTRACT YEAR: A period of 12 months that starts on the Issue Date of
your Contract or on any 12 month anniversary of that date.
FIXED ACCOUNT OPTION: The option to which you can direct your money
under the Contract that provides a guarantee of principal and minimum
interest. Fixed account assets are a portion of our general account assets.
FUND: Each of the separate investment portfolios of the underlying funds
in which a Subaccount of the Variable Account invests.
INCOME PERIOD: The period beginning on the Payout Start Date, during
which you will receive payments under the Income Plan you choose.
INCOME PLAN: The plan you choose under which we will pay periodic income
payments to you after the Payout Start Date, based on the money you accumulate
in the Contract. You may choose whether the dollar amount of the annuity
payments you receive will be fixed, or will vary with the investment results
of the Subaccounts in which you are invested at that time, or will be a
combination of fixed and variable payments.
<PAGE>
INVESTMENT ALTERNATIVES: The Subaccounts of the Variable Account and the
Fixed Account Option.
ISSUE DATE: The date we issue your Contract. We measure Contract Years
and Contract Anniversaries from the Issue Date.
PAYOUT START DATE: The date on which we begin to pay you annuity income
payments.
QUALIFIED CONTRACTS: Contracts issued under plans that qualify for
special federal income tax treatment under Sections 401(a), 403(a), 403(b),
408 and 408A of the Internal Revenue Code.
SUBACCOUNT: A subdivision of the Variable Account that invests
exclusively in shares of a single Fund. The investment performance of each
Subaccount is linked directly to the investment performance of the Fund in
which it invests.
VALUATION DATE: Each day on which we value the assets in the
Subaccounts. We are open for business on each day the New York Stock Exchange
("NYSE") is open for trading.
VALUATION PERIOD: The period between Valuation Dates that begins as of
the close of regular trading on the NYSE (usually 4:00 p.m. Eastern Time) on
one Valuation Date and ends as of the close of regular trading on the next
Valuation Date.
VARIABLE ACCOUNT: Glenbrook Life Discover Variable Account A, a separate
investment account composed of Subaccounts that we established to receive and
invest purchase payments paid under the Contract.
WE, US, OUR, GLENBROOK LIFE, THE COMPANY: Glenbrook Life and Annuity
Company.
YOU, YOUR, THE OWNER: The person having the privileges of ownership
stated in the Contract.
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<PAGE>
FEE TABLE
CONTRACT OWNER TRANSACTION EXPENSES
Sales Load Imposed on Purchases None
Deferred Sales Charge None
Surrender Fee None
Transfer Fee (1)
ANNUAL CONTRACT FEE None
VARIABLE ACCOUNT ANNUAL EXPENSES
(as a percentage of your average net assets in the Variable Account)
Mortality and Expense Risk Charge(2) 0.50%
Administrative Expense Charge 0.10%
-----
Total Variable Account Annual Expenses 0.60%
(1) We do not impose a transfer charge. We may in the future
assess a $10 charge after the 12th transfer in a Contract Year. We do
not count transfers resulting from dollar cost averaging and automatic
portfolio rebalancing as transfers.
(2) If you opt to receive annuity payments that vary in amount, we
will assess the mortality and expense risk charge during the payout
phase of the Contract.
ANNUAL EXPENSES OF THE FUNDS FOR THE YEAR ENDED 1999
(as a percentage of average net assets for the 1999 calendar year)
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Portfolio Management Fee Other Expenses Total Expenses
After Fee Waiver* After Fee Waiver*
---------------------------------------------------------------------------------------------------
MSUF Value
---------------------------------------------------------------------------------------------------
MSUF Equity Growth
---------------------------------------------------------------------------------------------------
MSUF Mid Cap Value
---------------------------------------------------------------------------------------------------
MSUF Mid Cap Growth
---------------------------------------------------------------------------------------------------
MSUF U.S. Real Estate
---------------------------------------------------------------------------------------------------
MSUF International
Magnum
---------------------------------------------------------------------------------------------------
MSUF Emerging
Markets Equity
---------------------------------------------------------------------------------------------------
MSUF Global Equity
---------------------------------------------------------------------------------------------------
MSUF Fixed Income
---------------------------------------------------------------------------------------------------
MSUF High Yield
---------------------------------------------------------------------------------------------------
Van Kampen LIT
Comstock
---------------------------------------------------------------------------------------------------
3
<PAGE>
---------------------------------------------------------------------------------------------------
Van Kampen LIT
Emerging Growth
---------------------------------------------------------------------------------------------------
Janus Aspen Capital
Appreciation
---------------------------------------------------------------------------------------------------
Strong VIF Growth
Fund II
---------------------------------------------------------------------------------------------------
Strong Opportunity
Fund II
---------------------------------------------------------------------------------------------------
Warburg Pincus Small
Company
---------------------------------------------------------------------------------------------------
Warburg Pincus Post
---------------------------------------------------------------------------------------------------
Venture Capital
---------------------------------------------------------------------------------------------------
Scudder International
---------------------------------------------------------------------------------------------------
Scudder VLIF Bond
---------------------------------------------------------------------------------------------------
</TABLE>
EXAMPLES(1)
The following examples illustrate the expenses you would pay on a $1,000
investment, assuming a 5% annual return, if you continued the Contract,
surrendered or annuitized at the end of each period.
FUND PORTFOLIO 1 YEAR 3 YEARS
MSUF Value
MSUF Equity Growth
MSUF Mid Cap Value
MSUF Mid Cap Growth
MSUF U.S. Real Estate
MSUF International Magnum
MSUF Emerging Markets Equity
MSUF Global Equity
MSUF Fixed Income
MSUF High Yield
Van Kampen LIT Comstock
Van Kampen LIT Emerging
Growth
Janus Aspen Capital
Appreciation
Strong VIF Growth Fund II
Strong Opportunity Fund II
Warburg Pincus Small
Company
4
<PAGE>
Warburg Pincus Post Venture
Capital
Scudder International
Scudder VLIF Bond
(1)Total Variable Account Annual Expenses of 0.60%
The Fee Table sets forth the various costs and expenses that you will
pay directly--that is, current expenses and fees under the Contract-- as well
as the costs and expenses that you will pay indirectly--that is, the fees and
expenses for each Fund for the 1999 calendar year. Each Fund has provided the
information on its expenses.
You should not consider the examples above to represent past or future
expenses, performance or return. The assumed 5% return is hypothetical. Actual
expenses and returns may be greater or less than those shown. Neither the fee
table nor the examples reflects the deduction of any premium taxes.
HIGHLIGHTS
These highlights provide only a brief overview of the more important
features of the Contract. More detailed information about the Contract appears
later in this Prospectus. Please read this Prospectus carefully.
THE CONTRACT
The Contract provides a way for you to invest on a tax-deferred basis in
a Fixed Account Option and in Subaccounts of the Variable Account.
"Tax-deferred" means that the earnings and appreciation on the money in your
Contract are not taxed until either you take money out by a full or partial
cash withdrawal or by annuitizing the Contract, or until we pay the death
benefit.
The Contract is designed for people seeking long-term tax-deferred
accumulation of assets, generally for retirement. The tax-deferral feature is
most attractive to people in high federal and state tax brackets. You should
not buy this Contract if you are looking for a short-term investment or if you
cannot take the risk of getting back less money than you put in.
Like all deferred annuity contracts, the Contract has two phases: the
"Accumulation Phase" and the "Income Period." During the Accumulation Phase,
you can allocate money to any combination of Investment Alternatives; any
earnings are tax-deferred. The Income Period begins once you start receiving
regular income payments from your Contract Value. The money you can accumulate
during the Accumulation Phase, as well as the annuity income option you
choose, will determine the dollar amount of any income payments you receive.
The Contract is a "variable" annuity because the value of your Contract
will go up or down depending on the investment performance of the Subaccounts
in which you invest. If you select a variable Income Plan, the amount of your
annuity payments in the variable plan will depend on the investment
5
<PAGE>
performance of the Subaccounts in which you invest. You bear the entire
investment risk for your investments in the Subaccounts.
You also may direct money to the Fixed Account Option. We guarantee
interest, as well as principal, on money placed in that option.
RIGHT TO CANCEL
You may return your Contract for a refund within 20 days after you
receive it. Unless a refund of all purchase payments is required by federal or
state law, the amount of the refund will be the total of all purchase payments
you paid, plus or minus any gains or losses on the amounts you invested in the
Subaccounts. We determine the value of the refund as of the date we receive
the refunded Contract. We will pay the refund within 7 days after we receive
the Contract. The Contract will then be deemed void. In some states you may
have more than 20 days, or receive a refund of the amount of your purchase
payments.
HOW TO INVEST
You may purchase a Contract for $1,000 or more (for both non-qualified
and Qualified Contracts). You may make additional payments at any time during
the Accumulation Phase. Send your payments to:
Glenbrook Life and Annuity Company
Customer Service Center
8301 Maryland Avenue
St. Louis, Missouri 63105
1-877-839-4214
INVESTMENT ALTERNATIVES
You may invest your money in any of the following Investment
Alternatives by directing your payments into one or more Subaccounts or into
the Fixed Account Option.
Each Subaccount invests exclusively in shares of the following Funds
managed by the investment advisor indicated of the Fund. Each Fund's assets
are held separately and each Fund has separate investment objectives and
policies. Prospectuses for the Funds more fully describe the portfolios.
The value of your investment in the Subaccounts will fluctuate daily
based on the investment results of the Funds in which you invest, and on the
fees and charges deducted. You bear investment risk on amounts you invest.
You also may direct all or a portion of your money to the Fixed Account
Option and receive a guaranteed rate of return. Money you place in the fixed
account will earn interest for periods (ranging from one to ten years) at a
fixed rate that we guarantee will never be less than 3.0%.
6
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TRANSFERS AMONG INVESTMENT ALTERNATIVES
You have the flexibility to transfer assets within your Contract. At any
time during the Accumulation Phase, you may transfer amounts among the
Subaccounts and between the Fixed Account Option and any Subaccount.
We do not assess a charge for any transfers. In the future, we may
impose a $10 charge after the twelfth transfer in a Contract Year. We may
restrict fixed account transfers.
FEES AND EXPENSES
We do not deduct any fees from purchase payments at the time you buy the
Contract. You invest the full amount of each purchase payment in one or more
of the Investment Alternatives.
We deduct two charges daily: a mortality and expense risk charge, equal
on an annual basis to no more than 0.50% of the money you have invested in the
Subaccounts; and an administrative expense charge, equal on an annual basis to
no more than 0.10% of the money you have invested in the Subaccounts.
We will deduct state premium taxes, which currently range from 0% to
3.5%, if you fully withdraw all of your Contract's value, if we pay out death
benefit proceeds, or when you begin to receive annuity payments. We assess a
premium tax fee only in those states that require us to pay premium taxes.
The Funds deduct daily investment charges from the amounts you have
invested in them. These charges currently range from [0.44% to 1.72%]
annually, depending on the Fund. See the Fee Table in this prospectus and the
prospectuses for the Funds.
ACCESS TO YOUR MONEY
You may withdraw all or part of your Contract Value at any time during
the Accumulation Phase. The minimum amount you can withdraw is [$50]. If the
balance of your Contract after a partial withdrawal would be less than
[$1,000], we will treat the withdrawal as a full withdrawal.
We do not deduct any withdrawal or surrender charges. Certain
restrictions apply to Contracts issued under qualified plans governed by
Internal Revenue Code Section 403(b). You also may have to pay federal income
taxes and a 10% penalty tax on any money you take out of the Contract. You
should consult your own tax counsel or other tax advisors regarding any
withdrawals.
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<PAGE>
DEATH BENEFIT
We will pay a death benefit before the Payout Start Date on any Owner's
death or, if the Owner is not a natural person, on the Annuitant's death. The
death benefit amount will be the greater of:
* The sum of all purchase payments, less any prior withdrawals and
premium taxes; or
* The Contract Value on the date we determine the death benefit.
ANNUITY PAYMENTS
Under the Contract, you may receive periodic income payments beginning
on the Payout Start Date you select. You may choose among several Income Plans
to fit your needs. You may choose to have these annuity payments come from the
Fixed Account, one or more of the Subaccounts, or both. The dollar amount of
the income payments may be variable, fixed, or both.
INQUIRIES
If you need additional information, please contact us at:
Glenbrook Life and Annuity Company
Customer Service Center
8301 Maryland Avenue
St. Louis, Missouri 63105
1-877-839-4214
CONDENSED FINANCIAL INFORMATION
Because the Subaccounts available under this Contract did not commence
operation before the date of this prospectus, financial information about the
Subaccounts is not included in this prospectus or in the SAI
GLENBROOK LIFE AND ANNUITY COMPANY
Glenbrook Life and Annuity Company is a stock life insurance company
that was organized under the laws of Illinois in 1992 and redomesticated as a
corporation under the laws of Arizona on December 28, 1998. We were originally
organized under the laws of Indiana in 1965. From 1965 to 1983, we were known
as "United Standard Life Assurance Company," and from 1983 to 1992, we were
known as "William Penn Life Assurance Company of America." We issue the
Contract and market the Contract in those jurisdictions in which Glenbrook
Life is licensed to operate: Puerto Rico, the District of Columbia and all
states except New York. Our main administrative office is located at 3100
Sanders Road, Northbrook, Illinois 60062.
We are a wholly owned subsidiary of Allstate Life Insurance Company
("Allstate Life"), a stock life insurance company incorporated under the laws
of Illinois. Allstate Life is a wholly owned subsidiary of Allstate Insurance
Company ("Allstate"), a stock property-liability insurance company
8
<PAGE>
incorporated under the laws of Illinois. The Allstate Corporation
("Corporation") owns all of the outstanding capital stock of Allstate.
We entered into a reinsurance agreement with Allstate Life, effective June
5, 1992. Under the reinsurance agreement, fixed account purchase payments are
automatically transferred to Allstate Life and become invested with the assets
of Allstate Life. Allstate Life accepts 100% of the liability under such
contracts. The obligations of Allstate Life under the reinsurance agreement are
to us. We remain the sole obligor under the Contract to the Owners.
THE VARIABLE ACCOUNT
We established the Glenbrook Life Discover Variable Account A as a separate
investment account on June 15, 1999, under Arizona law. The Variable Account is
registered with the Securities and Exchange Commission as a unit investment
trust under the Investment Company Act of 1940 ("Investment Company Act"), but
the SEC does not supervise the management or investment practices or policies of
the Variable Account, the Funds, or Glenbrook Life.
Under Arizona law, the assets of the Variable Account are held
separately from our other assets. The assets of the Variable Account equal to
the reserves and other Contract liabilities with respect to the Variable
Account are not chargeable with liabilities arising out of any other business
Glenbrook Life may conduct. The income, gains and losses, realized or
unrealized, from assets allocated to the Variable Account are credited to or
charged against the Variable Account, without regard to other income, gains or
losses of Glenbrook Life. The obligations under the Contracts are obligations
of Glenbrook Life.
The Variable Account receives and invests purchase payments made under
the Contracts. We may offer other variable annuities for which the Variable
Account may receive and invest payments.
The Variable Account is divided into Subaccounts. Each Subaccount
invests exclusively in shares of one of the Funds. We may add additional
Subaccounts in the future, some of which may be available under other variable
annuity contracts.
A separate Subaccount corresponds to each Fund. You decide the
Subaccounts to which you allocate purchase payments. Shares of the Funds will
be sold at net asset value to the Variable Account to fund the Contract. Any
transaction you make will occur at the next net asset values determined after
receipt of your transaction request. The Funds must redeem their shares at net
asset value upon our request.
A Fund's prospectus will explain how the net asset value for that Fund
is calculated.
9
<PAGE>
THE FUNDS
MSUF Value
MSUF Equity Growth
MSUF Mid Cap Value
MSUF Mid Cap Growth
MSUF U.S. Real Estate
MSUF International Magnum
MSUF Emerging Markets Equity
MSUF Global Equity
MSUF Fixed Income
MSUF High Yield
Van Kampen LIT Comstock
Van Kampen LIT Emerging Growth
Janus Aspen Capital Appreciation
Strong VIF Growth Fund II
Strong Opportunity Fund II
Warburg Pincus Small Company
Warburg Pincus Post Venture Capital
Scudder International
Scudder VLIF Bond
THERE CAN BE NO ASSURANCE THAT ANY FUND WILL ACHIEVE ITS OBJECTIVE.
The prospectus for each Fund contains more complete information,
including a description of the risks involved in investing in each Fund. A
COPY OF EACH FUND'S PROSPECTUS IS INCLUDED WITH THIS PROSPECTUS. YOU SHOULD
READ THE FUND PROSPECTUSES CAREFULLY BEFORE YOU INVEST.
INVESTMENT ADVISORS
THE FIXED ACCOUNT OPTION
We reserve the right to offer a Fixed Account Option under the Contract.
Money you direct to the Fixed Account Option will earn interest for a
guaranteed period of one to ten years--as we may, in our discretion,
designate--at a declared interest rate in effect at the time of your
allocation or transfer. As each designated period expires, we will, at our
discretion, declare a renewal interest rate that will not be less than the
3.0%. We may declare more than one interest rate for different monies you have
in the Fixed Account Option based upon the date of your allocation or transfer
into the fixed account.
