NORTHBROOK VARIABLE ANNUITY ACCOUNT, 485BPOS, 1996-05-01

NORTHBROOK VARIABLE ANNUITY ACCOUNT
485BPOS, 1996-05-01

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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 30, 1996

FILE NO.: 2-82511
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SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

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FORM N-4

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

POST-EFFECTIVE AMENDMENT NO. 20 /X/

AND/OR

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940

AMENDMENT NO. 17 /X/

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NORTHBROOK VARIABLE ANNUITY ACCOUNT
(EXACT NAME OF REGISTRANT)

NORTHBROOK LIFE INSURANCE COMPANY
(NAME OF DEPOSITOR)

MICHAEL J. VELOTTA
VICE PRESIDENT, SECRETARY AND GENERAL COUNSEL
NORTHBROOK LIFE INSURANCE COMPANY
3100 SANDERS ROAD
NORTHBROOK, ILLINOIS 60062

(847) 402-2400

(NAME AND COMPLETE ADDRESS OF AGENT FOR SERVICE)

COPIES TO:

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<S> <C>
GREGOR B. MCCURDY, ESQUIRE CHRISTINE A. EDWARDS, ESQUIRE
ROUTIER AND JOHNSON, P.C. DEAN WITTER REYNOLDS INC.
1700 K STREET, N.W., SUITE 1003 TWO WORLD TRADE CENTER
WASHINGTON, D.C. 20006 NEW YORK, NEW YORK 10048
</TABLE>

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STATEMENT PURSUANT TO RULE 24F-2

Pursuant to Rule 24f-2 under the Investment Company Act of 1940, the
Registrant hereby states that, pursuant to paragraph (b)(1), it filed its Rule
24f-2 Notice for the fiscal year ending December 31, 1995 on February 28, 1996.

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

IT IS PROPOSED THAT THIS FILING WILL BECOME EFFECTIVE (CHECK APPROPRIATE BOX)

___ immediately upon filing pursuant to paragraph (b) of Rule 485

_X_ on May 1, 1996 pursuant to paragraph (b) of Rule 485

___ 60 days after filing pursuant to paragraph (a)(i) of Rule 485
___ on (date) pursuant to paragraph (a)(i) of Rule 485
___ 75 days after filing pursuant to paragraph (a)(ii) of Rule 485

IF APPROPRIATE, CHECK THE FOLLOWING BOX:
__ This post-effective amendment designates a new effective date for a
previously filed post-effective amendment.

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CROSS REFERENCE SHEET

Showing Location in Part A (Prospectus) and Part B of Registration Statement of
Information Required by Form N-4

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ITEM OF
FORM N-4 PROSPECTUS CAPTION
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<S> <C> <C> <C> <C>
1. Cover Page.......................................................... Cover Page
2. Definitions......................................................... Glossary
3. Synopsis............................................................ Introduction: Summary of Separate Account
Expenses
4. Condensed Financials................................................ --
(a) Chart.................................................... Condensed Financial Statements
(b) MM Yield................................................. Not Applicable
(c) Location of Others....................................... Financial Statements
5. General............................................................. --
(a) Depositor................................................ Northbrook Life Insurance Company
(b) Registrant............................................... The Variable Account
(c) Portfolio Company........................................ Dean Witter Variable Investment Series
(d) Fund Prospectus.......................................... Dean Witter Variable Investment Series
(e) Voting Rights............................................ Voting Rights
(f) Administrators........................................... Charges & Other Deductions -- Contract
Maintenance Charge
6. Deductions & Expenses............................................... Charges & Other Deductions
(a) General.................................................. Charges & Other Deductions
(b) Sales Load %............................................. Surrender Charge
(c) Special Purchase Plans................................... N/A
(d) Commissions.............................................. Sales Commission
(e) Expenses -- Registrant................................... Variable Account Expenses
(f) Fund Expenses............................................ Dean Witter Variable Investment Series
Expenses
(g) Organizational Expenses.................................. N/A
7. Contracts
(a) Persons with Rights...................................... The Contracts; Benefits; Income Payments;
Voting Rights; Assignments; Beneficiaries
Contract Owners
(b) (i) Allocation of Purchase Payments............... Allocation of Purchase Payments
(ii) Transfers..................................... Transfers
(iii) Exchanges..................................... N/A
(c) Changes.................................................. Modification
(d) Inquiries................................................ Customer Inquiries
8. Annuity Period...................................................... Income Payments
(a) Material Factors......................................... Amount of Variable Annuity Income Payments
(b) Dates.................................................... Income Starting Date
(c) Frequency, duration & level.............................. Amount of Variable Annuity Income Payments
(d) AIR...................................................... Amount of Variable Annuity Income Payments
(e) Minimum.................................................. Amount of Variable Annuity Income Payments
(f) -- Change Options........................................ Transfers
-- Transfer..............................................
</TABLE>
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<TABLE>
<CAPTION>
ITEM OF
FORM N-4 PROSPECTUS CAPTION
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<S> <C> <C> <C> <C>
9. Death Benefit....................................................... Death Benefits
10. Purchases & Contract Value
(a) Purchases................................................ Purchase of the Contract; Crediting of
Purchase Payments
(b) Valuation................................................ Value of Variable Account Accumulation Units
(c) Daily Calculation........................................ Value of Variable Account Accumulation Units;
Allocation of Purchase Payments
(d) Underwriter.............................................. Dean Witter Reynolds Inc.
11. Redemptions
(a) -- By Owners............................................. Surrender & Withdrawals
(b) -- By Annuitant.......................................... Annuity Options
(c) Texas ORP................................................ Not Applicable
(d) Lapse.................................................... Not Applicable
(e) Free Look................................................ Introduction
12. Taxes............................................................... Federal Tax Matters
13. Legal Proceedings................................................... N/A
14. SAI Contents........................................................ SAI Table of Contents
15. Cover Page.......................................................... Cover Page
16. Table of Contents................................................... Table of Contents
17. General Information & History
(a) Depositor's Name......................................... Northbrook Life Insurance Company
(b) Assets of Sub-Account.................................... The Variable Account
(c) Control of Depositor..................................... Northbrook Life Insurance Company
18. Services
(a) Fees & Expenses of Registrant............................ Contract Maintenance Charge
(b) Management Contracts..................................... Contract Maintenance Charge; Sales Commissions
(c) Custodian SAI: Safekeeping of the Variable Account's
Assets
Independent Public Accountant............................ SAI: Experts
(d) Assets of Registrant..................................... SAI: Safekeeping of the Variable Account
Assets
(e) Affiliated Persons....................................... N/A
(f) Principal Underwriter.................................... Dean Witter Reynolds Inc.
19. Purchase of Securities Being Offered
(a) Offering................................................. SAI: Purchase of Contracts
(b) Sales load............................................... SAI: Sales Commissions
20. Underwriters
(a) Principal Underwriter.................................... SAI: Dean Witter Reynolds Inc.
(b) Continuous offering...................................... SAI: Purchase of Contracts
(c) Commissions.............................................. SAI: Sales Commissions; Dean Witter Reynolds
Inc.
(d) Unaffiliated Underwriters................................ N/A
21. Calculation of Performance Data..................................... SAI: Performance Data
22. Annuity Payments.................................................... SAI; Income Payments
</TABLE>
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<TABLE>
<CAPTION>
ITEM OF
FORM N-4 PROSPECTUS CAPTION
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<S> <C> <C> <C> <C>
23. Financial Statements
(a) Financial Statements of Registrant....................... SAI; Northbrook Variable Annuity Account
Financial Statements
(b) Financial Statements of Depositor........................ SAI; Northbrook Life Insurance Company
Financial Statements
24a. Financial Statements................................................ Part C. Financial Statements
24b. Exhibits............................................................ Part C. Exhibits
25. Directors and Officers.............................................. Part C. Directors & Officers of Depositor
26. Persons Controlled By or Under Common Control
with Depositor or Registrant........................................ Part C. Persons Controlled by or Under Common
Control with Depositor or Registrant
27. Number of Contract Owners........................................... Part C. Number of Contract Owners
28. Indemnification..................................................... Part C. Indemnification
29a. Relationship of Principal Underwriter to Other
Investment Companies................................................ Part C. Relationship of Principal Underwriter
to Other Investment Companies
29b. Principal Underwriters.............................................. Part C. Principal Underwriters
29c. Compensation of Underwriter......................................... Part C. Compensation of Dean Witter
30. Location of Accounts and Records.................................... Part C. Location of Accounts and Records
31. Management Services................................................. Part C. Management Services
32. Undertakings........................................................ Part C. Undertakings
</TABLE>
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NORTHBROOK VARIABLE ANNUITY ACCOUNT