You may allocate all or a portion of your premium payment to the Fixed
Account Option. You may withdraw or transfer your money from the Fixed Account
Option at any time on a first-in, first-out basis. If you withdraw money from
the fixed account, you will receive the amount you requested, minus any
applicable premium taxes and tax withholding. The aggregate annual expense
10
<PAGE>
charges of 0.60% of your average net assets in the Variable Account do not
apply to amounts allocated to the Fixed Account Option.
Purchase payments you allocate or transfer to the Fixed Account Option
become part of our general account. Neither the general account nor any
interest in it is generally subject to the provisions of the Securities Act of
1933 ("Securities Act") or the Investment Company Act, and, as a result, the
staff of the SEC has not reviewed the disclosures in this prospectus relating
to the fixed account. However, disclosures regarding the fixed account may be
subject to the provisions of the federal securities laws relating to the
accuracy and completeness of statements made in the prospectuses.
The general account includes all of our assets, except those assets
segregated in separate accounts such as the Variable Account. Unlike Variable
Account assets, all assets in the general account are subject to the
liabilities of our business operations. We have the sole discretion to invest
general account assets, subject to applicable law, and we bear the full
investment risk for all amounts contributed to the general account.
FEES AND EXPENSES
CONTRACT OWNER TRANSACTION EXPENSES
Because we do not deduct a sales load from your purchase payments,
the full amount of every purchase payment is invested in the Investment
Alternatives you select.
We do not assess a deferred sales charge or surrender fee if you
withdraw all or part of your Contract Value at any time before the earlier of
the Payout Start Date or an Owner's death (if the Owner is not a natural
person, the Annuitant's death).
We currently do not assess a fee for transfers among Funds or between
the fixed account and any Fund. We reserve the right to impose a $10 charge
after the twelfth transfer in a Contract Year, and to restrict transfers from
the fixed account. (This excludes transfers through dollar cost averaging and
automatic portfolio rebalancing.)
ANNUAL CONTRACT FEE
We do not assess a Contract maintenance charge to cover costs such as:
expenses incurred in billing and collecting purchase payments; keeping
records; processing death claims, cash withdrawals, and Contract changes;
calculating Accumulation Unit and annuity unit values; and issuing reports to
Owners and regulatory agencies.
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DEDUCTIONS FROM THE VARIABLE ACCOUNT
ADMINISTRATIVE EXPENSE CHARGE: We deduct a daily administrative expense
charge that equals, on an annual basis, 0.10% of the daily net assets you have
allocated to the Subaccounts. This charge is designed to cover actual
administrative expenses. The administrative charge does not necessarily equal
the expenses we incur. We guarantee that this charge will not increase.
MORTALITY AND EXPENSE RISK CHARGE: During the Accumulation Phase and
Income Period of the Contract, we deduct a daily mortality and expense risk
charge that equals, on an annual basis, 0.50% of the daily net assets you have
allocated to the Subaccounts. We guarantee that the 0.50% rate will not
increase over the life of the Contract.
The mortality risk arises from our guarantee to cover all death benefits
and to make income payments in accordance with the Income Plan you select. The
expense risk arises from the possibility that the administrative expense
charge will not be sufficient to cover actual administrative expenses.
DEDUCTIONS FOR PREMIUM TAXES
We deduct from Contract Value applicable state premium taxes or other
taxes relevant to the Contract (collectively referred to as "premium taxes")
either at the Payout Start Date, when a total withdrawal occurs, or when we
distribute the death benefit. Current premium tax rates range from 0 to 3.5%.
At the Payout Start Date, we will deduct the charge for premium taxes from
each Investment Alternative in the proportion that your value in that
Investment Alternative bears to your total Contract Value. We reserve the
right to deduct premium taxes from the purchase payments even where the
premium taxes are actually assessed at the Payout Start Date or upon total
withdrawal.
OTHER CHARGES AND DEDUCTIONS
The Funds deduct fees and expenses from the amounts you have invested in
them. A complete description of those expenses and deductions may be found in
the prospectuses for each Fund.
PURCHASING THE CONTRACT
You may purchase the Contract with a minimum initial purchase payment of
$1,000, and may make subsequent purchase payments of at least $100 each. We
will issue the Contract if the Annuitant and Owner are not older than age 90.
We may limit the dollar amount of purchase payments we will accept in the
future.
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RIGHT TO CANCEL
You may return your Contract to us for a refund within 20 days after you
receive it, or a longer period if applicable state law requires. Unless a
refund of all purchase payments is required by federal or state law, the
amount of the refund will be the total purchase payments you paid, plus or
minus any investment gains or losses on the amounts you invested in the
Subaccounts from the date of the allocation through the date we determine the
refund. You will receive a full refund of the amounts you allocated to the
Fixed Account Options. However, if federal or your state law requires us to
refund premium payments, your refund will equal the entire amount of the
premium payments you paid.
We determine the value of the refund as of the date we receive the
refunded Contract. We will pay the refund within 7 days after we receive the
Contract. The Contract will then be deemed void.
CREDITING YOUR FIRST PURCHASE PAYMENTS
When we receive a properly completed application with your first
payment, we will credit that payment to the Contract within two business days
of receiving the payment. If we receive an incomplete application, then we
will credit the payment within two business days of receiving the completed
application. If, for any reason, we cannot credit the payment to your account
within five business days of receipt of your application, we will notify you
of our delay and will immediately return the payment to you, unless you
specifically request that we not return the payment. We reserve the right to
reject any application.
We will credit all additional payments to your Contract at the close of
the Valuation Period in which we receive the payment.
ALLOCATING YOUR PURCHASE PAYMENTS
On the application, you instruct us how to allocate your purchase
payment among the Investment Alternatives. You must allocate your payments to
the Investment Alternatives either in whole percentages (from 0% to 100%,
totaling 100%) or in whole dollars (totaling the entire dollar amount of your
payment). Unless you send us written notice of a change, we will allocate each
additional payment you make according to the instructions for the previous
purchase payment. Any change in allocation instructions will be effective at
the time we receive the notice in good order.
We reserve the right to allocate your initial purchase payment to a
money market fund during the period in which you have the right to return your
Contract for a refund.
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ACCUMULATION UNITS
Each purchase payment you allocate to the Subaccounts will be credited
to the Contract as Accumulation Units. The number of Accumulation Units
credited is determined by dividing the amount allocated to a Subaccount by the
value of an Accumulation Unit of that Subaccount on the Valuation Date on
which the payment is received at or after 4:00 p.m. Eastern Time. If the
purchase payment is received at or after 4:00 p.m. Eastern Time, we will use
the Accumulation Unit Value computed on the next Valuation Date. For example,
if you make a $10,000 purchase payment to the Money Market Subaccount when its
Accumulation Unit Value equals $10, then we will credit 1,000 Accumulation
Units for the Money Market Subaccount to your Contract. The Variable Account,
in turn, will purchase $10,000 worth of shares of the Money Market Portfolio
of the Fund.
ACCUMULATION UNIT VALUE
Each Subaccount values its Accumulation Units separately. The value of
Accumulation Units will change for each Valuation Period depending upon the
investment performance of the shares of the Fund held by each Subaccount and
the deduction of certain expenses and charges.
The value of an Accumulation Unit in a Subaccount for any Valuation
Period equals the value of the Accumulation Unit as of the immediately
preceding Valuation Period, multiplied by the "Net Investment Factor" for that
Subaccount for the current Valuation Period. The "Net Investment Factor" for a
Valuation Period is a number representing the change, since the last Valuation
Date, in the value of Subaccount assets per Accumulation Unit resulting from
investment income, realized or unrealized capital gain or loss, deductions for
taxes, if any, and deductions for the mortality and expense risk charge and
the administrative expense charge.
YOU SHOULD EXPECT THE VALUE OF YOUR CONTRACT TO CHANGE DAILY TO REFLECT
THE INVESTMENT EXPERIENCE OF THE FUNDS IN WHICH YOU ARE INVESTED THROUGH THE
SUBACCOUNTS, ANY INTEREST EARNED ON THE FIXED ACCOUNT OPTION, AND THE
DEDUCTION OF CERTAIN EXPENSES AND CHARGES.
TRANSFERS
Before the Payout Start Date, you may transfer your Contract Value among
the Subaccounts and between the Fixed Account Option and any Subaccount.
Transfers from the Fixed Account Option are taken out on a first-in, first-out
basis. Transfers to or from more than one investment alternative on the same
day are treated as one transfer. Transfers through dollar cost averaging and
automatic portfolio rebalancing do not count as transfers. We do not assess a
charge for any transfers currently, and reserve the right to assess a $10
charge on each transfer after the twelfth transfer in a Contract Year.
We also reserve the right to limit the number of transfers in any
Contract Year or to refuse any transfer request for an Owner or certain Owners
if, in our sole discretion, we believe that:
* excessive trading by such Owner or Owners or a specific transfer
request or group of transfer requests may have a detrimental
effect on Accumulation Unit Values or the share prices of the
underlying mutual funds or would be to the disadvantage of other
Owners; or
* we are informed by one or more of the underlying mutual funds that
the purchase or redemption of shares is to be restricted because
of excessive trading or a specific transfer or group of transfers
is deemed to have a detrimental effect on share prices of affected
underlying mutual funds.
Such restrictions may be applied in any manner which is reasonably designed to
prevent any use of the transfer right which is considered by us to be to the
disadvantage of the other Owners.
After the Payout Start Date, transfers among Subaccounts or from a
variable amount income payment to a fixed amount income payment may be made
only once every six months, and may not be made during the first six months
following the Payout Start Date. Transfers out of a fixed amount income
payment are not permitted after the Payout Start Date.
TELEPHONE TRANSFERS
We accept telephone transfer requests at 1-877-839-4214, if we receive
them by 3:00 p.m. Central Time. We will not accept telephone transfer requests
received at any other telephone number, or after 3:00 p.m. Central Time.
Telephone transfer requests received before 4:00 p.m. Eastern Time are
effected at the next computed Accumulation Unit Value for the Subaccounts
involved. If the NYSE closes before 3:00 p.m. Eastern Time, or if it closes
for a period of time, but then reopens for trading on the same day, we will
process telephone transfer requests at the close of the NYSE on that
particular day.
We use procedures that we believe provide reasonable assurance that
telephone transfers are authorized by the proper persons. We may tape
telephone conversations with persons who claim to authorize the transfer, and
we may request identifying information from such persons. If we do not take
reasonable steps to help ensure that instructions communicated by telephone
are genuine, then we may be liable for losses resulting from unauthorized or
fraudulent instructions.
DOLLAR COST AVERAGING
Before the Payout Start Date, you may make transfers automatically
through dollar cost averaging ("DCA"). DCA permits you to transfer a specified
amount in equal monthly installments from one Subaccount to any other
Subaccount. DCA may not be used to transfer amounts to the fixed account.
There is no charge for participating in the DCA program. Nor do DCA transfers
count toward the twelve free transfers allowed during each Contract Year.
By transferring a set amount on a regular schedule instead of
transferring the total amount at one time, you reduce the risk of investing in
the underlying portfolio only when the price is high. Participating in the DCA
program does not guarantee a profit, however, and it does not protect against
a loss if market prices decline.
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AUTOMATIC PORTFOLIO REBALANCING
Transfers may be made automatically through automatic portfolio
rebalancing before the Payout Start Date. If you elect automatic portfolio
rebalancing, then we will rebalance all of your money allocated to the
Subaccounts to your desired allocations on a quarterly basis (or other
intervals that we may offer). Each quarter, money will be transferred among
Subaccounts to achieve the desired allocation.
Unless you send us written notice of a change, the desired allocation
will be the allocation you first selected. The new allocation will take effect
with the first rebalancing that occurs after we receive the written request.
We are not responsible for rebalancing that occurs before we receive your
written request for a new allocation.
Transfers made though automatic portfolio rebalancing are not counted
toward the twelve free transfers permitted per Contract Year. Any money you
have allocated to the Fixed Account Options will not be included in the
rebalancing.
ACCESS TO YOUR MONEY
WITHDRAWALS
You may withdraw all or part of your Contract Value at any time before
the Payout Start Date and before the Owner's death (or the Annuitant's death
if the Owner is not a natural person).
The amount you may withdraw is the full Contract Value next computed
after we receive the request for a withdrawal, minus any applicable federal
withholding or premium taxes. We do not deduct any withdrawal charges from a
full or partial withdrawal.
We will pay withdrawals from the Variable Account within seven days of
receiving the request, unless we delay payments for reasons specified below in
"Delay of Payments."
To complete a partial withdrawal from the Variable Account, we will
redeem Accumulation Units in an amount equal to the withdrawal and any
applicable premium taxes. You must name the Investment Alternatives from which
you wish to make the withdrawal. We will not honor an incomplete withdrawal
request.
If any portion of the withdrawal is to be taken from the Fixed Account
Option, then the amount requested will be deducted on a first-in, first-out
basis.
The minimum amount you may withdraw is $50. If your Contract Value after
a partial withdrawal would be less than $1,000, then we will treat the request
as a request for a full withdrawal and we will pay out the entire Contract
Value, minus any charges and premium taxes. We may waive these withdrawal
restrictions.
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You may take partial withdrawals automatically through systematic
withdrawals on a monthly, quarterly, semi-annual or annual basis. You may
request systematic withdrawals of $50 or more at any time before the Payout
Start Date. We may prohibit systematic withdrawals if you also elect dollar
cost averaging.
If you have a valid telephone transfer request form on file with us,
then you may make a partial withdrawal by telephone. We calculate the Contract
Value we will pay you at the price next computed after we receive your
withdrawal request, and will pay you the amount you request within seven days
of when we receive your request. Unless you elect in writing not to have
federal income taxes withheld, by law, we must withhold taxes from the taxable
portion of the withdrawal.
Partial and full withdrawals may be subject to federal income tax and a
10% tax penalty. This tax and penalty are explained in "Federal Tax Matters."
After the Payout Start Date, we will permit withdrawals only when
annuity payments are being made from the Variable Account for a specified
number of payments (I.E., Income Plan 3). In that case, you may terminate the
Variable Account portion of the income payments at any time and receive a lump
sum equal to the commuted balance of the remaining variable payments due. The
commuted balance of the remaining variable payments will equal the net present
value of the future stream of payments, using a discount rate of 3% and the
annuity unit value next determined after the receipt of your request.
ANNUITY INCOME PAYMENTS
PAYOUT START DATE FOR ANNUITY PAYMENTS
The Payout Start Date is the day that we begin paying annuity payments
under the Contract. You may change the Payout Start Date at any time by
sending us written notice at least 30 days before the scheduled Payout Start
Date. The Payout Start Date must be:
* at least one month after the Issue Date; and
* no later than the day the Annuitant reaches age 90, or the 10th
anniversary of the Issue Date, if later.
The dollar amount of the annuity payments may be variable, fixed, or
both. The method of calculating the first annuity payment is different for
variable and fixed payments.
VARIABLE INCOME PAYMENTS
The dollar amount of variable income payments depends upon:
* the investment experience of the Subaccounts you select,
* any premium taxes due,
* the age and sex of the Annuitant, and
* the Income Plan you chose.
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The total income payments we will pay to you may be more or less than
the total of the purchase payments you paid to us because:
* variable income payments will vary with the investment results of
the Funds, and
* Annuitants may live longer than, or not as long as, expected.
The Income Plan option selected will affect the dollar amount of each
annuity payment. Annuity payments are determined based on an assumed
investment rate, the investment performance of the Funds in which the
Subaccounts you select invest, and the deduction of certain fees and charges.
If the actual net investment experience of the Subaccounts is less than the
assumed investment rate, then the dollar amount of the annuity payments will
decrease. If the net investment experience equals the assumed investment rate,
then the dollar amount of the annuity payments will stay level. If the net
investment experience exceeds the assumed investment rate, then the dollar
amount of the annuity payments will increase. The assumed investment rate
under the Contract is 3%. For more information on how variable income payments
are determined, see the SAI.
FIXED INCOME PAYMENTS
If you choose to have any portion of your annuity payments come from the
fixed account, the payment amount will be fixed for the duration of the Income
Plan and guaranteed by us. We calculate the dollar amount of the fixed income
payment by multiplying the portion of the Contract Value in the fixed account
on the Payout Start Date (minus any applicable premium tax) by the value from
the income payment table in your Contract, or, if higher, the value we are
offering on your Payout Start Date.
ANNUITY TRANSFERS
After the Payout Start Date, you may not make any transfers from the
fixed account. You may transfer amounts among Subaccounts, or from the
variable income payment to the fixed income payment starting six months after
the Payout Start Date. Transfers may be made once every six months thereafter.
INCOME PLANS
We offer the following Income Plans under the Contract. Other Income
Plans may be available upon request.
INCOME PLAN 1 - LIFE INCOME WITH GUARANTEED PAYMENTS: We will make
payments for as long as the Annuitant lives. If the Annuitant dies before the
selected number of guaranteed payments have been made, then we will pay the
remainder of the guaranteed payments to the Beneficiary.
INCOME PLAN 2 - JOINT AND SURVIVOR LIFE INCOME WITH GUARANTEED PAYMENTS:
We will make payments for as long as either the Annuitant or joint annuitant
named at the time of Income Plan selection lives. If both the Annuitant and
the joint annuitant die before the selected number of guaranteed payments have
been made, then we will pay the remainder of the guaranteed payments to the
Beneficiary.
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INCOME PLAN 3 - GUARANTEED NUMBER OF PAYMENTS: We will make payments for
a specified number of months, beginning on the Payout Start Date. These
payments do not depend on the Annuitant's life. The guaranteed number of
months may range from 60 to 360. We will deduct a mortality and expense risk
charge from Variable Account assets supporting these payments even though we
do not bear any mortality risk.