NORTHBROOK LIFE INSURANCE COMPANY
P.O. BOX 94040
PALATINE, IL 60094-4040

INDIVIDUAL VARIABLE ANNUITY CONTRACTS

DISTRIBUTED BY

DEAN WITTER REYNOLDS INC.
TWO WORLD TRADE CENTER
NEW YORK, NEW YORK 10048
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This Prospectus describes the Flexible Premium Deferred Variable Annuity
Contract ("Contract") offered by Northbrook Life Insurance Company ("Company"),
a wholly owned subsidiary of Allstate Life Insurance Company. Dean Witter
Reynolds Inc. ("Dean Witter") is the principal underwriter and distributor of
the Contracts.

The Contract has the flexibility to allow you to shape an annuity to fit
your particular needs. It is primarily designed to aid you in long-term
financial planning and can be used for retirement planning regardless of whether
the plan qualifies for special federal income tax treatment.

This Prospectus is a concise statement of the relevant information about the
Northbrook Variable Annuity Account ("Variable Account") which you should know
before making a decision to purchase the Contract. This Prospectus generally
describes only the variable portion of the Contract. For a brief summary of the
fixed portion of the Contract, see "The Fixed Account" on page 23.

The Company has prepared and filed a Statement of Additional Information
dated May 1, 1996 with the U.S. Securities and Exchange Commission. If you wish
to receive the Statement of Additional Information, you may obtain a free copy
by calling or writing the Company at the address below. For your convenience, an
order form for the Statement of Additional Information may be found on page 31
of this Prospectus. Before ordering, you may wish to review the Table of
Contents of the Statement of Additional Information on page 29 of this
Prospectus. The Statement of Additional Information has been incorporated by
reference into this Prospectus.

NORTHBROOK LIFE INSURANCE COMPANY
P.O. BOX 94040
PALATINE, ILLINOIS 60094-4040

(800) 654-2397

THIS PROSPECTUS IS VALID ONLY WHEN ACCOMPANIED
OR PRECEDED BY A CURRENT PROSPECTUS FOR THE
DEAN WITTER VARIABLE INVESTMENT SERIES

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION, NOR HAS THE COMMISSION PASSED UPON THE ACCURACY
OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.

PLEASE READ THIS PROSPECTUS CAREFULLY AND RETAIN IT FOR FUTURE REFERENCE

THE DATE OF THIS PROSPECTUS IS MAY 1, 1996.

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THE CONTRACTS ARE AVAILABLE IN ALL STATES (EXCEPT NEW YORK), PUERTO RICO AND THE
DISTRICT OF COLUMBIA.

THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFERING IN ANY JURISDICTION IN WHICH
SUCH OFFERING MAY NOT LAWFULLY BE MADE. NO DEALER, SALESMAN, OR OTHER PERSON IS
AUTHORIZED TO GIVE ANY INFORMATION OR MAKE ANY REPRESENTATIONS IN CONNECTION
WITH THIS OFFERING OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS, AND, IF GIVEN
OR MADE, SUCH OTHER INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON.
TABLE OF CONTENTS

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PAGE
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Glossary..................................................................................... 4
Introduction................................................................................. 6
Summary of Separate Account Expenses......................................................... 9
Condensed Financial Information.............................................................. 11
Performance Data............................................................................. 14
Financial Statements......................................................................... 14
Northbrook Life Insurance Company and the Variable Account................................... 14
Northbrook Life Insurance Company........................................................ 14
Dean Witter Reynolds Inc................................................................. 15
The Variable Account..................................................................... 15
The Dean Witter Variable Investment Series............................................... 15
The Contracts................................................................................ 17
Purchase of the Contracts................................................................ 17
Crediting of Purchase Payments........................................................... 17
Allocation of Purchase Payments.......................................................... 17
Value of Variable Account Accumulation Units............................................. 17
Transfers................................................................................ 18
Surrender and Withdrawals................................................................ 18
Default.................................................................................. 19
Charges and Other Deductions................................................................. 19
Deductions from Purchase Payments........................................................ 19
Contract Maintenance Charge.............................................................. 19
Mortality and Expense Risk Charge........................................................ 19
Surrender Charge......................................................................... 20
Taxes.................................................................................... 21
Dean Witter Variable Investment Series ("Fund") Expenses................................. 21
Benefits Under the Contract.................................................................. 21
Death Benefits Prior to the Income Starting Date......................................... 21
Death Benefits After the Income Starting Date............................................ 21
Income Payments.............................................................................. 22
Income Starting Date..................................................................... 22
Amount of Variable Annuity Income Payments............................................... 22
Annuity Options.......................................................................... 22
The Fixed Account............................................................................ 23
General Description...................................................................... 23
Transfers, Surrenders, and Withdrawals................................................... 24
General Matters.............................................................................. 25
Owner.................................................................................... 25
Beneficiary.............................................................................. 25
Delay of Payments........................................................................ 25
Assignments.............................................................................. 25
Modification............................................................................. 25
Customer Inquiries....................................................................... 25
</TABLE>