The length of any guaranteed payment period and the frequency of annuity
income payments under your selected Income Plan will affect the dollar amounts
of each income payment. As a general rule, longer guarantee periods result in
lower annuity income payments, all other things being equal. For example, if
you choose an Income Plan with payments that depend on the life of the
Annuitant, but with no minimum specified period for guaranteed payments, the
income payments generally will be greater than the income payments made under
the same Income Plan with a minimum specified period for guaranteed payments.
You may change the Income Plan until 30 days before the Payout Start
Date. If you chose an Income Plan which depends on the life of the Annuitant
or joint annuitant, then we will require proof of age before we being making
income payments. We will assess applicable premium taxes. If you do not select
an Income Plan, then we will make income payments in accordance with Income
Plan 1- Life Income with Guaranteed Payments for 120 Months.
We currently use sex-distinct annuity tables. However, if Congress or
the states pass legislation, then we reserve the right to use income payment
tables that do not distinguish on the basis of sex. Special rules and
limitations may apply to certain Qualified Contracts.
If the Contract Value to be applied to an Income Plan is less than
$2,000, or the monthly payments determined under the Income Plan are less than
$20, then we may pay the Contract Value, minus any applicable taxes, in a lump
sum or we may change the payment frequency to an interval that results in
income payments of at least $20.
DEATH BENEFITS
DEATH BENEFIT PAYMENT PROVISIONS
We will pay a death benefit if the Owner dies before the Payout Start
Date or, if the Owner is not a natural person, the Annuitant dies before the
Payout Start Date.
If the new Owner eligible to receive the death benefit is not a natural
person, then the new Owner may elect to receive the death benefit in one or
more payments. If the new Owner is a natural person, then the new Owner may
elect to receive the death benefit in one or more payments or in periodic
payments through an Income Plan.
The entire death benefit must be paid within five years after the date
of death unless the new Owner elects to receive the death benefit through an
Income Plan, or a surviving spouse continues the Contract.
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If the new Owner elects to receive the death benefit through an Income
Plan, payments from the Income Plan must begin within one year of the date of
death and must be payable throughout:
* the new Owner's life; or
* a period not to exceed the new Owner's life expectancy; or
* the new Owner's life, with payments guaranteed for a period not to
exceed the new Owner's life expectancy.
If the deceased Owner's surviving spouse is the new Owner, then the
spouse may elect one of the options listed above or may continue the Contract
in the accumulation phase as if the death had not occurred. We will only
permit the Contract to be continued once. On the day the Contract is
continued, we will set the Contract Value equal to the death benefit
calculated as of the date on which we receive all the information we need to
process your surviving spouse's request to continue the Contract after your
death. Because the death benefit can never be less than the current Contract
Value, our resetting the Contract Value will never cause the Contract Value to
decrease.
DEATH BENEFIT AMOUNT
The death benefit amount is equal to the greater of:
* the sum of all purchase payments, less any prior withdrawals and
premium taxes; or
* the Contract Value on the date we determine the death benefit.
We will determine the value of the death benefit at the end of the
Valuation Period during which we receive a complete request for payment of the
death benefit. A complete request includes proof of death, and such other
documentation as we may require.
FEDERAL TAX MATTERS
INTRODUCTION
THE FOLLOWING DISCUSSION IS GENERAL AND IS NOT INTENDED AS TAX ADVICE.
WE MAKE NO GUARANTEE REGARDING THE TAX TREATMENT OF ANY CONTRACT OR
TRANSACTION INVOLVING A CONTRACT.
Federal, state, local and other tax consequences of ownership or receipt
of distributions under an annuity contract depend on your individual
circumstances. If you are concerned about any tax consequences with regard to
your individual circumstances, then you should consult a competent tax
adviser.
TAXATION OF ANNUITIES
TAX DEFERRAL
Generally, you are not taxed on increases in the Contract Value until a
distribution occurs. This rule applies only where:
* the owner is a "natural person,"
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* the investments of the Variable Account are "adequately
diversified" in accordance with Treasury Department Regulations,
and
* Glenbrook Life is considered the owner of the Variable Account
assets for federal income tax purposes.
NONNATURAL OWNERS
As a general rule, annuity contracts owned by nonnatural persons such as
corporations, trusts, or other entities are not treated as annuity contracts
for federal income tax purposes. The income on such contracts is taxed as
ordinary income received or accrued by the owner during the taxable year.
Please see the SAI for a discussion of several exceptions to the general rule
for contracts owned by nonnatural persons.
DIVERSIFICATION REQUIREMENTS
For a Contract to be treated as an annuity for federal income tax
purposes, the investments in the Variable Account must be "adequately
diversified" consistent with standards under Treasury Department regulations.
If the investments in the Variable Account are not adequately diversified, the
Contract will not be treated as an annuity contract for federal income tax
purposes. As a result, the income on the Contract will be taxed as ordinary
income received or accrued by the Owner during the taxable year. Although
Glenbrook Life does not control the Funds or their investments, we expect the
Funds to meet the diversification requirements.
OWNERSHIP TREATMENT
The IRS has stated that you will be considered the owner of Variable
Account assets if you possess incidents of ownership in those assets, such as
the ability to exercise investment control over the assets. At the time the
diversification regulations were issued, the Treasury Department announced
that the regulations do not provide guidance concerning circumstances in which
investor control of the Variable Account investments may cause an investor to
be treated as the owner of the Variable Account. The Treasury Department also
stated that future guidance would be issued regarding the extent that owners
could direct Subaccount investments without being treated as owners of the
underlying assets of the Variable Account.
Your rights under this Contract are different from those described by
the IRS in rulings in which it found that contract owners were not owners of
separate account assets. For example, you have the choice to allocate premiums
and Contract Value among more investment options. Also, you may be able to
transfer among investment options more frequently than in such rulings. These
differences could result in your being treated as the owner of the Variable
Account. If this occurs, income and gain from the Variable Account assets
would be included in your gross income. Glenbrook Life does not know what
standards will be set forth in any regulations or rulings which the Treasury
Department may issue. It is possible that future standards announced by the
Treasury Department could adversely affect the tax treatment of your Contract.
We reserve the right to modify the Contract as necessary to attempt to prevent
you from being considered the owner of the assets of the Variable Account for
purposes of federal tax law. However, we make no guarantee that such
modification to the Contract will be successful.
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TAXATION OF PARTIAL AND FULL WITHDRAWALS
If you make a partial withdrawal under a non-qualified contract, amounts
received are taxable to the extent the contract value, before the deduction of
any applicable surrender charges, exceeds the investment in the contract. The
investment in the contract is the gross premiums paid for the Contract minus
any amounts previously received from the Contract if such amounts were
properly excluded from your gross income. If you make a partial withdrawal
under a qualified contract, the portion of the payment that bears the same
ratio to the total payment as the investment in the contract (I.E.,
nondeductible IRA contributions, after tax contributions to qualified plans)
bears to the contract value, is excluded from your income. If you make a full
withdrawal under a non-qualified contract or a qualified contract, the amount
received will be taxable only to the extent it exceeds the investment in the
contract.
"Non-qualified distributions" from Roth IRAs are treated as made from
contributions first and are included in gross income only to the extent that
distributions exceed contributions. "Qualified distributions" from Roth IRAs
are not included in gross income. "Qualified distributions" are any
distributions made more than five taxable years after the taxable year of the
first contribution to any Roth IRA and which are:
* made on or after the date the individual attains age 59 1/2,
* made to a Beneficiary after the owner's death,
* attributable to the owner being disabled, or
* for a first time home purchase (first time home purchases are
subject to a lifetime limit of $10,000).
If you transfer a non-qualified contract without full and adequate
consideration to a person other than your spouse (or to a former spouse
incident to a divorce), you will be taxed on the difference between the
contract value and the investment in the contract at the time of transfer.
Except for certain Qualified Contracts, any amount you receive as a loan under
a contract, and any assignment or pledge (or agreement to assign or pledge) of
the contract value is treated as a withdrawal of such amount or portion.
TAXATION OF ANNUITY PAYMENTS
Generally, the rule for income taxation of payments received from a
non-qualified contract provides for the return of your investment in the
contract in equal tax-free amounts over the payment period. The balance of
each payment received is taxable. For fixed annuity payments, the amount
excluded from income is determined by multiplying the payment by the ratio of
the investment in the contract (adjusted for any refund feature or period
certain) to the total expected value of annuity payments for the term of the
contract. If you elect variable annuity payments, the amount excluded from
taxable income is determined by dividing the investment in the contract by the
total number of expected payments. The annuity payments will be fully taxable
after the total amount of the investment in the contract is excluded using
these ratios. If you die and annuity payments cease before the total amount of
the investment in the contract is recovered, the unrecovered amount will be
allowed as a deduction for your last taxable year.
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TAXATION OF DEATH BENEFITS
Death of an owner, or death of the Annuitant if the contract is owned by
a non-natural person, will cause a distribution of death benefits from a
contract. Generally, such amounts are included in income as follows:
* if distributed in a lump sum, the amounts are taxed in the same manner as a
full withdrawal, or
* if distributed under an annuity option, the amounts are taxed in the same
manner as an annuity payment.
Please see the SAI for more detail on distribution at death requirements.
PENALTY TAX ON PREMATURE DISTRIBUTIONS
A 10% penalty tax applies to the taxable amount of any premature
distribution from a non-qualified contract. The penalty tax generally applies
to any distribution made before the date you attain age 59 1/2. However, no
penalty tax is incurred on distributions:
* made on or after the date the owner attains age 59 1/2,
* made as a result of an owner's death or disability,
* made in substantially equal periodic payments over the owner's
life or life expectancy,
* made under an immediate annuity, or
* attributable to an investment in the contract before August 14,
1982.
You should consult a competent tax advisor to determine if any other
exceptions to the penalty apply to your situation. Similar exceptions may
apply to distributions from Qualified Contracts.
AGGREGATION OF ANNUITY CONTRACTS
All non-qualified deferred annuity contracts issued by Glenbrook Life
(or our affiliates) to the same owner during any calendar year will be
aggregated and treated as one annuity contract for purposes of determining the
taxable amount of a distribution.
TAX QUALIFIED CONTRACTS
The Contract may be used as an investment with certain Qualified Plans,
such as:
* IRAs under Section 408 of the Code;
* Roth IRAs under Section 408A of the Code;
* Simplified Employee Pension Plans under Section 408(k) of the
Code;
* Savings Incentive Match Plans for Employees (SIMPLE) under Section
408(p) of the Code Tax Sheltered Annuities under Section 403(b) of
the Code;
* Corporate and Self-employed Pension and Profit Sharing Plans;
* and State and Local Government and Tax-exempt Organization
Deferred Compensation Plans.
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Glenbrook Life reserves the right to limit the availability of the
Contract for use with any of the qualified plans listed above. In the case of
certain qualified plans, the terms of the plans may govern the right to
benefits, regardless of the terms of the Contract.
RESTRICTIONS UNDER SECTION 403(B) PLANS
Section 403(b) of the Internal Revenue Code provides tax-deferred
retirement savings plans for employees of certain non-profit and educational
organizations. Under Section 403(b), any Contract used for a 403(b) plan must
provide that distributions attributable to salary reduction contributions made
after December 31, 1988, and all earnings on salary reduction contributions,
may be made only:
* on or after the date the employee--attains age 59 1/2, separates
from service, dies, becomes disabled; or
* on account of hardship. (Earnings on salary reduction
contributions may not be distributed on account of hardship.)
These limitations do not apply to withdrawals where Glenbrook Life is
directed to transfer some or all of the Contract Value to another Section
403(b) plan.
INCOME TAX WITHHOLDING
We are required to withhold federal income tax at a rate of 20% on all
"eligible rollover distributions" unless you elect to make a "direct rollover"
of such amounts to an IRA or eligible retirement plan. Eligible rollover
distributions generally include all distributions from Qualified Contracts,
excluding IRAs, with the exception of:
* required minimum distributions;
* a series of substantially equal periodic payments made over a
period of at least 10 years; or
* over the life (or joint lives) of the participant (and
Beneficiary).
Glenbrook Life may be required to withhold federal and state income
taxes on any distributions from nonqualified Contracts, or Qualified Contracts
that are not eligible rollover distributions, unless you notify us of your
election not to have taxes withheld.
GENERAL MATTERS
OWNER
The Owner has the sole right to exercise all rights and privileges under
the Contract, except as otherwise provided in the Contract. A non-natural and
natural person cannot jointly own the Contract.
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BENEFICIARY
Subject to the terms of any irrevocable Beneficiary designation, you may
change the Beneficiary at any time by sending us written notice. Any change
will be effective at the time you sign the notice, whether or not the
Annuitant is living when we receive the change. We will not be liable for any
payment or settlement made before we receive the written notice.
Unless otherwise provided in the Beneficiary designation, if a
Beneficiary predeceases the Owner and there are no other surviving
beneficiaries, then the new Beneficiary will be the Owner's spouse. If the
Owner's spouse is deceased, then the Owner's children (in equal shares). If
all of the Owner's children are deceased, then the Owner's estate.
Multiple beneficiaries may be named. Unless otherwise provided in the
Beneficiary designation, if more than one Beneficiary survives the Owner, then
the surviving beneficiaries will share equally in any amounts due.
ASSIGNMENTS
We will not honor an assignment of an interest in a Contract as
collateral or security for a loan. The Owner may assign other benefits under
the Contract before the Payout Start Date. No Beneficiary may assign benefits
under the Contract until they are due. We will not be bound by an assignment
unless it is signed by the Owner and filed with us. We are not responsible for
assessing the validity of an assignment. Federal law prohibits or restricts
the assignment of benefits under many types of retirement plans, and the terms
of such plans may themselves contain restrictions on assignments.
DELAY OF PAYMENTS
Payment of any amounts due from the Variable Account under the Contract
will be made within seven days, unless:
* the NYSE is closed for other than usual weekends or holidays, or
trading on the NYSE is otherwise restricted;
* an emergency exists as defined by the SEC;
* or the SEC permits delay for the protection of the Owners.
Payments or transfers from the fixed account may be delayed for up to 6
months.
MODIFICATION
We cannot modify the Contract without your consent, except:
* to make the Contract meet the requirements of the Investment
Company Act;
* to make the Contract comply with any changes in the Internal
Revenue Code; or
* to make any changes required by the Internal Revenue Code or by
any other applicable law.
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CUSTOMER INQUIRIES
If you would like additional information, please contact a
representative of Glenbrook Life or call us at:
Glenbrook Life and Annuity Company
Customer Service Center
8301 Maryland Avenue
St. Louis, Missouri 63105
1-800-242-4402
DISTRIBUTION OF THE CONTRACTS
Allstate Life Financial Services, Inc. ("ALFS"), 3100 Sanders Road,
Northbrook, Illinois, a wholly owned subsidiary of Allstate Life Insurance
Company, acts as the principal underwriter of the Contracts. ALFS is
registered with the SEC as a broker-dealer under the Securities Exchange Act
of 1934 and is a member of the National Association of Securities Dealers,
Inc. ("NASD"). Glenbrook Life may pay ALFS a commission for distribution of
the Contracts.
Contracts will be offered via the Internet and sold by registered
representatives of Discover Brokerage who are licensed insurance agents
appointed by Glenbrook Life--either individually or through an incorporated
insurance agency.
We will pay commissions to Discover Brokerage for sales of the
Contract. Commissions paid may vary, but we estimate that total commissions
paid on all Contract sales will not exceed [ %] of all purchase payments. From
time to time, we may pay or permit other promotional incentives, in cash,
credit or other compensation. The commission is intended to cover distribution
expenses incurred by Discover Brokerage in selling the Contracts.
VOTING RIGHTS
The Owner or anyone with a voting interest in a Subaccount may instruct
us on how to vote at the Fund's shareholder meetings. We will solicit and cast
each vote according to the procedures set up by the Fund and to the extent
required by law. We reserve the right to vote the eligible shares in our own
right, if subsequently permitted by the Investment Company Act, its
regulations or interpretations thereof.
We will vote Fund shares for which no timely instructions were received
in proportion to the voting instructions which we receive with respect to all
Contracts participating in that Subaccount. We will apply voting instructions
to abstain on a pro-rata basis to reduce the votes eligible to be cast.
Before the Payout Start Date, you hold the voting interest in the
Subaccount. We will determine the number of your votes by dividing the portion
of your Contract Value in the Subaccount by the net asset value per share of
the applicable portfolio.
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After the Payout Start Date, the person receiving variable income
payments has the voting interest, and the votes decrease as income payments
are made and the reserves for the Contract decrease. That person's number of
votes will be determined by dividing the reserve for such Contract allocated
to the applicable Subaccount by the net asset value per share of the
corresponding eligible portfolio.
GENERAL PROVISIONS
LEGAL PROCEEDINGS
From time to time we are involved in pending and threatened litigation
in the normal course of our business in which claims for monetary damages are
asserted. Management, after consultation with legal counsel, does not
anticipate the ultimate liability arising from such pending or threatened
litigation to have a material effect on our financial condition.
FINANCIAL STATEMENTS
Our financial statements and the financial statements of the Variable
Account are included in the SAI.
LEGAL MATTERS
Porter, Wright, Morris & Arthur, LLP has provided advice on certain
legal matters relating to the federal securities laws applicable to the issue
and sale of the Contracts. Michael J. Velotta, General Counsel of the Company,
has passed upon all matters of Arizona and Illinois law pertaining to the
Contracts, including the validity of the Contracts and our right to issue such
Contracts under Arizona insurance law.
YEAR 2000
We are heavily dependent upon complex computer systems for all phases of
our operations, including customer service, and contract administration.
Because many of our older computer software programs recognize only the last
two digits of the year in any date, some software may fail to operate properly
in or after the year 1999, if software is not reprogrammed, remediated or
replaced, ("Year 2000 Issue"). We believe that many of our counterparties and
suppliers also have Year 2000 Issues that could affect us.
In 1995, Allstate commenced a plan intended to mitigate and/or prevent
the adverse effects of Year 2000 Issues. These strategies include normal
development and enhancement of new and existing systems, upgrades to operating
systems already covered by maintenance agreements and modifications to
existing systems to make them Year 2000 compliant. The plan also includes
actively working with our major external counterparties and suppliers to
assess their compliance efforts and our exposure to them.
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Allstate currently is identifying key processes and developing
contingency plans in the event that the systems supporting its key processes
are not Year 2000 compliant at the end of 1999. Until these plans are
complete, management is unable to determine an estimate of the most reasonably
possible worst case scenario resulting from issues relating to the Year 2000
Issue. We presently believe that we will resolve the Year 2000 Issue in a
timely manner, and the financial impact will not materially affect the results
of our operations, liquidity or financial position. The costs of addressing
Year 2000 Issues are and will be expensed as incurred.
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ORDER FORM
Please send me a copy of the most recent Statement of Additional
Information for the Glenbrook Life Discover Variable Account A.
Date:___________________________________________________________________
Name:___________________________________________________________________
Street Address:_________________________________________________________
City, State, Zip Code:__________________________________________________
Send to: Glenbrook Life and Annuity Company
Customer Service Center
8301 Maryland Avenue
St. Louis, Missouri 63105
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<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
For the
DISCOVER VARIABLE ANNUITY
Individual and Group Flexible Premium Deferred Variable Annuity Contracts
Issued Through
GLENBROOK LIFE DISCOVER VARIABLE ACCOUNT A
Offered by
GLENBROOK LIFE AND ANNUITY COMPANY
Customer Service Center
8301 Maryland Avenue
St. Louis, MO 63105
1-877-839-4214
-----------
This Statement of Additional Information provides further discussion of
subjects presented in the current prospectus for the Discover Variable
Annuity, a flexible premium deferred variable annuity (the "Contract") offered
by Glenbrook Life and Annuity Company ("Glenbrook Life," "we," "us"). We are a
wholly owned subsidiary of Allstate Life Insurance Company.
You may obtain a copy of the prospectus dated [ ,] 1999, by calling (877)
839-4214 or writing to us at the address listed above.
THIS STATEMENT OF ADDITIONAL INFORMATION IS NOT A PROSPECTUS AND SHOULD
BE READ ONLY IN CONJUNCTION WITH THE PROSPECTUS FOR THE CONTRACT.
DATED , 1999
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
<S> <C>
IMPORTANT TERMS................................................................................. 1
ADDITIONS, DELETIONS OR SUBSTITUTIONS OF INVESTMENTS............................................ 1
REINVESTMENT.................................................................................... 2
THE CONTRACT.................................................................................... 2
PURCHASE OF CONTRACTS......................................................................... 2
PERFORMANCE DATA................................................................................ 2
CALCULATION OF PERFORMANCE DATA................................................................. 2
OTHER PERFORMANCE DATA.......................................................................... 3
CUMULATIVE TOTAL RETURNS...................................................................... 3
ADJUSTED HISTORICAL PORTFOLIO TOTAL RETURNS................................................... 3
TAX-FREE EXCHANGES (1035 EXCHANGES, ROLLOVERS AND TRANSFERS).................................... 4
PREMIUM TAXES................................................................................... 4
TAX RESERVES.................................................................................... 4
INCOME PAYMENTS................................................................................. 5
CALCULATION OF VARIABLE ANNUITY UNIT VALUES.................................................. 5
GENERAL MATTERS................................................................................. 5
INCONTESTABILITY.............................................................................. 5
SETTLEMENTS................................................................................... 5
SAFEKEEPING OF VARIABLE ACCOUNT ASSETS........................................................ 5
SAFEKEEPING OF VARIABLE ACCOUNT RECORDS....................................................... 6
FEDERAL TAX MATTERS............................................................................. 6
INTRODUCTION.................................................................................. 6
TAXATION OF GLENBROOK LIFE AND ANNUITY COMPANY................................................ 6
EXCEPTIONS TO THE NONNATURAL OWNER RULE....................................................... 7
IRS REQUIRED DISTRIBUTION AT DEATH RULES...................................................... 7
QUALIFIED PLANS............................................................................... 7
TYPES OF QUALIFIED PLANS...................................................................... 8
IRAS........................................................................................ 8
ROTH IRAS................................................................................... 8
SIMPLIFIED EMPLOYEE PENSION PLANS........................................................... 8
SAVINGS INCENTIVE MATCH PLANS FOR EMPLOYEES (SIMPLE PLANS).................................. 9
TAX SHELTERED ANNUITIES..................................................................... 9
CORPORATE AND SELF-EMPLOYED PENSION AND PROFIT SHARING PLANS................................ 9
STATE AND LOCAL GOVERNMENT AND TAX-EXEMPT ORGANIZATION DEFERRED COMPENSATION PLANS.......... 9
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UNDERWRITERS....................................................................................10
LEGAL MATTERS...................................................................................10
EXPERTS.........................................................................................10
FINANCIAL STATEMENTS............................................................................11
</TABLE>
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IMPORTANT TERMS
The special terms in this SAI are the ones defined in the prospectus and
the following.
* ANNUITY UNIT: The measure used to calculate the amount of annuity
income payments after the Payout Start Date.
* ANNUITY UNIT VALUE: The monetary value of each Annuity Unit that
is calculated on each Valuation Date. Each Subaccount has its own
Annuity Unit Value.
ADDITIONS, DELETIONS OR SUBSTITUTIONS OF INVESTMENTS
We retain the right, subject to any applicable law, to make additions
to, deletions from or substitutions for the Fund shares held by any
Subaccount. We also reserve the right to eliminate the shares of any of the
Funds and to substitute shares of another Fund, or of another open-end,
registered investment company, if the shares of a Fund are no longer available
for investment, or if, in our judgment, investment in any Fund would become
inappropriate in view of the purposes of the Variable Account.
Substitutions of shares in a Subaccount will not be made until you have
been notified of the change, and until the Securities and Exchange Commission
has approved the change, to the extent such notification and approval are
required by the Investment Company Act of 1940. Nothing contained in this
Statement of Additional Information shall prevent the Variable Account from
purchasing other securities for other series or classes of contracts, or from
effecting a conversion between series or classes of contracts on the basis of
requests made by Owners.
We also may establish additional Subaccounts of the Variable Account.
Each additional Subaccount would purchase shares of a new or an existing
underlying fund. New Subaccounts may be established when, in our sole
discretion, marketing needs or investment conditions warrant. Any new
Subaccounts offered in conjunction with the Contract will be made available to
existing Owners as determined by Glenbrook Life. We may also eliminate one or
more Subaccounts if, in its sole discretion, marketing, tax or investment
conditions so warrant.
In the event of any such substitution or change, we may, by appropriate
endorsement, make such changes in the Contract as may be necessary or
appropriate to reflect such substitution or change. If deemed to be in the
best interests of persons having voting rights under the policies, the
Variable Account may be operated as a management company under the Investment
Company Act or it may be deregistered under the Investment Company Act in the
event registration is no longer required.
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REINVESTMENT
All dividends and capital gains distributions from the Funds are
automatically reinvested in shares of the distributing Fund at its net asset
value.
THE CONTRACT
PURCHASE OF CONTRACTS
We offer the Contracts to the public via the Internet, through Discover
Brokerage and certain of its registered representatives who are licensed under
the federal securities laws and state insurance laws. We will pay commissions
to Discover Brokerage for sales of the Contract.
PERFORMANCE DATA
From time to time the Variable Account may publish advertisements
containing performance data relating to its Subaccounts. The performance data
for the Subaccounts (other than for a money market Subaccount) will always be
accompanied by total return quotations. Performance figures used by the
Variable Account are based on actual historical performance of its Subaccounts
for specific periods. The figures are not estimates or guarantees of
investment performance, and do not necessarily represent the actual experience
of amounts invested by a particular Contract Owner.
We may disclose performance data in a standardized format prescribed by
the US Securities and Exchange Commission, and in nonstandardized format.
Standardized performance data must accompany disclosure of nonstandardized
performance data.
Because the Subaccounts available under this Contract did not commence
operation before the date of the prospectus for the Contract, there is no
standardized performance data, or non-standardized presentation of cumulative
total returns, to present at this time.
CALCULATION OF PERFORMANCE DATA
The average annual total return of a subaccount assumes that an
investment has been held in the subaccount for certain periods of time,
including the period measured from the date the subaccount began operations.
We will provide the average annual total return for each subaccount that has
been in operation for 1, 5, and 10 years, or from the date of commencement of
subaccount operations, if shorter than any of the foregoing time periods. The
total return quotations will represent the average annual compounded rates of
return that an initial investment of $1,000 would earn as of the last day of
the 1, 5 and 10 year periods (or from the date of commencement of subaccount
operations, if shorter than any of the foregoing time periods).
Total returns will be calculated using accumulation unit values which
Glenbrook calculates on each Valuation Date based on the performance of the
subaccount's corresponding underlying Fund, and are reduced by all fees and
charges under the Contract, including the mortality and expense risk charge of
0.50% and an administrative expense charge of 0.10%.
Total return is calculated according to the following formula: TR=(ERV/P)1/N-1
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<PAGE>
Where:
TR = The average annual total return net of subaccount recurring charges
for the Contracts.
ERV = The redeemable value of the hypothetical account at the end of the
period.
P = A hypothetical single payment of $1,000.
N = The number of years in the period.
NEITHER THE YIELD NOR THE TOTAL RETURN CALCULATIONS TAKE INTO ACCOUNT
ANY APPLICABLE PREMIUM TAXES. APPLYING PREMIUM TAXES WILL REDUCE THE YIELD AND
TOTAL RETURN OF A CONTRACT.
OTHER PERFORMANCE DATA
CUMULATIVE TOTAL RETURNS
We may disclose average annual total return in nonstandard formats and
cumulative total return. This means that the data may be presented for
different time periods and different dollar amounts. The Cumulative Total
Returns will be calculated using the following formula:
CTR = ([GRAPHIC OMITTED]) - 1
Where:
* CTR= The Cumulative Total Return net of subaccount recurring
charges for the period.
* ERV= The ending redeemable value of the hypothetical investment at
the end of the period.
* P= A hypothetical single payment of $1,000.
ADJUSTED HISTORICAL PORTFOLIO TOTAL RETURNS
We also may present historic performance data for the Funds since their
inception, reduced by all fees and charges you would pay under the
Contract--the mortality and expense risk charge of 0.50% and an administrative
expense charge of 0.10%. Such adjusted historic performance includes data that
precedes the inception dates of the Subaccounts, but is designed to show the
performance that would have resulted if the Contract had been available during
that time.
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<PAGE>
We may report other information, including the effect of tax-deferred
compounding on a Subaccount's returns, through tables, graphs, or charts.
Tax-deferred compounding can lead to substantial long-term accumulation of
assets, if the investment experience of a Fund is positive.
Sales literature, advertisements or other reports also may refer to A.M.
Best's rating of Glenbrook Life as an insurance company. Several independent
rating agencies regularly evaluate life insurer's claims-paying ability,
quality of investments and overall stability. For financial strength, A.M.
Best Company assigns an [A+r] to us, and an [A+] to Allstate Life, which
automatically reinsures all of our [net business]. Standard & Poor's Insurance
Rating Services assigns us a financial strength rating of AA+ (very strong).
Moody's assigns us a financial strength rating of Aa2 (Excellent). These
ratings do not relate to the investment performance of the Variable Account.
TAX-FREE EXCHANGES (1035 EXCHANGES, ROLLOVERS AND TRANSFERS)
We accept purchase payments that are the proceeds of an annuity contract
in a transaction qualifying for a tax-free exchange under Section 1035 of the
Internal Revenue Code. Except as required by federal law in calculating the
basis of the annuity contract, we do not differentiate between Section 1035
purchase payments and non-Section 1035 purchase payments.
We also accept "rollovers" and transfers from contracts qualifying as
tax-sheltered annuities ("TSAs"), individual retirement annuities or accounts
("IRAs"), or any other qualified contract that is eligible to "rollover" into
an IRA. We differentiate among non-qualified contracts, TSAs, IRAs and other
Qualified Contracts to the extent necessary to comply with federal tax laws.
For example, we restrict the assignment, transfer or pledge of TSAs and IRAs
so the contracts will continue to qualify for special tax treatment. If you
are contemplating any such exchange, rollover or transfer of a contract, you
should contact a competent tax adviser with respect to the potential effects
of such a transaction.
PREMIUM TAXES
Applicable premium tax rates depend on your state of residency and the
insurance laws and status of Glenbrook Life in those states where premium
taxes are incurred. Premium tax rates may be changed by legislation,
administrative interpretations or judicial acts.
TAX RESERVES
We do not establish capital gains tax reserves for the Subaccount or
deduct charges for tax reserves because we believe that capital gains
attributable to the Variable Account will not be taxable. However, we reserve
the right to deduct charges to establish tax reserves for potential taxes on
realized or unrealized capital gains.
4
<PAGE>
INCOME PAYMENTS
CALCULATION OF VARIABLE ANNUITY UNIT VALUES
We calculate the amount of the first income payment by applying your
Contract Value allocated to each Subaccount, less any applicable premium tax
charge deducted at this time, to the income payment tables in the Contract.
The first annuity income payment is divided by the Subaccount's then current
annuity unit value (the measure used to determine the number of annuity units
upon which later income payments will be based). Unless transfers are made
among Subaccounts, each variable income payment after the first will equal the
sum of the number of annuity units determined in this manner for each
Subaccount times the then current annuity unit value for each respective
Subaccount.
Annuity units in each Subaccount are valued separately and annuity unit
values will depend upon the investment experience of the particular Fund in
which the Subaccount invests. The value of the annuity unit for each
Subaccount at the end of any Valuation Period is calculated by:
* MULTIPLYING the annuity unit value at the end of the immediately
preceding Valuation Period by the Subaccount's Net Investment
Factor during the period; and then
* DIVIDING the product by the sum of 1.0 plus the assumed investment
rate for the period. The assumed investment rate adjusts for the
interest rate assumed in the Income Payment tables used to
determine the dollar amount of the first variable annuity income
payment, and is at an effective annual rate which is disclosed in
the Contract.
We determine the amount of the first annuity income payment paid under
an Income Plan using the interest rate and mortality table disclosed in the
Contract. Different annuity tables may be used, as appropriate, taking into
account judicial or legislative developments regarding the use of tables that
do not differentiate on the basis of sex.
GENERAL MATTERS
INCONTESTABILITY
We will not contest the Contract after it is issued.
SETTLEMENTS
Due proof of the death of the Owner(s) (or the Annuitant's death if
there is a nonnatural Owner) must be received before settlement of a death
claim.
SAFEKEEPING OF VARIABLE ACCOUNT ASSETS
We hold title to the assets of the Variable Account. The assets are kept
physically segregated, held separate and apart from our general corporate
5
<PAGE>
assets. Records are maintained of all purchases and redemptions of the
portfolio shares held by each of the Subaccounts.
The Funds do not issue certificates. We hold the Variable Account assets
in open account in lieu of stock certificates. Each Fund prospectus provides a
more detailed description of the custodian of that Fund.
SAFEKEEPING OF VARIABLE ACCOUNT RECORDS
All accounts, books, records and other documents which are required to
be maintained for the Variable Account are maintained by Glenbrook Life.
FEDERAL TAX MATTERS
INTRODUCTION
THE FOLLOWING DISCUSSION IS GENERAL AND IS NOT INTENDED AS TAX ADVICE.
GLENBROOK LIFE MAKES NO GUARANTEE REGARDING THE TAX TREATMENT OF ANY CONTRACT
OR TRANSACTION INVOLVING A CONTRACT. Federal, state, local and other tax
consequences of ownership or receipt of distributions under an annuity
contract depend on the individual circumstances of each person. If you are
concerned about any tax consequences with regard to your individual
circumstances, you should consult a competent tax adviser.
TAXATION OF GLENBROOK LIFE AND ANNUITY COMPANY
We are taxed as a life insurance company under Part I of Subchapter L of
the Internal Revenue Code. The Variable Account is not an entity separate from
Glenbrook Life; its operations form a part of Glenbrook Life. Consequently,
the Variable Account is not taxed separately as a "Regulated Investment
Company" under Subchapter M of the Internal Revenue Code.
Investment income and realized capital gains of the Variable Account are
applied automatically to increase reserves under the Contract. Glenbrook Life
believes that, under existing federal income tax law, the Variable Account
investment income and capital gains will not be taxed to the extent that such
income and gains are applied to increase the reserves under the Contract.
Generally, reserves are amounts that Glenbrook Life is required, by law, to
accumulate and maintain in order to meet future obligations under the
Contracts.