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<TABLE>
<CAPTION>
PAGE
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<S> <C>
Federal Tax Matters.......................................................................... 26
Introduction............................................................................. 26
Taxation of Annuities in General......................................................... 26
Tax Deferral........................................................................... 26
Non-Natural Owners..................................................................... 26
Diversification Requirements........................................................... 26
Investor Control....................................................................... 26
Taxation of Partial and Full Withdrawals............................................... 26
Taxation of Annuity Payments........................................................... 27
Taxation of Annuity Death Benefits..................................................... 27
Penalty Tax on Premature Distributions................................................. 27
Aggregation of Annuity Contracts....................................................... 27
Tax Qualified Contracts.................................................................. 27
Restrictions Under Section 403(b) Plans................................................ 27
Income Tax Withholding................................................................... 28
Voting Rights................................................................................ 28
Sales Commissions............................................................................ 28
Statement of Additional Information: Table of Contents....................................... 29
Order Form................................................................................... 31
</TABLE>

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GLOSSARY

ACCUMULATION UNIT--An accounting unit used to calculate the Contract Value
in the Variable Account prior to the Income Starting Date. Each Sub-Account of
the Variable Account has its own distinct Accumulation Unit value.

AGE--Age on last birthday.

ANNUITANT--A person whose life determines the duration of annuity payments
involving life contingencies. "Annuitant" may include a Joint Annuitant, if
named prior to January 19, 1985.

ANNUITANT'S BENEFICIARY--The person(s) designated in the Contract who will
receive the Death Benefit when the Annuitant is not an Owner, the Owner is a
natural person, and the Annuitant dies prior to the Income Starting Date. An
irrevocable Annuitant's Beneficiary is an Annuitant's Beneficiary whose written
consent is required before you may change the Annuitant's Beneficiary, make the
Annuitant an Owner, or make an assignment.*

ANNUITY UNIT--An accounting unit used to calculate Variable Annuity
payments. Each Sub-Account has a distinct Annuity Unit value.

AUTOMATIC ADDITIONS--Additional Purchase Payments of $25 or more which are
made automatically from the Owner's bank account or Dean Witter Active
Assets-TM- Account.

AUTOMATIC INCOME--Partial withdrawals of $100 or more may be taken
automatically from the Contract Value and sent to the Owner or deposited in the
Owner's bank account or Dean Witter Active Assets-TM- Account or sent directly
to the Owner.

BENEFICIARY--The person to whom benefits will be paid upon the earlier of
the Owner's or Annuitant's death, including any contingent beneficiary. In the
event a Beneficiary is not named, the Company will treat the Contract Owner or
the estate of the Contract Owner as the Beneficiary. Under the revised Contract
(see footnote below), the Beneficiary may be either the Owner's Beneficiary or
the Annuitant's Beneficiary.*

COMPANY--The issuer of the Contract, Northbrook Life Insurance Company,
which is a wholly-owned subsidiary of Allstate Life Insurance Company.

CONTINGENT ANNUITANT--The person who will become the Annuitant, if the
Annuitant and Joint Annuitant, if applicable, die prior to the Income Starting
Date. A Contingent Annuitant must be named prior to the death of the Annuitant
or the Income Starting Date, whichever occurs first.*

CONTINGENT OWNER--The person who will become Owner of the Contract upon the
death(s) of the Owner and any Joint Owner, so long as the Annuitant or Joint
Annuitant, if applicable, is still living.*

CONTRACT--The Flexible Premium Deferred Variable Annuity Contract known as
the "Dean Witter Variable Annuity," that is described in this prospectus (in
Oregon, Pennsylvania and Texas, the Contract is known as the "Northbrook
Variable Annuity").

CONTRACT ANNIVERSARY--An anniversary of the date that the Contract was
issued to the Contract Owner.*

CONTRACT VALUE--The sum of the value of all Accumulation Units for the
Variable Account plus the value in the Fixed Account.

CONTRACT YEAR--The year commencing on either the Issue Date or a Contract
Anniversary.

DATE OF DEATH--The Date that an Owner and/or Annuitant dies causing a Death
Benefit to be due.*

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DEATH BENEFIT--The amount payable to the Beneficiary on the death of the
Annuitant (and Joint Annuitant, if named prior to January 19, 1985) so long as
no Contingent Annuitant is living, and so long as the death occurs on or before
the date the IRS Required Distribution must be made or the Income Starting Date,
whichever is earlier.

DOLLAR COST AVERAGING--A method to transfer $100 or more of the Contract
Value in the Money Market Sub-Account automatically to the other Sub-Accounts on
a monthly basis.

DUE PROOF OF DEATH--One of the following

(a) A copy of a certified death certificate.

(b) A copy of a certified decree of a court of competent jurisdiction as
to the finding of death.

FIXED ACCOUNT--All of the assets of the Company that are not in separate
accounts.

FIXED ANNUITY--An annuity with payments having a guaranteed amount.

FREE WITHDRAWAL AMOUNT--A portion of the Contract Value which may be
withdrawn without incurring a Surrender Charge, i.e., 10% of all Purchase
Payments made at least one year before the date of withdrawal.

INCOME PAYMENTS--A series of periodic annuity payments made by the Company
to the Contract Owner or Beneficiary.

INCOME STARTING DATE--The date Income Payments are to begin under the
Contract.

INVESTMENT ALTERNATIVE--The Fixed Account and the eleven Sub-Accounts of the
Variable Account constitute the twelve Investment Alternatives.