Glenbrook Life does not anticipate that it will incur any federal income
tax liability attributable to the Variable Account. Therefore we do not intend
to make provisions for any such taxes. If we are taxed on investment income or
capital gains of the Variable Account, then we may impose a charge against the
Variable Account in order to make provision for such taxes.
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EXCEPTIONS TO THE NONNATURAL OWNER RULE
Generally, contracts held by a nonnatural owner are not treated as
annuity contracts for federal income tax purposes, unless one of several
exceptions applies. Contracts generally will be treated as held by a natural
person if the nominal owner is a trust or other entity that holds the contract
for the benefit of a natural person. However, this special exception will not
apply in the case of an employer who is the nominal owner of a contract under
a non-qualified deferred compensation arrangement for employees. Other
exceptions to the nonnatural owner rule are:
* contracts acquired by an estate of a decedent by reason of the
death of the decedent;
* certain Qualified Contracts;
* contracts purchased by employers upon the termination of certain
qualified plans;
* certain contracts used in connection with structured settlement
agreements, and
* contracts purchased with a single premium when the annuity
starting date is no later than a year from purchase of the annuity
and substantially equal periodic payments are made, not less
frequently than annually, during the annuity period.
IRS REQUIRED DISTRIBUTION AT DEATH RULES
To qualify as an annuity contract for federal income tax purposes, a
nonqualifed contract must provide:
* if any contract owner dies on or after the annuity start date, but
before the entire interest in the contract has been distributed,
the remaining portion of such interest must be distributed at
least as rapidly as under the method of distribution being used as
of the date of that owner's death;
* if any contract owner dies before the annuity start date, the
entire interest in the contract will be distributed within five
years after the date of that owner's death.
The five year requirement is satisfied if:
* any portion of the contract owner's interest which is payable to a
designated beneficiary is distributed over the life of such
beneficiary (or over a period not extending beyond the life
expectancy of the beneficiary), and
* the distributions begin within one year of the contract owner's
death.
If the designated beneficiary of the contract is the contract owner's
surviving spouse, the contract may be continued with the surviving spouse as
the new contract owner. If the contract owner is a nonnatural person, the
Annuitant is treated as the contract owner for purposes of applying the
distribution at death rules. In addition, a change in the Annuitant on a
contract owned by a nonnatural person will be treated as the death of the
contract owner.
QUALIFIED PLANS
This Contract may be used with several types of qualified plans.
Glenbrook Life reserves the right to limit the availability of the Contract
for use with any of the qualified plans listed below. The tax rules applicable
7
<PAGE>
to participants in such qualified plans vary according to the type of plan and
the terms and conditions of the plan. Qualified plan participants, and owners,
annuitants and beneficiaries under the Contract, may be subject to the terms
and conditions of the qualifed plan, regardless of the terms of the Contract.
TYPES OF QUALIFIED PLANS
IRAS
Section 408 of the Internal Revenue Code permits eligible individuals to
contribute to an individual retirement program known as an IRA. IRAs are
subject to limitations on the amount that can be contributed and on the time
when distributions may commence. Certain distributions from other types of
qualified plans may be "rolled over" on a tax-deferred basis into an IRA. An
IRA generally may not provide life insurance, but it may provide a death
benefit that equals the greater of the premiums paid or the contract value.
The contract provides a death benefit that in certain circumstances may exceed
the greater of the purchase payments or the contract value. If the IRS treats
the death benefit as violating the prohibition on investment in life insurance
contracts, the contract would not qualify as an IRA.
ROTH IRAS
Section 408A of the Internal Revenue Code permits eligible individuals
to make nondeductible contributions to an individual retirement program known
as a Roth IRA. Roth IRAs are subject to limitations on the amount that can be
contributed. In certain instances, distributions from Roth IRAs are excluded
from gross income. Subject to certain limits, a traditional IRA may be
converted or "rolled over" to a Roth IRA. The taxable portion of a conversion
or rollover distribution is included in gross income, but is exempted from the
10% penalty tax on premature distributions.
SIMPLIFIED EMPLOYEE PENSION PLANS
Section 408(k) of the Internal Revenue Code allows employers to
establish simplified employee pension plans for their employees, if certain
criteria are met. Under these plans the employer may, within limits, make
deductible contributions on behalf of the employees to their individual
retirement annuities. Employers intending to use the Contract in connection
with such plans should seek competent advice.
8
<PAGE>
SAVINGS INCENTIVE MATCH PLANS FOR EMPLOYEES (SIMPLE PLANS)
Sections 408(p) and 401(k) of the Internal Revenue Code allow employers
with 100 or fewer employees to establish SIMPLE retirement plans for their
employees. SIMPLE plans may be structured as a SIMPLE retirement account using
an employee's IRA to hold the assets, or as a Section 401(k) qualified cash or
deferred arrangement. In general, a SIMPLE plan consists of a salary deferral
program for eligible employees, and matching or nonelective contributions made
by employers. Employers intending to use the Contract in conjunction with
SIMPLE plans should seek competent tax and legal advice.
TAX SHELTERED ANNUITIES
Section 403(b) of the Internal Revenue Code permits public school
systems and certain types of tax-exempt organizations (specified in Section
501(c)(3) of the Internal Revenue Code) to purchase contracts for their
employees. Subject to certain limitations, a Section 403(b) plan permits an
employer to exclude the purchase payments from an employee's gross income. A
contract used for a Section 403(b) plan must provide that distributions
attributable to salary reduction contributions made after December 31, 1988,
and all earnings on salary reduction contributions, may be made only:
* on or after the date the employee--attains age 59 1/2, separates
from service, dies, becomes disabled; or
* on account of hardship.
(Distributions attributable to salary reduction contributions made after
December 31, 1988, may be made; distributions attributable to EARNINGS on such
salary reduction contributions may not.) These limitations would not apply to
withdrawals occurring when Glenbrook Life is directed to transfer some or all
of the Contract Value to another 403(b) plan.
CORPORATE AND SELF-EMPLOYED PENSION AND PROFIT SHARING PLANS
Sections 401(a) and 403(a) of the Internal Revenue Code permit corporate
employers to establish various types of tax favored retirement plans for
employees. The Internal Revenue Code permits self-employed individuals to
establish tax favored retirement plans for themselves and their employees.
Such retirement plans may permit the purchase of contracts to provide benefits
under the plans.
STATE AND LOCAL GOVERNMENT AND TAX-EXEMPT ORGANIZATION DEFERRED COMPENSATION
PLANS
Section 457 of the Internal Revenue Code permits employees of state and
local governments and tax-exempt organizations to defer a portion of their
compensation without paying current taxes. The employees must be participants
in an eligible deferred compensation plan. Employees with contracts under the
plan are considered general creditors of the employer. The employer, as owner
of the contract, has the sole right to the proceeds of the contract.
Generally, under the nonnatural owner rules, such contracts are not treated as
annuity contracts for federal income tax purposes. Under these plans,
contributions made for the benefit of an employee will not be included in that
9
<PAGE>
employee's gross income until distributed from the plan. However, all the
compensation deferred under a 457 plan must remain the sole property of the
employer. As property of the employer, the assets of the plan are subject to
the claims of the employer's general creditors, until such time as the assets
are made available to the employee or a beneficiary.
UNDERWRITERS
The Contracts are distributed through the principal underwriter for the
Variable Account, Allstate Life Financial Services, Inc. ("ALFS"), an
affiliate of Glenbrook Life and Annuity Company. We may pay ALFS a commission
for distribution of the Contracts. The underwriting agreement with ALFS
provides that we will reimburse ALFS for expenses incurred in distributing the
Contracts, including any liability to Owners arising out of services rendered
or Contracts issued.
The offering of the Contracts is continuous and we do not anticipate
discontinuing the offering of the Contracts. However, we reserve the right to
discontinue the offering of the Contracts.
LEGAL MATTERS
Porter, Wright, Morris & Arthur LLP of Washington, D.C. has provided
advice on certain legal matters relating to the federal securities laws. All
matters of Arizona and Illinois law pertaining to the Contracts, including the
validity of the Contract and Glenbrook's authority to issue the Contract under
Arizona Insurance Law, have been passed upon by Michael J. Velotta, General
Counsel of Glenbrook Life and Annuity Company.
EXPERTS
The financial statements of Glenbrook life and annuity Company included in
this Statement of Additional Information (which is incorporated by reference in
the prospectus of Glenbrook Life Discover Variable Annuity Account A of
Glenbrook Life and annuity Company) have been audited by Deloitte & Touche, LLP,
180 N. Stetson Avenue, Chicago, Illinois 60601-6701, independent auditors, as
stated in their report appearing herein, and are included in reliance upon the
report of such firm given upon their authority as experts in accounting and
auditing.
10
<PAGE>
FINANCIAL STATEMENTS
The financial statements of Glenbrook Life, which are included in this
Statement of Additional Information, should be considered as bearing only on
our ability to meet our obligation under the Contract. They should not be
considered as bearing on the investment performance of the assets held in the
Variable Account.
Because the Subaccounts available under this Contract did not commence
operation before the date of the prospectus for the Contract, financial
information about the Subaccounts is not included in that prospectus or in
this SAI.
<PAGE>
PART C
OTHER INFORMATION
ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS.
Financial Statements
All required financial statements are included in Part B of this registration
statement.
Exhibits
(1) Resolution of the Board of Directors of Glenbrook Life and Annuity
Company authorizing establishment of the Glenbrook Life Discover Variable
Account (A).
(2) Not Applicable.
(3) Form of Underwriting Agreement. 1/
(4) Form of Discover Variable Annuity Contract.
(5) Form of Discover Variable Annuity Contract Application.
(6) (a)(i) Articles of Incorporation of Glenbrook Life and Annuity Company.2/
(ii) Amended and Restated Articles of Incorporation and Articles of
Redomestication of Glenbrook Life and Annuity Company.3/
(b)(i) Bylaws of Glenbrook Life and Annuity Company.2/
(ii) Amended and Restated Bylaws of Glenbrook Life and Annuity
Company.3/
(7) Form of Reinsurance Agreement between Glenbrook Life and Annuity Company
and Allstate Life Insurance Company.4/
(8) Form of Participation Agreement.5/
(9) Opinion and Consent of Michael J. Velotta, Vice President, Secretary and
General Counsel of Glenbrook Life and Annuity Company.5/
(10) (a) Consent of Porter, Wright, Morris and Arthur, LLP.5/
(b) Consent of Deloitte & Touche, LLP 5/
(11) Not Applicable.
(12) Not Applicable.
(13) Computation of Performance Quotations. 5/
(14) Not Applicable.
(15) Powers of Attorney.
1/ Incorporated herein by reference to Depositor's Form N-4 registration
statement filed with the SEC via EDGARLINK on July 31, 1998 (File No.
333-60337).
2/ Incorporated herein by reference to depositor's Form S-1 registration
statement filed with the SEC via EDGARLINK on June 28, 1996 (File No.
333-07275).
3/ Incorporated herein by reference to Depositor's Form 10-K filed with the SEC
via EDGARLINK on March 31, 1999.
4/ Incorporated herein by reference to depositor's pre-effective amendment No. 1
to Form N-4 registration statement filed with the SEC via EDGARLINK on November
22, 1995 (File No. 033-62203).
5/ To be filed by subsequent pre-effective amendment.
25. DIRECTORS AND OFFICERS OF THE DEPOSITOR
<TABLE>
<CAPTION>
<S> <C> <C>
NAME AND PRINCIPAL
BUSINESS ADDRESS POSITIONS AND OFFICES WITH
DEPOSITOR
Louis G. Lower, II Chairman of the Board and Chief
Executive Officer
Michael J. Velotta Vice President, Secretary,
General Counsel and Director
Brent H. Hamann Director
John R. Hunter Director
Thomas J. Wilson, II Director and Vice Chairman
Marla G. Friedman Vice President
Kevin R. Slawin Vice President and Director
G. Craig Whitehead Assistant Vice President and
Director
Timothy N. Vander Pas Assistant Vice President and
Director
A. Sales Miller Vice President, Operations
James P. Zils Treasurer
Casey J. Sylla Chief Investment Officer
Sarah R. Donahue Assistant Vice President and
Director
Emma M. Kalaidjian Assistant Secretary
Paul N. Kierig Assistant Secretary
Mary J. McGinn Assistant Secretary
Samuel H. Pilch Controller
Barry S. Paul Assistant Vice President
Robert N. Roeters Assistant Vice President
C. Nelson Strom Assistant Vice President and
Corporate Actuary
Kathleen Urbanowicz Assistant Vice President,
Operations
Brenda D. Sneed Assistant Secretary and Assistant
General Counsel
Nancy M. Bufalino Assistant Treasurer
Patricia W. Wilson Assistant Treasurer
Gregory C. Sernett Assistant Secretary
Joanne M. Derrig Assistant Secretary and Chief
Compliance Officer
</TABLE>
The principal business address of the foregoing officers and directors is 3100
Sanders Road, Northbrook, Illinois 60062.
26. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH DEPOSITOR OR REGISTRANT
Incorporated herein by reference to the Form 10-K Report, Commission File
#1-11840, March 31, 1999, The Allstate Corporation.
27. NUMBER OF CONTRACT OWNERS
Not applicable.
28. INDEMNIFICATION
The bylaws of both Glenbrook Life and Annuity Company (Depositor) and Allstate
Life Financial Services, Inc. (Principal Underwriter), provide for the
indemnification of its directors, officers and controlling persons, against
expenses, judgments, fines and amounts paid in settlement as incurred by such
person, if such person acted properly. No indemnification shall be made in
respect of any claim, issue or matter as to which such person shall have been
adjudged to be liable for negligence or misconduct in the performance of a duty
to the Company, unless a court determines such person is entitled to such
indemnity.
Insofar as indemnification for liability arising under the Securities Act of
1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit, or proceeding) is asserted such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
29. RELATIONSHIP OF PRINCIPAL UNDERWRITER TO OTHER INVESTMENT COMPANIES
(a) Allstate Life Financial Services, Inc., currently acts as a principal
underwriter, depositor, sponsor, or investment adviser for the following
entities:
- Allstate Financial Advisors Separate Account I
- Glenbrook Life and Annuity Company Variable Annuity Account
- Glenbrook Life Multi-Manager Variable Account
- Allstate Life of New York Separate Account A
- Glenbrook Life Variable Life Separate Account A
- Glenbrook Life and Annuity Company Separate Account A
- Glenbrook Life AIM Variable Life Separate Account A
- Glenbrook Life Variable Life Separate Account B
- Allstate Life Insurance Company Separate Account A
(b) Following are the names, business addresses, positions, and offices, of each
director, officer, or partner of the principal underwriter:
NAME AND PRINCIPAL
BUSINESS ADDRESS POSITION OR OFFICE
Louis G. Lower, II Director
Kevin R. Slawin Director
Michael J. Velotta Director and Secretary
John R. Hunter President, Chief
Executive Officer and Director
Janet M. Albers Vice President and
Controller
Brent H. Hamann Vice President
Andrea J. Schur Vice President
Terry Young General Counsel and
Assistant Secretary
James P. Zils Treasurer
Lisa A. Burnell Assistant Vice President and
Compliance Officer
Robert N. Roeters Assistant Vice President
Emma M. Kalaidjian Assistant Secretary
Brenda D. Sneed Assistant Secretary
Gregory C. Sernett Assistant Secretary
Nancy M. Bufalino Assistant Treasurer
The principal address of the foregoing officers, directors and partners is 3100
Sanders Road, Northbrook, Illinois 60062.
(c) Underwriter compensation during fiscal year ended December 31, 1998:
<TABLE>
<CAPTION>
(1) (2) (3) (4) (5)
<S> <C> <C> <C> <C>
NET UNDERWRITING
NAME OF PRINCIPAL DISCOUNTS AND
UNDERWRITER COMMISSIONS COMPENSATION ON BROKERAGE
REDEMPTION COMMISSION COMPENSATION
Allstate Life _______ None None None
Financial Services, Inc.
</TABLE>
30. LOCATION OF ACCOUNTS AND RECORDS
The depositor, Glenbrook Life and Annuity Company, is located at 3100 Sanders
Road, Northbrook, Illinois 60062.
The principal underwriter, Allstate Life Financial Services, Inc., is located at
3100 Sanders Road, Northbrook, Illinois 60062.
Each company maintains physical possession of each account, book, or other
document required to be maintained by Section 31(a) of the 1940 Act and the
Rules under it.
31. MANAGEMENT SERVICES
None.
32. UNDERTAKINGS
The registrant promises to file a post-effective amendment to this registration
statement as frequently as is necessary to ensure that the audited financial
statements in the registration statement are never more than 16 months old for
so long as payments under the variable annuity contracts may be accepted.
Registrant furthermore agrees to include either as part of any application to
purchase a contract offered by the prospectus, a space that an applicant can
check to request a statement of additional information or a post card or similar
written communication affixed to or included in the prospectus that the
applicant can remove to send for a statement of additional information. Finally,
the registrant agrees to deliver any statement of additional information and any
financial statements required to be made available under this Form N-4 promptly
upon written or oral request.
Representations Pursuant to Section 403(b) of the Internal Revenue Code
The depositor, Glenbrook Life and Annuity Company ("Glenbrook Life"), represents
that it is relying upon a November 28, 1988 Securities and Exchange Commission
no-action letter issued to the American Council of Life Insurance ("ACLI") and
that the provisions of paragraphs 1-4 of the no-action letter have been complied
with.