JOINT ANNUITANT--The person, along with the Annuitant, whose life determines
the duration of annuity payments under a joint and last survivor annuity. If a
Joint Annuitant was named before January 19, 1985, the Joint Annuitant is the
person who will become the Annuitant if the Annuitant dies prior to the Income
Starting Date.

NET INVESTMENT FACTOR--The factor for a particular Sub-Account used to
determine the value of an Accumulation Unit and Annuity Unit in any Valuation
Period.

NON-QUALIFIED CONTRACTS--Contracts that do not qualify for special federal
income tax treatment.

OWNER--The person designated as the owner in the Contract or as subsequently
changed. If a Contract is jointly owned, rights and privileges under the
Contract must be exercised jointly by each Owner. If a Contract has been
absolutely assigned, the assignee is the Owner. A collateral assignee is not an
Owner.

OWNER'S BENEFICIARY--The person(s) designated in the Contract who, after the
death of all Owners, may elect to receive the Death Benefit or continue the
Contract as described in "Benefits Under the Contract" on page 21. An
irrevocable Owner's Beneficiary is an Owner's Beneficiary whose consent is
required before you may change the Owner's Beneficiary, add an Owner, or make an
assignment.*

PORTFOLIOS--The mutual fund portfolios of The Dean Witter Variable
Investment Series (formerly named Dean Witter Variable Annuity Investment
Series). The Dean Witter Variable Investment Series has eleven separate
Portfolios: the Money Market Portfolio, the Quality Income Plus Portfolio, the
High Yield Portfolio, the Utilities Portfolio, the Dividend Growth Portfolio,
the Capital Growth Portfolio, the Global Dividend Growth Portfolio, the European
Growth Portfolio, the Pacific Growth Portfolio, the Equity Portfolio and the
Strategist Portfolio.

PURCHASE PAYMENTS--The premiums paid by the Owner to the Company.

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QUALIFIED CONTRACTS--Contracts issued under plans that qualify for special
federal income tax treatment.

REQUIRED MINIMUM DISTRIBUTION--For Qualified Contracts, withdrawals equal to
the IRS Required Minimum Distribution may be taken from the Cash Value and sent
to the Owner or deposited in the Owner's bank account or Dean Witter Active
Assets-TM- Account.

SUB-ACCOUNT--A sub-division of the Variable Account. Each Sub-Account
invests exclusively in shares of a specified Portfolio.

SURRENDER CHARGE--The charge that may be assessed by the Company on full or
partial withdrawals of the Contract Value in excess of the Free Withdrawal
Amount.

VALUATION DATE--Each day that the New York Stock Exchange is open for
business, and any other day in which there is sufficient degree of trading in
the Variable Account's portfolio securities that the value of Accumulation or
Annuity Units might be materially affected by changes in the value of the
portfolio securities. The Valuation Date does not include such other Federal and
non-Federal holidays as are observed by the New York Stock Exchange.

VALUATION PERIOD--The period between successive Valuation Dates, commencing
at the close of business of each Valuation Date and ending at the close of
business of the next succeeding Valuation Date.

VARIABLE ACCOUNT--Northbrook Variable Annuity Account, a separate investment
account established by the Company to receive and invest the Purchase Payments
paid under the Contracts.

VARIABLE ANNUITY--An annuity with payments that have no predetermined or
guaranteed dollar amounts. The payments will vary in amounts depending upon the
investment experience of one or more of the Portfolios.

*The Company revised the Contract on March 1, 1990. These designations have
been modified in the revised Contract for clarification.

INTRODUCTION
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1. WHAT IS THE PURPOSE OF THE CONTRACT?
The Contract seeks to allow you to accumulate funds and to receive Income
Payments which reflect changes in the cost of living before and after
retirement. THERE IS NO ASSURANCE THAT THIS GOAL WILL BE ACHIEVED. In attempting
to achieve this goal, the Owner can allocate Purchase Payments to one or more of
the Variable Account Portfolios.

Because Contract Values and Income Payments depend on the investment
experience of the selected Portfolios, the Owner bears the entire investment
risk for amounts allocated to the Variable Account. See "Value of Variable
Account Accumulation Units," pg. 17 and "Income Payments," pg. 22.

2. WHAT TYPES OF INVESTMENTS UNDERLIE THE VARIABLE ACCOUNT?

The Variable Account invests exclusively in shares of the Dean Witter
Variable Investment Series (the "Fund"), a mutual fund managed by Dean Witter
InterCapital, Inc., a wholly owned subsidiary of Dean Witter Reynolds Inc. The
Fund has eleven Portfolios: the Money Market Portfolio, the Quality Income Plus
Portfolio, the High Yield Portfolio, the Utilities Portfolio, the Dividend
Growth Portfolio, the Capital Growth Portfolio, the Global Dividend Growth
Portfolio, the European Growth Portfolio, the Pacific Growth Portfolio, the
Equity Portfolio, and the Strategist Portfolio. The assets of each Portfolio are
held separately from the other Portfolios and each has distinct investment

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objectives and policies which are described in the accompanying Prospectus for
the Fund.

3. HOW DO I PURCHASE A CONTRACT?

The Company has discontinued the offering of new Contracts. Additional
Purchase Payments to existing Contracts are accepted by the Company.

Automatic Additions allow you to systematically build toward your long-term
financial plan on a monthly basis by making subsequent Purchase Payments from
your bank account or your Dean Witter Active Assets-TM- Account. Subsequent
Purchase Payments must be $25 or more and may be made at any time prior to the
Income Starting Date.

The Company may limit the total Purchase Payments in any year to three times
the Purchase Payments made during the first Contract Year. See "Purchase of the
Contracts," pg. 17 and "Crediting of Purchase Payments," pg. 17.

4. HOW DO I ALLOCATE PURCHASE PAYMENTS?

On your application, you will allocate your Purchase Payment among the
Sub-Accounts and the Fixed Account. All allocations must be in whole percents
from 0% to 100% and must total 100%. Allocations may be changed by notifying the
Company in writing. See "Allocation of Purchase Payments," pg. 17.

5. CAN I TRANSFER AMOUNTS AMONG THE SUB-ACCOUNTS?

Transfers can be made among the eleven Sub-Accounts and the Fixed Account
without charge. Transfers must be at least $100 or the entire amount in the
Investment Alternative whichever is less.