Representations Regarding Contract Expense
The depositor, Glenbrook Life, represents that the fees and charges deducted
under the individual and group flexible premium deferred variable annuity
contracts hereby registered by this registration statement, in the aggregate,
are reasonable in relation to the services rendered, the expenses expected to be
incurred, and the risks assumed by Glenbrook Life.
<PAGE>
SIGNATURES
As required by the Securities Act of 1933 and the Investment Company Act of
1940, the Registrant, Glenbrook Life Discover Variable Account (A), certifies
that it has duly caused this registration statement to be signed on its behalf,
in the Township of Northfield, and the State of Illinois, on this 11th day of
October, 1999.
GLENBROOK LIFE DISCOVER VARIABLE ACCOUNT (A)
(REGISTRANT)
BY: GLENBROOK LIFE AND ANNUITY COMPANY
(DEPOSITOR)
(SEAL)
Attest: /s/JOANNE M. DERRIG By: /s/MICHAEL J. VELOTTA
------------------- ---------------------
Joanne M. Derrig Michael J. Velotta
Assistant Secretary Vice President, Secretary
and General Counsel
Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940, this registration statement has been duly signed below by
the following directors and officers of Glenbrook Life and Annuity Company on
the 11th day of October, 1999.
<TABLE>
<CAPTION>
<S> <C>
* LOUIS G. LOWER, II Chairman of the Board of Directors and Chief
- -------------------- Executive Officer
Louis G. Lower, II (Principal Executive Officer)
/s/ MICHAEL J. VELOTTA Vice President, Secretary, General Counsel
- ---------------------- and Director
Michael J. Velotta
* JOHN R. HUNTER Director
- ----------------
John R. Hunter
* BRENT H. HAMANN Director
- -----------------
Brent H. Hamann
* TIMOTHY N. VANDER PAS Director
- -----------------------
Timothy N. Vander Pas
* THOMAS J. WILSON III Vice Chairman and Director
- ----------------------
Thomas J. Wilson III
* KEVIN R. SLAWIN Vice President and Director
- ----------------- (Principal Financial Officer)
Kevin R. Slawin
* SARAH R. DONAHUE Assistant Vice President and Director
- ------------------
Sarah R. Donahue
* G. CRAIG WHITEHEAD Assistant Vice President and Director
- --------------------
G. Craig Whitehead
<PAGE>
* JAMES P. ZILS Treasurer
- ---------------
James P. Zils
* CASEY J. SYLLA Chief Investment Officer
- ----------------
Casey J. Sylla
*SAMUEL H. PILCH Controller
- ---------------- (Principal Accounting Officer)
Samuel H. Pilch
* By: /s/ Michael J. Velotta, pursuant to Power of Attorney previously filed and
filed herewith.
</TABLE>
<PAGE>
Exhibit Index
Exhibit 1 Resolution of The Board of Directors of Glenbrook Life
and Annuity Company authorizing establishment of the
Glenbrook Life Discover Variable Account A.
Exhibit 4 Form of Discover Variable Annuity Contract.
Exhibit 5 Form of Discover Variable Annuity Contract Application.
Exhibit 15 Powers of Attorney.
Glenbrook Life Discover Variable Account A
RESOLVED, that the Corporation, pursuant to the provisions of
Section 20-651 of the Arizona Insurance Laws, hereby establishes a separate
account designated Glenbrook Life Discover Variable Account A. (hereafter the
"Separate Account") for the following use and purposes, and subject to such
conditions as hereinafter set forth.
FURTHER RESOLVED, that the Separate Account shall be
established for the purpose of providing for the issuance by the Corporation of
such variable annuity or such other contracts ("Contracts") as the President or
designated representative may designate for such purpose and shall constitute a
separate account into which are allocated amounts paid to or held by the
Corporation under such Contracts.
FURTHER RESOLVED, that the income, gains and losses, whether
or not realized, from assets allocated to the Separate Account shall, in
accordance with the Contracts, be credited to or charged against such account
without regard to other income, gains, or losses of the Corporation.
FURTHER RESOLVED, that the fundamental investment policy of
the Separate Account shall be to invest or reinvest the assets of the Separate
Account in securities issued by an investment company or investment companies
registered under the Investment Company Act of 1940, as amended, as the
President or designated representative may designate pursuant to the provisions
of the Contracts.
FURTHER RESOLVED, that multiple subaccount divisions be, and
hereby are, established within the Separate Account to which net payments under
the Contracts will be allocated in accordance with instructions received from
contractholders, and that the President or designated representative be, and
hereby is, authorized to increase or decrease the number of investment divisions
in the Separate Account as deemed necessary or appropriate.
FURTHER RESOLVED, that the President and Treasurer be, and
they hereby are, authorized to deposit such amount in the Separate Account or in
each investment division thereof as may be necessary or appropriate to
facilitate the commencement of the Separate Account's operations.
FURTHER RESOLVED, that the President of the Corporation or
designated representative be, and hereby is, authorized to change the
designation of the Separate Account to such other designation as the President
or designated representative may deem necessary or appropriate.
FURTHER RESOLVED, that the appropriate officers of the
Corporation, with such assistance from the Corporation's auditors, legal counsel
and independent consultants or others as they may require, be, and they hereby
are, authorized and directed to take all action necessary to: (a) register the
Separate Account as a unit investment trust under the Investment Company Act of
1940, as amended; (b) register the Contracts in such amounts, which may be an
indefinite amount, as the officers of the Corporation shall from time to time
deem appropriate under the Securities Act of 1933; and (c) take all other
actions which are necessary in connection with the offering of said Contracts
for sale and the operation of the Separate Account in order to comply with the
Investment Company Act of 1940, the Securities Exchange Act of 1934, the
Securities Act of 1933, and other applicable federal laws, including the filing
of any amendments to registration statements, any undertakings, and any
applications for exemptions from the Investment Company Act of 1940 or other
applicable federal laws as the officers of the Corporation shall deem necessary
or appropriate.
FURTHER RESOLVED, that the President and the General Counsel,
and either of them with full power to act without the other, hereby are
authorized and empowered to prepare, execute and cause to be filed with the
Securities and Exchange Commission on behalf of the Separate Account and by the
Corporation as sponsor and depositor, a Form of Notification of Registration on
Form N-8A, a Registration Statement registering the Separate Account as an
investment company under the Investment Company Act of 1940, and a Registration
Statement under the Securities Act of 1933.
FURTHER RESOLVED, that the appropriate officers of the
Corporation be, and they hereby are, authorized on behalf of the Separate
Account and on behalf of the Corporation to take any and all action that they
may deem necessary or advisable in order to sell the Contracts, including any
registrations, filings and qualifications of the Corporation, its officers,
agents and employees, and the Contracts under the insurance and securities laws
of any of the states of the United States of America or other jurisdictions, and
in connection therewith, to prepare, execute, deliver and file all such
applications, reports, covenants, resolutions, applications for exemptions,
consents to service of process and other papers and instruments as may be
required under such laws, and to take any and all further action which said
officers of the Corporation may deem necessary or desirable (including entering
into whatever agreements and contracts may be necessary) in order to maintain
such registrations or qualifications for as long as said officers deem them to
be in the best interests of the Separate Account and the Corporation.
FURTHER RESOLVED, that the General Counsel for the Corporation
or designated representative be, and hereby is, authorized in the names and on
behalf of the Separate Account and the Corporation to execute and file
irrevocable written consents on the part of the Separate Account and of the
Corporation to be used in such states wherein such consents to service of
process may be requisite under the insurance or securities laws therein in
connection with said registration or qualification of Contracts and to appoint
the appropriate state official, or such other person as may be allowed by said
insurance or securities laws, agent of the Separate Account and of the
Corporation for the purpose of receiving and accepting process.
FURTHER RESOLVED, that the President of the Corporation or
designated representative be, and hereby is, authorized to establish criteria by
which the Corporation shall institute procedures to provide for a pass-through
of voting rights to the owners of such Contracts as required by the applicable
laws with respect to securities owned by the Separate Account.
FURTHER RESOLVED, that the President of the Corporation or
designated representative is hereby authorized to execute such agreement or
agreements on such terms and subject to such modifications as deemed necessary
or appropriate (i) with a qualified entity that will be appointed principal
underwriter and distributor for the Contracts and (ii) with one or more
qualified banks or other qualified entities to provide administrative and/or
custodial services in connection with the establishment and maintenance of the
Separate Account and the design, issuance, and administration of the Contracts.
FURTHER RESOLVED, that since it is expected that the Separate
Account will invest in the securities issued by one or more investment
companies, the appropriate officers of the Corporation are hereby authorized to
execute whatever agreement or agreements as may be necessary or appropriate to
enable such investments to be made.
FURTHER RESOLVED, that the appropriate officers of the Corporation, and each of
them, are hereby authorized to execute and deliver all such documents and papers
and to do or cause to be done all such acts and things as they may deem
necessary or desirable to carry out the foregoing resolutions and the intent and
purposes thereof.
Glenbrook Life
and Annuity Company
A Stock Company
Headquarters: 3100 Sanders Road, Northbrook, Illinois 60062
Discover Variable Annuity, a Flexible Premium Deferred Variable Annuity
This Certificate is issued to customers of participating financial services
corporations according to the terms of Master Policy number 64900050 issued by
Glenbrook Life and Annuity Company to the Trustee of the Financial Services
Group Insurance Trust. The Trustee of the Financial Services Group Insurance
Trust is called the Master Policyholder. This Certificate is issued in the state
of Illinois and is governed by Illinois law.
We Will Make Periodic Income Payments Subject to the
Provisions of This Certificate Beginning on the Payout
Start Date Specified on the Annuity Data Page.
Death Benefits Are Provided Before the Payout Start Date.
Income Payment Amounts Are Not Guaranteed as to Dollar Amounts
Before the Payout Start Date.
Nonparticipating
This Is a Legal Certificate Between You and Glenbrook Life and Annuity Company
Insurance Company.
Please Read Your Certificate Carefully.
Return Privilege
Upon written request, we will provide you with factual information regarding the
benefits and provisions contained in this Contract. If you are not satisfied
with this Certificate for any reason, you may return it to us within 20 days
after you receive it. We will refund any purchase payments allocated to the
Variable Account, adjusted to reflect investment gain or loss from the date of
allocation to the date of cancellation, plus any purchase payments allocated to
the Fixed Account(s). If this Certificate is qualified under Section 408 of the
Internal Revenue Code, we will refund the greater of any purchase payments or
the Certificate Value.
The Certificate Value or Income Payments May Increase or
Decrease Based on the Investment Experience of the
Selected Sub-accounts of the Variable Account.
If you have any questions about your Discover Variable Annuity, please contact
Glenbrook Life and Annuity Company at (800) 242-4402.
- ---------------------------------------------------------------------------
[GRAPHIC OMITTED]
- ---------------------------------------------------------------------------
- ---------------------------------------------------------------------------
[GRAPHIC OMITTED]
- ---------------------------------------------------------------------------
Secretary Chairman and Chief Executive Officer
GLA89 Page 1
<PAGE>
- ----------------------------------------------------------------------------
TABLE OF CONTENTS
- ----------------------------------------------------------------------------
INDEX........................................................................3
CERTIFICATE SUMMARY..........................................................4
DEFINITIONS..................................................................5
THE PERSONS INVOLVED.........................................................7
ACCUMULATION PHASE...........................................................8
PAYMENTS ON DEATH...........................................................11
PAYOUT PHASE................................................................12
INCOME PAYMENT TABLES.......................................................14
GENERAL PROVISIONS..........................................................16
GLA89 Page 2
<PAGE>
- -----------------------------------------------------------------------------
INDEX
- -----------------------------------------------------------------------------
Accounting Procedures........................................................10
Administrative Expense Charge................................................10
Annual Statement.............................................................16
Annuitant.....................................................................8
Annuity Transfers............................................................13
Annuity Unit Value...........................................................13
Beneficiary...................................................................8
Certificate Value............................................................10
Charges......................................................................10
Crediting Interest............................................................9
Death Benefit................................................................12
Death of Owner or Annuitant..................................................11
Deferment of Payments........................................................16
Entire Contract, The.........................................................16
Fixed Amount Income Payments.................................................13
Income Payments..............................................................13
Income Plans.................................................................13
Incontestability.............................................................16
Misstatement of Age or Sex...................................................16
Mortality and Expense Risk Charge............................................11
Net Investment Factor........................................................10
Owner.........................................................................7
Payout Start Date............................................................12
Payout Terms and Conditions..................................................14
Purchase Payments.............................................................8
Settlements..................................................................12
Standard Fixed Account........................................................9
Taxes........................................................................11
Transfers.....................................................................9
Variable Account Modifications...............................................17
Variable Amount Income Payments..............................................13
Withdrawal...................................................................11
GLA89 Page 3
<PAGE>
- -----------------------------------------------------------------------------
CERTIFICATE SUMMARY
- -----------------------------------------------------------------------------
This is a no sales load flexible premium deferred variable annuity. It provides
a Death Benefit if the Owner dies before the Payout Start Date. It also provides
periodic income payments if you are living on the Payout Start Date. The initial
purchase payment is shown on the Annuity Data Page. You may make additional
purchase payments subject to the limitations described in the Purchase Payment
provision.
The Certificate Value will vary according to how you allocate the purchase
payments. Allocations may be made to one or more of the Variable Sub-accounts
and to the Standard Fixed Account. The amount of the Certifictae Value will vary
with the investment performance of the selected Variable Sub-accounts and the
Standard Fixed Account.
You may withdraw part or all of the Certificate Value at any time on or before
the Payout Start Date. Any such withdrawal will cause the amount of periodic
income payments to be reduced.
Above is a brief description of the provisions of this Certificate. The
provisions are fully described on the remaining pages of the Certificate.
GLA89 Page 4
<PAGE>
- -----------------------------------------------------------------------------
DEFINITIONS
- -----------------------------------------------------------------------------
Accumulation Phase The "Accumulation Phase" is the first of two phases of your
Certificate. During this phase, purchase payments are allocated to selected
Investment Alternatives and the Certificate Value accumulates. The Accumulation
Phase begins on the Issue Date of the Certificate stated on the Annuity Data
Page. This phase will continue until the Payout Start Date unless the
Certificate is terminated before that date.
Accumulation Unit An "Accumulation Unit" is a measure of your ownership interest
in a Variable Sub-account before the Payout Start Date.
Accumulation Unit Value The "Accumulation Unit Value" is the value of each
Accumulation Unit which is calculated each Valuation Date. Each Variable
Sub-account has its own Accumulation Unit Value.
Annuitant The "Annuitant" is the person whose life is used to determine the
duration and amount of any income payments. The Annuitant is named on the
Annuity Data Page but may be changed by the Owner.
Beneficiary The "Beneficiary" will become the new Owner as follows. If the sole
surviving Owner dies before the Payout Start Date, the Beneficiary, as the new
Owner, will receive the Death Benefit. If the sole surviving Owner dies after
the Payout Start Date, the Beneficiary, as the new Owner, will receive any
remaining guaranteed income payments. The Beneficiary is named on the Annuity
Data Page, but may be changed by the Owner.
Certificate Value "Certificate Value" is the total value of the amounts in the
Variable Sub-accounts plus the total value in the Standard Fixed Account as of
any Valuation Date on or before the Payout Start Date.
Certificate Year "Certificate Year" is a one year period beginning on the Issue
Date of the Certificate and on each anniversary of the Issue Date.
Death Benefit The "Death Benefit" is the amount we will pay if you, or the
Annuitant if you are not a Natural Person, die before the Payout Start Date. The
amount of the Death Benefit is defined in the Death Benefit provision.
GLA89 Page 5
<PAGE>
Fixed Amount Income Payments "Fixed Amount Income Payments" are income payment
amounts that are fixed for the duration of the Income Plan.
Investment Alternatives The "Investment Alternatives" are the Variable
Sub-accounts and the Standard Fixed Account shown on the enrollment. We may
offer additional Variable Sub-accounts at our discretion. We reserve the right
to limit the availability of the Investment Alternatives.
Income Plan An "Income Plan" is a series of payments on a scheduled basis
beginning on the Payout Start Date. The available Income Plans are described in
the Income Plans provision.
Issue Age "Issue Age" is the age of the Annuitant on the Annuitant's birthday on
or before the Issue Date.
Issue Date The "Issue Date" is the date when coverage under this Certificate
becomes effective. It is also the date used to determine Certificate Years. The
Issue Date is shown on the Annuity Data Page.
Joint Annuitant "Joint Annuitant" is applicable only if a Joint and Survivor
Income Plan is selected. The Joint Annuitant will be named at the time of Income
Plan selection.
Natural Person "Natural Person" is a living individual or trust entity that is
treated as an individual for Federal Income Tax purposes under the Internal
Revenue Code.
Net Investment Factor For each Variable Sub-account, the "Net Investment Factor"
is the proportional change in the Accumulation Unit Value during a Valuation
Period.
Owner The "Owner" is referred to as "you" and "your" in this Certificate. The
Owner is named on the Annuity Data Page, but may be changed.
Payout Phase The "Payout Phase" is the second of the two phases of your
Certificate. During this phase the Certificate Value less any applicable taxes
is applied to the Income Plan you choose and is paid out as provided in the
chosen plan. The Payout Phase begins on the Payout Start Date. It continues
until we make the last payment as provided by the Income Plan chosen.
Payout Start Date The "Payout Start Date" is the date the Certificate Value less
any applicable taxes is applied to an Income Plan. The anticipated Payout Start
Date is shown on the Annuity Data Page. You may change the Payout Start Date by
writing to us at least 30 days before this date.
Valuation Date A "Valuation Date" is any date the New York Stock Exchange is
open for trading except for days in which there is insufficient trading in the
Variable Account's portfolio securities such that the value of accumulation or
annuity units might not be materially affected by changes in the value of the
portfolio securities.
GLA89 Page 6
<PAGE>
Valuation Period A "Valuation Period" is the period that begins on the close of
one Valuation Date and ends on the close of the succeeding Valuation Date.
Variable Account The "Variable Account" for this Certificate is the Glenbrook
Life Variable Account A. This account is a separate investment account to which
we allocate assets contributed under this and certain other certificates and
Certificates. These assets will not be charged with liabilities arising from any
other business we may have.
Variable Sub-accounts The Variable Account is divided into Sub-accounts. Each
"Variable Sub-account" invests solely in the shares of the mutual fund
underlying that Sub-account.
Variable Amount Income Payments "Variable Amount Income Payments" are income
payment amounts that vary based on any Variable Sub-account.
- -----------------------------------------------------------------------------
THE PERSONS INVOLVED
- -----------------------------------------------------------------------------
Owner The person named at the time of enrollment is the Owner of this
Certificate unless subsequently changed. As Owner, you will receive any periodic
income payments, unless you have directed us to pay them to someone else.
You may exercise all rights stated in this Certificate, subject to the rights of
any irrevocable Beneficiary.
You may change the Owner or Beneficiary at any time. You may name a new
Annuitant only upon the death of the current Annuitant. Once we have received a
satisfactory written request for a change of Owner or Beneficiary, the change
will take effect as of the date you signed it. We are not liable for any payment
we make or other action we take before receiving any written request for a
change from you. You may not assign an interest in this Certificate as
collateral or security for a loan.
If the sole surviving Owner dies before the Payout Start Date, the Beneficiary
becomes the new Owner. If the sole surviving Owner dies after the Payout Start
Date, the Beneficiary becomes the new Owner and will receive any subsequent
guaranteed income payments.
If more than one person is designated as Owner:
GLA89 Page 7
<PAGE>
o Owner as used in this Certificate refers to all persons named as Owners,
unless otherwise indicated;
o any request to exercise ownership rights must be signed by all Owners; and
o on the death of any person who is an Owner, the surviving person(s) named
as Owner will continue as Owner.
Annuitant The Annuitant is the person named on the Annuity Data Page. The
Annuitant must be a living individual. If the Annuittant dies before the payout
start date, the new Annuitant will be:
o the youngest Owner, if the Owner(s) are living; otherwise,
o the youngest Beneficiary
Beneficiary The Beneficiary is the person(s) named on the Annuity Data Page, but
may be changed by the Owner, as described above. We will determine the
Beneficiary from the most recent written request we have received from you. If
you do not name a Beneficiary or if the Beneficiary named is no longer living,
the Beneficiary will be:
o your spouse if living; otherwise
o your children equally if living; otherwise
o your estate.
The Beneficiary may become the Owner under the circumstances described in the
Owner provision above.
Natural Person As used in this Certificate, Natural Person means a living
individual or trust entity that is treated as an individual for Federal Income
Tax purposes under the Internal Revenue Code.
- -----------------------------------------------------------------------------
ACCUMULATION PHASE
- -----------------------------------------------------------------------------
Purchase Payments The initial purchase payment is shown on the Annuity Data
Page. You may make subsequent purchase payments during the Accumulation Phase.
The number of purchase payments is unlimited. The minimum amount of additional
purchase payments we will accept is $100.
GLA89 Page 8
<PAGE>
We will invest the purchase payments in the Investment Alternatives you select.
You may allocate any portion of your purchase payment in whole percents from 0%
to 100% to any of the Investment Alternatives. The total allocation must equal
100%.
The allocation of the initial purchase payment is shown on the Annuity Data
Page. Allocation of each subsequent purchase payment will be the same as the
allocation for the most recent purchase payment unless you change the
allocation. You may change the allocation of subsequent purchase payments at any
time, without charge, simply by giving us written notice. Any change will be
effective at the time we receive the notice and will reflect the next computed
price(s).
Standard Fixed Account We reserve the right to offer a Standard Fixed Account at
our discretion. The guarantee periods of the Standard Fixed Account may range
from 1 - 10 years. We reserve the right to offer any of these guarantee periods
at our discretion. Money in the Standard Fixed Account will earn interest for
the guarantee period chosen at the current rate in effect at the time of
allocation or transfer to the Standard Fixed Account. After the guarantee period
expires, a renewal rate will be declared at our discretion. Subsequent renewal
dates will be on anniversaries of the first renewal date.
Crediting Interest We credit interest daily to money allocated to each Standard
Fixed Account at a rate which compounds over one year to the interest rate we
guaranteed when the money was allocated. We will credit interest to the initial
purchase payment from the Issue Date. We will credit interest to subsequent
purchase payments from the date we receive them at a rate declared by us. We
will credit interest to transfers from the date the transfer is made. The
interest rate for each Standard Fixed Account will never be less than 3.0% as
shown on the Annuity Data Page.
Transfers Before the Payout Start Date, you may transfer amounts among
Investment Alternatives. You may make 12 transfers during each Certificate Year
without charge. Each transfer after the 12th transfer in any Certificate Year
may be assessed a $10 transfer fee. All transfers made at the same time will be
treated as one request.
We reserve the right to limit the number of transfers in any Certificate Year or
to refuse any transfer request for an Owner or certain Owners if, in our sole
discretion, we believe that:
o excessive trading by such Owner or Owners or a specific transfer request or
group of transfer requests may have a detrimental effect on Unit Values or
the share prices of the underlying mutual funds or would be to the
disadvantage of other Certificate Owners; or
o we are informed by one or more of the underlying mutual funds that the
purchase or redemption of shares is to be restricted because of excessive
trading or a specific transfer or group of transfers is deemed to have a
detrimental effect on share prices of affected underlying mutual funds.
GLA89 Page 9
<PAGE>
Such restrictions may be applied in any manner which is reasonably designed to
prevent any use of the transfer right which is considered by us to be to the
disadvantage of the other Certificate Owners.
We reserve the right to waive the transfer fees and restrictions contained in
this Certificate.
Certificate Value On the Issue Date of the Certificate, the Certificate Value is
equal to the initial purchase payment. After the Issue Date, the "Certificate
Value" is equal to the sum of:
o the number of Accumulation Units you hold in each Variable Sub-account
multiplied by the Accumulation Unit Value for that Sub-account on the most
recent Valuation Date; plus
o the total value you have in the Standard Fixed Account.
If you withdraw the entire Certificate Value, you may receive an amount less
than the Certificate Value because income tax withholding, and a premium tax
charge may apply.
Accounting Procedures The portion of the Certificate Value attributed to each
Variable Sub-account is maintained in Accumulation Units. Amounts which you
allocate to a Variable Sub-account are used to purchase Accumulation Units in
that Sub-account. Additions or transfers to a Variable Sub-account will increase
the number of Accumulation Units for that Sub-account. Withdrawals or transfers
from a Variable Sub-account will decrease the number of Accumulation Units for
that Sub-account.
An Accumulation Unit Value is determined for each Valuation Date. The
Accumulation Unit Value for each Sub-account at the end of any Valuation Period
is equal to the Accumulation Unit Value at the end of the immediately preceding
Valuation Period times the Sub-account's Net Investment Factor for the Valuation
Period. Each Accumulation Unit Value may go up or down based on the performance
of the mutual fund underlying the Sub-account.
Net Investment Factor For each Variable Sub-account, the "Net Investment Factor"
for a Valuation Period is equal to:
o The sum of:
o the net asset value per share of the mutual fund underlying the
Sub-account determined at the end of the current Valuation Period,
plus
o the per share amount of any dividend or capital gain distributions
made by the mutual fund underlying the Sub-account during the current
Valuation Period.
GLA89 Page 10
<PAGE>
o Divided by the net asset value per share of the mutual fund underlying the
Sub-account determined as of the end of the immediately preceding Valuation
Period.
o The result is reduced by the Administrative Expense Charge and the
Mortality and Expense Risk Charge corresponding to the portion of the
current calendar year that is in the current Valuation Period.
Charges The charges for this Certificate include Administrative Expense Charges,
Mortality and Expense Risk Charges, transfer fees, and taxes.
Administrative Expense Charge The annualized Administrative Expense Charge will
never be greater than 0.10%. (See Net Investment Factor for a description of how
this charge is applied.)
Mortality and Expense Risk Charge The annualized Mortality and Expense Risk
Charge will never be greater than 0.50%. (See Net Investment Factor for a
description of how this charge is applied.)
Our actual mortality and expense experience will not adversely affect the dollar
amount of variable benefits or other contractual payments or values under this
Certificate.
Taxes Any premium tax or income tax withholding relating to this Certificate may
be deducted from purchase payments or the Certificate Value when the tax is
incurred or at a later time.
Withdrawal You have the right to withdraw part or all of your Certificate Value
at any time on or before the Payout Start Date. A withdrawal must be at least
$50. If any withdrawal reduces the Certificate Value to less than $1,000, we
will treat the request as a withdrawal of the entire Certificate Value. If you
withdraw the entire Certificate Value, the Certificate will terminate.
You must specify the Investment Alternative(s) from which you wish to make a
withdrawal. When you make a withdrawal, your Certificate Value will be reduced
by any applicable taxes and the amount paid to you.
We reserve the right to waive the withdrawal restrictions contained in this
Certificate.
- -----------------------------------------------------------------------------
PAYMENTS ON DEATH
- -----------------------------------------------------------------------------
Death of Owner or Annuitant A benefit may be paid to the Owner determined
immediately after the death if, before the Payout Start Date:
o any Owner dies; or
o the Annuitant dies and the Owner is not a Natural Person.
If the Owner eligible to receive a benefit is not a Natural Person, the Owner
may elect to receive the benefit in one or more distributions. Otherwise, if the
Owner is a Natural Person, the Owner may elect to receive a benefit either in
one or more distributions or by periodic payments through an Income Plan.
GLA89 Page 11
<PAGE>
The entire value of the Certificate must be distributed within five (5) years
after the date of death unless an Income Plan is elected or a surviving spouse
continues the Certificate in accordance with the provisions below.
If an Income Plan is elected, payments from the Income Plan must begin within
one year of the date of death and must be payable throughout:
o the life of the Owner; or
o a period not to exceed the life expectancy of the Owner; or
o the life of the Owner with payments guaranteed for a period not to exceed
the life expectancy of the Owner.
If the surviving spouse of the deceased Owner is the new Owner, then the spouse
may elect one of the options listed above or may continue the Certificate in the
Accumulation Phase as if the death had not occurred.
Death Benefit Before the Payout Start Date, the Death Benefit is equal to the
greater of the following Death Benefit alternatives:
o the sum of all purchase payments less any prior withdrawals and premium
taxes; or
o the Certificate Value on the date we determine the Death Benefit.
We will determine the value of the Death Benefit as of the end of the Valuation
Period during which we receive a complete request for payment of the Death
Benefit. A complete request includes due proof of death.
Settlements We may require that this Certificate be returned to us before any
settlement. We must receive due proof of death of the Owner or Annuitant before
settlement of a death claim.
Any full withdrawal or Death Benefit under this Certificate will not be less
than the minimum benefits required by any statute of the state in which the
Certificate is delivered.
- -----------------------------------------------------------------------------
PAYOUT PHASE
- -----------------------------------------------------------------------------
Payout Start Date The anticipated Payout Start Date is shown on the Annuity Data
Page. You may change the Payout Start Date by writing to us at least 30 days
before this date.
GLA89 Page 12
<PAGE>
The Payout Start Date must be on or before the later of:
o the Annuitant's 90th birthday; or
o the 10th anniversary of the Certificate's Issue Date.
Income Plans The Certificate Value on the Payout Start Date, less any applicable
taxes, will be applied to your Income Plan choice from the following list:
1. Life Income with Guaranteed Payments. We will make payments for as long as
the Annuitant lives. If the Annuitant dies before the selected number of
guaranteed payments have been made, we will continue to pay the remainder
of the guaranteed payments.
2. Joint and Survivor Life Income with Guaranteed Payments. We will make
payments for as long as either the Annuitant or Joint Annuitant lives. If
both the Annuitant and the Joint Annuitant die before the selected number
of guaranteed payments have been made, we will continue to pay the
remainder of the guaranteed payments.
3. Guaranteed Number of Payments. We will make payments for a specified number
of months beginning on the Payout Start Date. These payments do not depend
on the Annuitant's life. The number of months guaranteed may be from 60 to
360.
We reserve the right to make available other Income Plans.
Income Payments Income payment amounts may be Variable Amount Income Payments,
Fixed Amount Income Payments, or both. The method of calculating the initial
payment is different for the two types of payments.
Variable Amount Income Payments Variable Amount Income Payments will vary to
reflect the performance of the Variable Account. The portion of the initial
income payment based upon a particular Variable Sub-account is determined by
applying the amount of the Certificate Value in that Sub-account on the Payout
Start Date, less any applicable premium tax, to the appropriate value from the
Income Payment Table. This portion of the initial income payment is divided by
the Annuity Unit Value on the Payout Start Date for that Variable Sub-account to
determine the number of Annuity Units from that Sub-account which will be used
to determine subsequent income payments. Unless transfers are made among
Variable Sub-accounts, each subsequent income payment from that Sub-account will
be that number of Annuity Units times the Annuity Unit Value for the Sub-account
for the Valuation Date on which the income payment is made.
Annuity Unit Value The Annuity Unit Value for each Variable Sub-account at the
end of any Valuation Period is calculated by:
o multiplying the Annuity Unit Value at the end of the immediately preceding
Valuation Period by the Sub-account's Net Investment Factor during the
period; and then
GLA89 Page 13
<PAGE>
o dividing the result by 1.000 plus the assumed investment rate for the
period. The assumed investment rate is an effective annual rate of 3%. We
reserve the right to offer an assumed investment rate greater than 3%.
Fixed Amount Income Payments The income payment amount derived from any money
allocated to the Fixed Account Options during the Accumulation Phase is fixed
for the duration of the Income Plan. The Fixed Amount Income Payment is
calculated by applying the portion of the Certificate Value in the Fixed Account
Options on the Payout Start Date, less any applicable premium tax, to the
greater of the appropriate value from the Income Payment Table selected or such
other value as we are offering at that time.
Annuity Transfers After the Payout Start Date, no transfers may be made from the
Fixed Amount Income Payment. Transfers between Variable Sub-accounts, or from
the Variable Amount Income Payment to the Fixed Amount Income Payment, may not
be made for six months after the Payout Start Date. Transfers may be made once
every six months thereafter.
Payout Terms and Conditions The income payments are subject to the following
terms and conditions:
o If the Certificate Value is less than $2,000, or not enough to provide an
initial payment of at least $20, we reserve the right to:
o change the payment frequency to make the payment at least $20; or
o terminate the Certificate and pay you the Certificate Value, less any
applicable taxes, in a lump sum.
o If we do not receive a written choice of an Income Plan from you at least
30 days before the Payout Start Date, the Income Plan will be Life Income
with Guaranteed Payments for 120 months.
o If you choose an Income Plan which depends on any person's life, we may
require:
o proof of age and sex before income payments begin; and
o proof that the Annuitant or Joint Annuitant is still alive before we
make each payment.
o After the Payout Start Date, the Income Plan cannot be changed and
withdrawals cannot be made unless income payments are being made from the
Variable Account under Income Plan 3. You may terminate the income payments
being made from the Variable Account under Income Plan 3 at any time and
withdraw their value.
GLA89 Page 14
<PAGE>
o If any Owner dies during the Payout Phase, the remaining income payments
will be paid to the successor Owner as scheduled.
- -----------------------------------------------------------------------------
INCOME PAYMENT TABLES
- -----------------------------------------------------------------------------
The initial income payment will be at least the amount based on the adjusted age
of the Annuitant(s) and the tables below, less any federal income taxes which
are withheld. The adjusted age is the actual age on the Payout Start Date
reduced by one year for each six full years between January 1, 1983 and the
Payout Start Date. Income payments for ages and guaranteed payment periods not
shown below will be determined on a basis consistent with that used to determine
those that are shown. The Income Payment Tables are based on 3.0% interest and
the 1983a Annuity Mortality Tables.