Dollar Cost Averaging automatically moves funds from the Money Market
Sub-Account on a monthly basis to other Sub-Accounts of your choice.

Certain transfers may be restricted. See "Transfers," pg. 18.

6. CAN I GET MY MONEY IF I NEED IT?

All or part of the Contract Value can be withdrawn before the earliest of
the Income Starting Date, the death of any Owner or the death of the last
surviving Annuitant. Partial withdrawals may also be taken automatically through
monthly Automatic Income withdrawals. See "Surrender and Withdrawals," pg. 18.

No Surrender Charges will be deducted from the first withdrawal in a
Contract Year on amounts up to the Free Withdrawal Amount. Amounts withdrawn in
excess of the Free Withdrawal Amount may be subject to a Surrender Charge of 0%
to 6% depending on how long the withdrawn Purchase Payments have been invested
in the Contract. THE COMPANY GUARANTEES THAT THE AGGREGATE SURRENDER CHARGES
WILL NEVER EXCEED 7% OF THE PURCHASE PAYMENTS.

For Non-Qualified Contracts, i.e. Contracts not qualifying for special tax
treatment, a penalty tax may be imposed on withdrawals. Federal and state income
tax may be withheld from withdrawal and surrender amounts. Qualified Contracts
may also have certain restrictions and penalties on withdrawals. See "Surrender
and Withdrawals," pg. 18, and "Taxation of Annuities in General," pg. 26.

7. WHAT ARE THE CHARGES AND DEDUCTIONS UNDER THE CONTRACT?

To allow you to invest the entire Purchase Payment, the Company currently
does not deduct sales charges at the time of investment. Annually, however, the
Company deducts $30 for maintaining the Contract ("Contract Maintenance
Charge"). THIS AMOUNT IS GUARANTEED NOT TO INCREASE. See "Contract Maintenance
Charge," pg. 19, for how and when this charge is deducted.

The Company deducts a daily charge equal on an annual basis to 1.0% of the
Contract's daily net assets of the Variable Account and will reflect this charge
in the net interest rate credited to amounts in the Fixed Account allocable to
the Contracts in order to pay the Death Benefit and expenses not covered by

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the Contract Maintenance Charge. See "Mortality and Expense Risk Charge," pg.
19.

Additional deductions may be made for certain taxes. Ordinarily, premium
taxes will be deducted when money is withdrawn from the Contract or when Income
Payments under an Annuity Option begin. The Company reserves the right to deduct
such taxes from Purchase Payments at the time such taxes are incurred.
Currently, no deductions are made for capital gains tax reserve.

8. WHAT ANNUITY OPTIONS ARE AVAILABLE UNDER THE CONTRACT?

The Owner may receive Income Payments on a completely variable basis, a
completely fixed basis, or a variable and fixed basis. The Owner has some
flexibility in choosing when Income Payments begin. Payments must begin by the
later of the month following the Annuitant's 85th birthday or the 10th Contract
Anniversary. See "Income Payments," pg. 22 and "Income Starting Date," pg. 22.

Three Annuity Options are listed in the Contract: (1) payments for life of
the Annuitant, but with 120 monthly payments guaranteed; (2) payments for a
specified period; and (3) payments for the life of the Annuitant and Joint
Annuitant. Other options may be available at the Company's discretion; however,
Surrender Charges may apply if Income Payments are made for a specified period
of less than 120 months. See "Annuity Options," pg. 22.

Federal tax law may limit the availability of Annuity Options.

9. DOES THE CONTRACT PAY ANY GUARANTEED DEATH BENEFITS?

Death benefits will be paid to the Beneficiary if the Owner(s) or the
Annuitant(s) (and no Contingent Annuitant is still living), die before the
Income Starting Date. The Death Benefit will be the greater of (1) the sum of
all Purchase Payment(s) less any amounts deducted in connection with partial
withdrawals, including any Surrender Charges, or (2) the Contract Value. Death
benefits after the Income Starting Date, if any, will depend on the Annuity
Option chosen.

The Beneficiary has 180 days from the date of death of the Owner(s) or the
Annuitant(s) to either elect an Annuity Option or to take a lump sum payment.
See "Benefits Under the Contract" pg. 21.

10. IS THERE A FREE-LOOK PROVISION?

Owners may cancel a Contract anytime within 10 days after receipt of the
Contract and receive a full refund of Purchase Payments allocated to the Fixed
Account. Unless a refund of Purchase Payments is required by State or Federal
law, Purchase Payments allocated to the Variable Account will be returned after
an adjustment to reflect investment gain or loss that occurred from the date of
allocation through the date of cancellation.

11. DOES THE CONTRACT OWNER HAVE ANY VOTING RIGHTS UNDER THE CONTRACT?

The Owner can instruct the Company how to vote shares of any eligible
Portfolio attributable to the Contract. See "Voting Rights," pg. 28.

* * *

This prospectus describes only the variable aspects of the Contract, except
where fixed aspects are specifically mentioned. See pg. 23 for a brief summary
of the Fixed Account.

8
<PAGE>
SUMMARY OF SEPARATE ACCOUNT EXPENSES
- --------------------------------------------------------------------------------

The following fee table illustrates all expenses and fees that the Owners
will incur. The expenses and fees set forth in the table are based on charges
under the Contracts and on the expenses of the separate account and the
underlying Fund for the fiscal year ended December 31, 1995.

OWNER TRANSACTION EXPENSES (ALL SUB-ACCOUNTS)

<TABLE>
<S> <C>
Sales Load Imposed on Purchases (as a percentage of Purchase Payments).............................. None
Contingent Deferred Sales Charge (as a percentage of amount surrendered)*
</TABLE>

<TABLE>
<CAPTION>
Applicable Sales
ELAPSED TIME SINCE PURCHASE PAYMENT BEING WITHDRAWN WAS MADE Charge Percentage
- ------------------------------------------------------------------------------------------ -------------------
<S> <C>
Less than 1 year.......................................................................... 6%
1 year, but less than 2 years............................................................. 5%
2 years, but less than 3 years............................................................ 4%
3 years, but less than 4 years............................................................ 3%
4 years, but less than 5 years............................................................ 2%
5 years, but less than 6 years............................................................ 1%
6 years or more........................................................................... 0%
</TABLE>

<TABLE>
<S> <C>
Exchange Fee........................................................................................ None
Annual Contract Fee................................................................................. $ 30
</TABLE>