Income Plan 1 - Life Income with Guaranteed Payments for 120 Months
<TABLE>
<CAPTION>
============================================================================================================================
Monthly Income Payment for each $1,000 Applied to this Income Plan
============================================================================================================================
- ------------------- ---------------------- ---------------- ---------------------- ---------------- ========================
Annuitant's Adjusted Annuitant's Annuitant's
Age Male Female Adjusted Age Male Female Adjusted Age Male Female
- ------------------- ---------------------- ---------------- ---------------------- ---------------- ========================
- ------------------- ---------------------- ---------------- ---------------------- ---------------- ========================
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
35 $3.43 $3.25 49 $4.15 $3.82 63 $5.52 $4.97
36 3.47 3.28 50 4.22 3.88 64 5.66 5.09
37 3.51 3.31 51 4.29 3.94 65 5.80 5.22
38 3.55 3.34 52 4.37 4.01 66 5.95 5.35
39 3.60 3.38 53 4.45 4.07 67 6.11 5.49
40 3.64 3.41 54 4.53 4.14 68 6.27 5.64
41 3.69 3.45 55 4.62 4.22 69 6.44 5.80
42 3.74 3.49 56 4.71 4.29 70 6.61 5.96
43 3.79 3.53 57 4.81 4.38 71 6.78 6.13
44 3.84 3.58 58 4.92 4.46 72 6.96 6.31
45 3.90 3.62 59 5.02 4.55 73 7.13 6.50
46 3.96 3.67 60 5.14 4.65 74 7.31 6.69
47 4.02 3.72 61 5.26 4.75 75 7.49 6.88
48 4.08 3.77 62 5.39 4.86
- ------------------- ---------------------- ---------------- ---------------------- ---------------- ========================
</TABLE>
<TABLE>
<CAPTION>
Income Plan 2 - Joint and Survivor Life Income with Guaranteed Payments for 120 Months
==============================================================================================================================
Monthly Income Payment for each $1,000 Applied to this Income Plan
==============================================================================================================================
- -------------------- =========================================================================================================
Female Annuitant's Adjusted Age
- -------------------- =========================================================================================================
- -------------------- ---------- ------------ ----------- ---------- ---------- ---------- ---------- --------- ===============
Male
Annuitant's Adjusted 35 40 45 50 55 60 65 70 75
Age
- -------------------- ---------- ------------ ----------- ---------- ---------- ---------- ---------- --------- ===============
- -------------------- ---------- ---------- ---------- ---------- ----------- ---------- ------------ ----------- =============
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
35 $3.09 $3.16 $3.23 $3.28 $3.32 $3.36 $3.39 $3.40 $3.42
40 3.13 3.22 3.31 3.39 3.46 3.51 3.56 3.59 3.61
45 3.17 3.28 3.39 3.50 3.60 3.69 3.76 3.81 3.85
50 3.19 3.32 3.45 3.60 3.74 3.87 3.98 4.07 4.14
55 3.21 3.35 3.51 3.68 3.87 4.06 4.23 4.37 4.48
60 3.23 3.37 3.55 3.75 3.98 4.23 4.47 4.70 4.88
65 3.24 3.39 3.57 3.80 4.07 4.37 4.71 5.04 5.34
70 3.24 3.40 3.59 3.83 4.13 4.48 4.90 5.36 5.81
75 3.25 3.41 3.61 3.86 4.17 4.56 5.04 5.61 6.22
- -------------------- ---------- ---------- ---------- ---------- ----------- ---------- ------------ ----------- =============
</TABLE>
GLA89 Page 15
<PAGE>
Income Plan 3 - Guaranteed Number of Payments
- --------------------------------- =============================================
Monthly Income Payment for each
Specified Period $1,000 Applied to this Income Plan
- --------------------------------- =============================================
- --------------------------------- =============================================
10 Years $9.61
11 Years 8.86
12 Years 8.24
13 Years 7.71
14 Years 7.26
15 Years 6.87
16 Years 6.53
17 Years 6.23
18 Years 5.96
19 Years 5.73
20 Years 5.51
- --------------------------------- =============================================
- -----------------------------------------------------------------------------
GENERAL PROVISIONS
- -----------------------------------------------------------------------------
The Entire Contract The entire contract consists of this Certificate, the
Master Policy, the Master Policy application, any written application, and
any Certificate endorsements and riders.
All statements made in a written application are representations and not
warranties. No statement will be used by us in defense of a claim or to
void the Certificate unless it is included in a written application.
We may not modify this Certificate without your consent, except to make it
comply with any changes in the Internal Revenue Code or as required by any
other applicable law. Only our officers may change this Certificate. No
other individual may do this.
Master Policy Amendment or Termination The Master Policy may be amended by
us, terminated by us, or terminated by the Master Policyholder without the
consent of any other person. No termination completed after the issue date
of this Certificate will adversely affect your rights under this
Certificate.
Incontestability We will not contest the validity of this Certificate after
the issue date.
Misstatement of Age or Sex If any age or sex has been misstated, we will
pay the amounts which would have been paid at the correct age and sex.
If we find the misstatement of age or sex after the income payments begin,
we will:
o pay all amounts underpaid including interest calculated at an
effective annual rate of 6%; or
GLA89 Page 16
<PAGE>
o stop payments until the total payments are equal to the corrected
amount.
Annual Statement At least once a year, before the Payout Start Date, we
will send you a statement containing Certificate Value information. We will
provide you with Certificate Value information at any time upon request.
The information presented will comply with any applicable law.
Deferment of Payments We will pay any amounts due from the Variable Account
under this Certificate within seven days, unless:
o the New York Stock Exchange is closed for other than usual weekends or
holidays, or trading on such Exchange is restricted;
o an emergency exists as defined by the Securities and Exchange
Commission; or
o the Securities and Exchange Commission permits delay for the
protection of Certificate holders.
We reserve the right to postpone payments or transfers from the Standard Fixed
Account for up to six months. If we elect to postpone payments or transfers from
the Fixed Account Options for 30 days or more, we will pay interest as required
by applicable law. Any interest would be payable from the date the payment or
transfer request is received by us to the date the payment or transfer is made.
Variable Account Modifications We reserve the right, subject to applicable law,
to make additions to, deletions from, or substitutions for the mutual fund
shares underlying the Variable Sub-accounts. We will not substitute any shares
attributable to your interest in a Variable Sub-account without notice to you
and beforeapproval of the Securities and Exchange Commission, to the extent
required by the Investment Company Act of 1940, as amended.
We reserve the right to establish additional Variable Sub-accounts, each of
which would invest in shares of another mutual fund. You may then instruct us to
allocate purchase payments or transfers to such Sub-accounts, subject to any
terms set by us or the mutual fund.
In the event of any such substitution or change, we may by endorsement make such
changes as may be necessary or appropriate to reflect such substitution or
change.
If we deem it to be in the best interests of persons having voting rights under
the Certificates, the Variable Account may be operated as a management company
under the Investment Company Act of 1940, as amended, or it may be deregistered
under such Act in the event such registration is no longer required.
GLA89 Page 17
DPG89
- ------------------------------------------------------------------------------
ANNUITY DATA
- ------------------------------------------------------------------------------
CERTIFICATE NUMBER:.................................................444444444
ISSUE DATE:........................................................May 1, 1999
INITIAL PURCHASE PAYMENT:...........................................$10,000.00
IRA
INITIAL ALLOCATION OF PURCHASE PAYMENT:
ALLOCATED
AMOUNT (%)
VARIABLE SUB-ACCOUNTS
MSUF Value 20%
Van Kampen LIT Emerging 20%
Dreyfus Capital Appreciation 20%
Scudder International 20%
ANNUALIZED RATE
ALLOCATED GUARANTEED GUARANTEE
AMOUNT (%) INTEREST RATE THROUGH
STANDARD FIXED ACCOUNT
1 Year Guarantee Period 20% 5.00% 05/01/2000
MINIMUM GUARANTEED RATE FOR STANDARD FIXED ACCOUNT :.....................3.00%
PAYOUT START DATE:.................................................May 1, 2054
(Latest date when income payments must begin.)
OWNER:................................................................John Doe
ANNUITANT:............................................................John Doe
AGE AT ISSUE:....................................................35
SEX:.............................................................Male
BENEFICIARY RELATIONSHIP TO OWNER PERCENTAGE
- ----------- --------------------- ----------
Jane Doe Wife 100%
CONTINGENT BENEFICIARY RELATIONSHIP TO OWNER PERCENTAGE
- ---------------------- --------------------- ----------
June Doe Daughter 100%
Power of Attorney
With Respect to the Glenbrook Life and Annuity Company Filing on Form N-4 for
The Glenbrook Life Discover Variable Account (A)
Know all men by these presents that Sarah R. Donahue, whose signature
appears below, constitutes and appoints Louis G. Lower, II, and Michael J.
Velotta, and each of them, her attorney-in-fact, with power of substitution, and
herein any and all capacities, to sign any reports and amendments thereto for
the Form N-4 for Glenbrook Life Discover Variable Account (A) and to file the
same, with exhibits thereto and other documents, in connection therewith, with
the Securities and Exchange Commission, hereby ratifying and confirming all that
each of said attorneys-in-fact, or her substitute or substitutes, may do or
cause to be done by virtue hereof.
Date: October 8, 1999
/s/SARAH R. DONAHUE
- ----------------------------
Sarah R. Donahue
<PAGE>
Power of Attorney
With Respect to the Glenbrook Life and Annuity Company Filing on Form N-4 for
The Glenbrook Life Discover Variable Account (A)
Know all men by these presents that Brent H. Hamann, whose signature
appears below, constitutes and appoints Louis G. Lower, II, and Michael J.
Velotta, and each of them, his attorney-in-fact, with power of substitution, and
herein any and all capacities, to sign any reports and amendments thereto for
the Form N-4 for Glenbrook Life Discover Variable Account (A) and to file the
same, with exhibits thereto and other documents, in connection therewith, with
the Securities and Exchange Commission, hereby ratifying and confirming all that
each of said attorneys-in-fact, or his substitute or substitutes, may do or
cause to be done by virtue hereof.
Date: October 8, 1999
/s/ BRENT H. HAMANN
- ----------------------------
Brent H. Hamann
<PAGE>
Power of Attorney
With Respect to the Glenbrook Life and Annuity Company Filing on Form N-4 for
The Glenbrook Life Discover Variable Account (A)
Know all men by these presents that John R. Hunter whose signature
appears below, constitutes and appoints Louis G. Lower, II, and Michael J.
Velotta, and each of them, his attorney-in-fact, with power of substitution, and
herein any and all capacities, to sign any reports and amendments thereto for
the Form N-4 for Glenbrook Life Discover Variable Account (A) and to file the
same, with exhibits thereto and other documents, in connection therewith, with
the Securities and Exchange Commission, hereby ratifying and confirming all that
each of said attorneys-in-fact, or his substitute or substitutes, may do or
cause to be done by virtue hereof.
Date: October 8, 1999
/s/ JOHN R. HUNTER
- ----------------------------
John R. Hunter
<PAGE>
Power of Attorney
With Respect to the Glenbrook Life and Annuity Company Filing on Form N-4 for
The Glenbrook Life Discover Variable Account (A)
Know all men by these presents that Louis G. Lower, II, whose signature
appears below, constitutes and appoints Michael J. Velotta his attorney-in-fact,
with power of substitution, and herein any and all capacities, to sign any
reports and amendments thereto for the Form N-4 for Glenbrook Life Discover
Variable Account (A) and to file the same, with exhibits thereto and other
documents, in connection therewith, with the Securities and Exchange Commission,
hereby ratifying and confirming all that each of said attorney-in-fact, or his
substitute or substitutes, may do or cause to be done by virtue hereof.
Date: October 8, 1999
/s/ LOUIS G. LOWER, II
- ----------------------------
Louis G. Lower, II
<PAGE>
Power of Attorney
With Respect to the Glenbrook Life and Annuity Company Filing on Form N-4 for
The Glenbrook Life Discover Variable Account (A)
Know all men by these presents that Samuel H. Pilch, whose signature
appears below, constitutes and appoints Louis G. Lower, II, and Michael J.
Velotta, and each of them, his attorney-in-fact, with power of substitution, and
herein any and all capacities, to sign any reports and amendments thereto for
the Form N-4 for Glenbrook Life Discover Variable Account (A) and to file the
same, with exhibits thereto and other documents, in connection therewith, with
the Securities and Exchange Commission, hereby ratifying and confirming all that
each of said attorneys-in-fact, or his substitute or substitutes, may do or
cause to be done by virtue hereof.
Date: October 8, 1999
/s/ SAMUEL H. PILCH
- ----------------------------
Samuel H. Pilch
<PAGE>
Power of Attorney
With Respect to the Glenbrook Life and Annuity Company Filing on Form N-4 for
The Glenbrook Life Discover Variable Account (A)
Know all men by these presents that Kevin R. Slawin, whose signature
appears below, constitutes and appoints Louis G. Lower, II, and Michael J.
Velotta, and each of them, his attorney-in-fact, with power of substitution, and
herein any and all capacities, to sign any reports and amendments thereto for
the Form N-4 for Glenbrook Life Discover Variable Account (A) and to file the
same, with exhibits thereto and other documents, in connection therewith, with
the Securities and Exchange Commission, hereby ratifying and confirming all that
each of said attorneys-in-fact, or his substitute or substitutes, may do or
cause to be done by virtue hereof.
Date: October 8, 1999
/s/ KEVIN R. SLAWIN
- ----------------------------
Kevin R. Slawin
<PAGE>
Power of Attorney
With Respect to the Glenbrook Life and Annuity Company Filing on Form N-4 for
The Glenbrook Life Discover Variable Account (A)
Know all men by these presents that Casey J. Sylla, whose signature
appears below, constitutes and appoints Louis G. Lower, II, and Michael J.
Velotta, and each of them, his attorney-in-fact, with power of substitution, and
herein any and all capacities, to sign any reports and amendments thereto for
the Form N-4 for Glenbrook Life Discover Variable Account (A) and to file the
same, with exhibits thereto and other documents, in connection therewith, with
the Securities and Exchange Commission, hereby ratifying and confirming all that
each of said attorneys-in-fact, or his substitute or substitutes, may do or
cause to be done by virtue hereof.
Date: October 8, 1999
/s/ CASEY J. SYLLA
- ----------------------------
Casey J. Sylla
<PAGE>
Power of Attorney
With Respect to the Glenbrook Life and Annuity Company Filing on Form N-4 for
The Glenbrook Life Discover Variable Account (A)
Know all men by these presents that Timothy N. Vander Pas, whose
signature appears below, constitutes and appoints Louis G. Lower, II, and
Michael J. Velotta, and each of them, his attorney-in-fact, with power of
substitution, and herein any and all capacities, to sign any reports and
amendments thereto for the Form N-4 for Glenbrook Life Discover Variable Account
(A) and to file the same, with exhibits thereto and other documents, in
connection therewith, with the Securities and Exchange Commission, hereby
ratifying and confirming all that each of said attorneys-in-fact, or his
substitute or substitutes, may do or cause to be done by virtue hereof.
Date: October 8, 1999
/s/ TIMOTHY N. VANDER PAS
- ----------------------------
Timothy N. Vander Pas
<PAGE>
Power of Attorney
With Respect to the Glenbrook Life and Annuity Company Filing on Form N-4 for
The Glenbrook Life Discover Variable Account (A)
Know all men by these presents that Michael J. Velotta, whose signature
appears below, constitutes and appoints Louis G. Lower, II, his
attorney-in-fact, with power of substitution, and herein any and all capacities,
to sign any reports and amendments thereto for the Form N-4 for Glenbrook Life
Discover Variable Account (A) and to file the same, with exhibits thereto and
other documents, in connection therewith, with the Securities and Exchange
Commission, hereby ratifying and confirming all that each of said
attorney-in-fact, or his substitute or substitutes, may do or cause to be done
by virtue hereof.
Date: October 8, 1999
/s/ MICHAEL J. VELOTTA
- ----------------------------
Michael J. Velotta
<PAGE>
Power of Attorney
With Respect to the Glenbrook Life and Annuity Company Filing on Form N-4 for
The Glenbrook Life Discover Variable Account (A)
Know all men by these presents that G. Craig Whitehead, whose signature
appears below, constitutes and appoints Louis G. Lower, II, and Michael J.
Velotta, and each of them, his attorney-in-fact, with power of substitution, and
herein any and all capacities, to sign any reports and amendments thereto for
the Form N-4 for Glenbrook Life Discover Variable Account (A) and to file the
same, with exhibits thereto and other documents, in connection therewith, with
the Securities and Exchange Commission, hereby ratifying and confirming all that
each of said attorneys-in-fact, or his substitute or substitutes, may do or
cause to be done by virtue hereof.
Date: October 8, 1999
/s/ G. CRAIG WHITEHEAD
- ----------------------------
G. Craig Whitehead
<PAGE>
Power of Attorney
With Respect to the Glenbrook Life and Annuity Company Filing on Form N-4 for
The Glenbrook Life Discover Variable Account (A)
Know all men by these presents that Thomas J. Wilson, II, whose
signature appears below, constitutes and appoints Louis G. Lower, II, and
Michael J. Velotta, and each of them, his attorney-in-fact, with power of
substitution, and herein any and all capacities, to sign any reports and
amendments thereto for the Form N-4 for Glenbrook Life Discover Variable Account
(A) and to file the same, with exhibits thereto and other documents, in
connection therewith, with the Securities and Exchange Commission, hereby
ratifying and confirming all that each of said attorneys-in-fact, or his
substitute or substitutes, may do or cause to be done by virtue hereof.
Date: October 8, 1999
/s/ THOMAS J. WILSON, II
- ----------------------------
Thomas J. Wilson, II
<PAGE>
Power of Attorney
With Respect to the Glenbrook Life and Annuity Company Filing on Form N-4 for
The Glenbrook Life Discover Variable Account (A)
Know all men by these presents that James P. Zils, whose signature
appears below, constitutes and appoints Louis G. Lower, II, and Michael J.
Velotta, and each of them, his attorney-in-fact, with power of substitution, and
herein any and all capacities, to sign any reports and amendments thereto for
the Form N-4 for Glenbrook Life Discover Variable Account (A) and to file the
same, with exhibits thereto and other documents, in connection therewith, with
the Securities and Exchange Commission, hereby ratifying and confirming all that
each of said attorneys-in-fact, or his substitute or substitutes, may do or
cause to be done by virtue hereof.
Date: October 8, 1999
/s/ JAMES P. ZILS
- ----------------------------
James P. Zils