SEPARATE ACCOUNT ANNUAL EXPENSES (AS A PERCENTAGE OF AVERAGE ACCOUNT VALUE)

<TABLE>
<CAPTION>
MONEY MARKET QUALITY INCOME DIVIDEND GROWTH
SUB- PLUS SUB- HIGH YIELD SUB- UTILITIES SUB- SUB- CAPITAL GROWTH
ACCOUNT ACCOUNT ACCOUNT ACCOUNT ACCOUNT SUB- ACCOUNT
--------------- --------------- --------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Mortality and Expense
Risk Charges:........... 1% 1% 1% 1% 1% 1%
Total Separate Account
Annual Expenses:........ 1% 1% 1% 1% 1% 1%

<CAPTION>
GLOBAL DIVIDEND EUROPEAN GROWTH PACIFIC GROWTH
GROWTH SUB- SUB- SUB- EQUITY SUB- STRATEGIST SUB-
ACCOUNT ACCOUNT ACCOUNT ACCOUNT ACCOUNT
--------------- ---------------- --------------- --------------- ----------------
<S> <C> <C> <C> <C> <C>
Mortality and Expense
Risk Charges:........... 1% 1% 1% 1% 1%
Total Separate Account
Annual Expenses:........ 1% 1% 1% 1% 1%
</TABLE>

DEAN WITTER VARIABLE INVESTMENT SERIES ("FUND") EXPENSES (AS A PERCENTAGE OF
FUND AVERAGE NET ASSETS)

<TABLE>
<CAPTION>
GLOBAL
DIVIDEND CAPITAL DIVIDEND
MONEY MARKET QUALITY INCOME HIGH YIELD UTILITIES GROWTH GROWTH GROWTH
PORTFOLIO PLUS PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
------------- -------------- ------------- -------------- -------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
Management Fees:...... .50% .50%(1) .50% .65%(2) .59%(3) .65% .75%
Other Expenses:....... .03% .04% .04% .03% .02% .09% .13%
Total Fund Annual
Expenses:............ .58% .54% .54% .68% .61% .74% .88%

EUROPEAN PACIFIC
GROWTH GROWTH EQUITY STRATEGIST
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
------------- ------------ -------------- --------------
<S> <C> <C> <C> <C>
Management Fees:...... 1.00% 1.00% .50%(4) .50%
Other Expenses:....... .17% .44% .04% .02%
Total Fund Annual
Expenses:............ 1.17% 1.44% .54% .52%
</TABLE>

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

* There are no Contingent Deferred Sales Charges on the first withdrawal of
each Contract Year on amounts up to the Free Withdrawal Amount.

(1) This percentage is applicable to Portfolio net assets of up to $500
million. For net assets which exceed $500 million, the management fee will
be 0.45%.

(2) This percentage is applicable to Portfolio net assets of up to $500
million. For net assets which exceed $500 million, the management fee will
be 0.55%.

(3) The management fee will be 0.625% for net assets of up to $500 million. For
net assets which exceed $500 million, but do not exceed $1 billion, the
management fee will be 0.50% and for net assets that exceed $1 billion, the
management fee will be 0.475%.

(4) This percentage is applicable to Portfolio net assets of up to $1 billion.
For net assets which exceed $1 billion, the management fee will be 0.475%.

9
<PAGE>
EXAMPLE

You (the Owner) would pay the following expenses on a $1,000 investment,
assuming a 5% annual return under the following circumstances:

If you surrender your Contract at the end of the applicable time period (or
if you annuitize for a specified period of less than 120 months):

<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Money Market Sub-Account.................................................. $ 63 $ 81 $ 99 $ 191
Quality Income Plus Sub-Account........................................... $ 63 $ 82 $ 99 $ 192
High Yield Sub-Account.................................................... $ 63 $ 82 $ 99 $ 192
Utilities Sub-Account..................................................... $ 65 $ 86 $ 107 $ 208
Dividend Growth Sub-Account............................................... $ 64 $ 84 $ 103 $ 200
Equity Sub-Account........................................................ $ 63 $ 82 $ 99 $ 192
Strategist Sub-Account.................................................... $ 63 $ 81 $ 98 $ 190
Capital Growth Sub-Account................................................ $ 65 $ 88 $ 110 $ 214
European Growth Sub-Account............................................... $ 69 $ 101 $ 132 $ 260
Pacific Growth Sub-Account................................................ $ 72 $ 109 $ 146 $ 288
Global Dividend Growth Sub-Account........................................ $ 67 $ 92 $ 117 $ 229
</TABLE>

If you do not surrender your Contract or if you annuitize* for a specified
period of 120 months or more, at the end of the applicable time period:

<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Money Market Sub-Account.................................................. $ 17 $ 51 $ 88 $ 191
Quality Income Plus Sub-Account........................................... $ 17 $ 52 $ 89 $ 192
High Yield Sub-Account.................................................... $ 17 $ 52 $ 89 $ 192
Utilities Sub-Account..................................................... $ 18 $ 56 $ 96 $ 208
Dividend Growth Sub-Account............................................... $ 17 $ 54 $ 92 $ 200
Equity Sub-Account........................................................ $ 17 $ 52 $ 89 $ 192
Strategist Sub-Account.................................................... $ 16 $ 51 $ 88 $ 190
Capital Growth Sub-Account................................................ $ 19 $ 58 $ 99 $ 214
European Growth Sub-Account............................................... $ 23 $ 71 $ 122 $ 260
Pacific Growth Sub-Account................................................ $ 26 $ 79 $ 136 $ 288
Global Dividend Growth Sub-Account........................................ $ 20 $ 62 $ 107 $ 229
</TABLE>

The above example should not be considered a representation of past or
future expense or performance. Actual expenses of a Sub-Account may be greater
or lesser than those shown.
- --------------------------
*Early Withdrawal Charges may be deducted from the Cash Value before it is
applied to an income plan with a specified period of less than 120 months.

10
<PAGE>
CONDENSED FINANCIAL INFORMATION
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
ACCUMULATION UNIT VALUES AND NUMBER
OF ACCUMULATION UNITS OUTSTANDING FOR
EACH SUB-ACCOUNT*
FOR THE PERIODS ENDING DECEMBER 31
-----------------------------------------------------------------------------------------
1986 1987 1988 1989 1990 1991 1992 1993
---------- ---------- ---------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
MONEY MARKET SUB-ACCOUNT
Accumulation Unit Value,
Beginning of Period.......... $11.430 $12.043 $12.669 $13.459 $14.532 $15.530 $16.260 $16.651
Accumulation Unit Value, End
of Period.................... $12.043 $12.669 $13.459 $14.532 $15.530 $16.260 $16.651 $16.940
Number of Units Outstanding,
End of Period................ 3,501,808 5,479,058 5,743,470 5,269,945 7,300,227 4,993,305 3,142,381 2,402,295
HIGH YIELD SUB-ACCOUNT
Accumulation Unit Value,
Beginning of Period.......... $14.019 $16.407 $15.745 $17.324 $14.993 $10.864 $17.064 $20.008
Accumulation Unit Value, End
of Period.................... $16.407 $15.745 $17.324 $14.993 $10.864 $17.064 $20.008 $24.609
Number of Units Outstanding,
End of Period................ 12,472,735 12,161,618 11,091,971 6,425,388 2,487,589 1,973,508 1,677,444 1,537,549
EQUITY SUB-ACCOUNT
Accumulation Unit Value,
Beginning of Period.......... $13.511 $15.623 $14.510 $15.786 $18.580 $17.728 $27.916 $27.681
Accumulation Unit Value, End
of Period.................... $15.623 $14.510 $15.786 $18.580 $17.728 $27.916 $27.681 $32.807
Number of Units Outstanding,
End of Period................ 2,767,931 3,615,560 2,524,904 3,123,809 2,302,425 2,025,964 1,886,301 1,800,750
QUALITY INCOME PLUS SUB-ACCOUNT
Accumulation Unit Value,
Beginning of Period.......... -- $10.000 $10.172 $10.828 $12.097 $12.798 $15.016 $16.096
Accumulation Unit Value, End
of Period.................... -- $10.172 $10.828 $12.097 $12.798 $15.016 $16.096 $18.010
Number of Units Outstanding,
End of Period................ -- 2,366,834 2,589,488 4,028,103 4,292,424 4,272,603 4,167,157 3,998,449
STRATEGIST SUB-ACCOUNT
Accumulation Unit Value,
Beginning of Period.......... -- $10.000 $10.036 $11.211 $12.284 $12.351 $15.684 $16.651
Accumulation Unit Value, End
of Period.................... -- $10.036 $11.211 $12.284 $12.351 $15.684 $16.651 $18.199
Number of Units Outstanding,
End of Period................ -- 2,689,906 5,526,856 7,164,494 5,424,907 4,805,519 4,762,207 4,409,391
UTILITIES SUB-ACCOUNT
Accumulation Unit Value,
Beginning of Period.......... -- -- -- -- $10.000 $10.365 $12.372 $13.797
Accumulation Unit Value, End
of Period.................... -- -- -- -- $10.365 $12.372 $13.797 $15.804
Number of Units Outstanding,
End of Period................ -- -- -- -- 3,364,215 3,655,014 3,883,303 3,932,991
DIVIDEND GROWTH SUB-ACCOUNT
Accumulation Unit Value,
Beginning of Period.......... -- -- -- -- $10.000 $9.143 $11.564 $12.383
Accumulation Unit Value, End
of Period.................... -- -- -- -- $9.143 $11.564 $12.383 $14.019
Number of Units Outstanding,
End of Period................ -- -- -- -- 5,838,210 5,646,884 6,048,975 5,878,916

1994 1995
--------- ----------
<S> <C> <C>
MONEY MARKET SUB-ACCOUNT
Accumulation Unit Value,
Beginning of Period.......... $16.940 $17.411
Accumulation Unit Value, End
of Period.................... $17.411 $18.215
Number of Units Outstanding,
End of Period................ 2,408,602 1,486,360
HIGH YIELD SUB-ACCOUNT
Accumulation Unit Value,
Beginning of Period.......... $24.609 $23.759
Accumulation Unit Value, End
of Period.................... $23.759 $27.055
Number of Units Outstanding,
End of Period................ 1,202,135 906,011
EQUITY SUB-ACCOUNT
Accumulation Unit Value,
Beginning of Period.......... $32.807 $30.885
Accumulation Unit Value, End
of Period.................... $30.885 $43.585
Number of Units Outstanding,
End of Period................ 1,652,850 1,314,532
QUALITY INCOME PLUS SUB-ACCOUNT
Accumulation Unit Value,
Beginning of Period.......... $18.010 $16.648
Accumulation Unit Value, End
of Period.................... $16.648 $20.498
Number of Units Outstanding,
End of Period................ 2,779,045 2,159,205
STRATEGIST SUB-ACCOUNT
Accumulation Unit Value,
Beginning of Period.......... $18.199 $18.728
Accumulation Unit Value, End
of Period.................... $18.728 $20.284
Number of Units Outstanding,
End of Period................ 3,994,684 2,708,051
UTILITIES SUB-ACCOUNT
Accumulation Unit Value,
Beginning of Period.......... $15.804 $14.235
Accumulation Unit Value, End
of Period.................... $14.235 $18.132
Number of Units Outstanding,
End of Period................ 2,814,866 2,298,190
DIVIDEND GROWTH SUB-ACCOUNT
Accumulation Unit Value,
Beginning of Period.......... $14.019 $13,425
Accumulation Unit Value, End
of Period.................... $13.425 $18.128
Number of Units Outstanding,
End of Period................ 5,229,279 4,402,940
</TABLE>

11
<PAGE>
CONDENSED FINANCIAL INFORMATION (CONTINUED)
- --------------------------------------------------------------------------------

1994 1995
--------- ----------
<S> <C> <C>
CAPITAL GROWTH SUB-ACCOUNT
Accumulation Unit Value,
Beginning of Period.......... $11.799 $11.533
Accumulation Unit Value, End
of Period.................... $11.533 $15.177
Number of Units Outstanding,
End of Period................ 321,342 256,312
EUROPEAN GROWTH SUB-ACCOUNT
Accumulation Unit Value,
Beginning of Period.......... $14.433 $15.484
Accumulation Unit Value, End
of Period.................... $15.484 $19.299
Number of Units Outstanding,
End of Period................ 868.638 649,852
GLOBAL DIVIDEND GROWTH
SUB-ACCOUNT
Accumulation Unit Value,
Beginning of Period.......... $10.000 $9.942
Accumulation Unit Value, End
of Period.................... $9.942 $12.012
Number of Units Outstanding,
End of Period................ 951,857 852,851
PACIFIC GROWTH SUB-ACCOUNT
Accumulation Unit Value,
Beginning of Period.......... $10.000 $9.248
Accumulation Unit Value, End
of Period.................... $9.248 $9.682
Number of Units Outstanding,
End of Period................ 644,451 608,464
</TABLE>

*The Money Market, High Yield and Equity Sub-Accounts commenced operations on
March 9, 1984. The Quality Income Plus and Strategist Sub-Accounts commenced
operations on March 1, 1987. The Utilities and Dividend Growth Sub-Accounts
commenced operations on March 1, 1990. The Capital Growth and European Growth
Sub-Accounts commenced operations on March 1, 1991. The Global Dividend Growth
and Pacific Growth Sub-Accounts commenced operations on February 23, 1994. The
Accumulation Unit Value for each of these Sub-Accounts was initially set at
$10.000.

12
<PAGE>
PERFORMANCE DATA
- --------------------------------------------------------------------------------

From time to time the Variable Account may publish advertisements containing
performance data relating to its Sub-Accounts. The performance data for the
Sub-Accounts (other than for the Money Market Sub-Account) will always be
accompanied by total return quotations for the most recent one, five or ten year
periods, or for a period from inception to date if the Sub-Account has not been
available for one of the prescribed periods. The total return quotations for
each period will be the average annual rates of return required for an initial
Purchase Payment of $1,000 to equal the amount Owners would receive on a
withdrawal of the Purchase Payment, after reflection of all recurring and
nonrecurring charges.

In addition, the Variable Account may advertise the total return over
different periods of time by means of aggregate, average, year-by-year or other
types of total return figures. Such calculations may or may not reflect the
deduction of some or all of the charges which may be imposed on the Contracts by
the Variable Account which, if reflected, would reduce the performance quoted.
The Variable Account from time to time may also advertise the performance of the
Sub-Accounts relative to certain performance rankings and indexes compiled by
independent organizations.

Performance figures used by the Variable Account are based on actual
historical performance of its Sub-Accounts for specified periods, and the
figures are not intended to indicate future performance. More detailed
information on the computation is set forth in the Statement of Additional
Information.

FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------

The financial statements of the Northbrook Variable Annuity Account and
Northbrook Life Insurance Company may be found in the Statement of Additional
Information, which is incorporated by reference into this Prospectus and which
is available upon request. (See Order Form on pg. 31.)

NORTHBROOK LIFE INSURANCE COMPANY AND THE VARIABLE ACCOUNT
- --------------------------------------------------------------------------------

NORTHBROOK LIFE INSURANCE COMPANY

The Company is the issuer of the Contract. Incorporated in 1978 as a stock
life insurance company under the laws of Illinois, the Company sells annuities
and individual life insurance. The Company is currently licensed to operate in
the District of Columbia, all states (except New York) and Puerto Rico. The
Company's home office is located at 3100 Sanders Road, Northbrook, Illinois,
60062.

The Company is a wholly-owned subsidiary of Allstate Life Insurance Company
("Allstate Life"), which is a stock life insurance company incorporated under
the laws of Illinois. Allstate Life is a wholly-owned subsidiary of Allstate
Insurance Company ("Allstate"), which is a stock insurance company incorporated
under the laws of Illinois. With the exception of directors' qualifying shares,
all of the outstanding capital stock of Allstate is owned by The Allstate
Corporation ("Corporation"). In June 1995, Sears, Roebuck and Co. ("Sears")
distributed in a tax-free dividend to its stockholders its remaining 80.3%
ownership in the Corporation. As a result of the distribution, Sears no longer
has an ownership interest in the Corporation.

DEAN WITTER REYNOLDS INC.

Dean Witter Reynolds Inc. ("Dean Witter") is the principal underwriter of
the Contract. Dean Witter is a wholly-owned subsidiary of Dean Witter, Discover
& Co. ("Dean Witter Discover"). Dean Witter is located at Two World Trade
Center, New York, New York. Dean Witter is a member of the New York Stock
Exchange and the National Association of Securities Dealers, Inc.

13
<PAGE>

Dean Witter's wholly-owned subsidiary, Dean Witter InterCapital, Inc.
("InterCapital"), is the investment manager of the Dean Witter Variable
Investment Series. InterCapital is registered with the Securities and Exchange
Commission as an investment adviser. As compensation for investment management,
the Fund pays InterCapital a monthly advisory fee. These expenses are more fully
described in the Fund's prospectus attached to this prospectus.

In October, 1993, Allstate through Allstate Life and the Company, announced
a strategic alliance to develop, market and distribute proprietary annuity and
life insurance products through Dean Witter account executives.

THE VARIABLE ACCOUNT

Established on February 14, 1983, the Variable Account is a unit investment
trust registered with the Securities and Exchange Commission under the
Investment Company Act of 1940, but such registration does not signify that the
Commission supervises the management or investment practices or policies of the
Variable Account. The investment performance of the Variable Account is entirely
independent of both the investment performance of the Company's general account
and the performance of any other separate account.

The assets of the Variable Account are held separately from the other assets
of the Company. They are not chargeable with liabilities incurred in the
Company's other business operations. Accordingly, the income capital gains and
capital losses, realized or unrealized, incurred on the assets of the Variable
Account are credited to or charged against the assets of the Variable Account,
without regard to the income, capital gains or capital losses arising out of any
other business the Company may conduct.

The Variable Account has been divided into eleven Sub-Accounts, each of
which invests solely in its corresponding Portfolio of the Dean Witter Variable
Investment Series. Additional Sub-Accounts may be added at the discretion of the
Company.

THE DEAN WITTER VARIABLE INVESTMENT SERIES

The Variable Account will invest exclusively in the Dean Witter Variable
Investment Series (the "Fund"). Shares of the Fund are offered to separate
accounts of the Company which fund variable annuity and variable life contracts.
Shares of the Fund are also offered to separate accounts of a life insurance
company affiliated with the Company which fund variable annuity and variable
life contracts. Shares of the Fund may also be offered to separate accounts of
certain non-affiliated life insurance companies which fund variable life
insurance contracts. It is conceivable that in the future it may become
disadvantageous for both variable life and variable annuity contract separate
accounts to invest in the same underlying fund. Although neither the Company nor
the Fund currently foresees any such disadvantage, the Fund's Board of Trustees
intends to monitor events in order to identify any material irreconcilable
conflict between the interests of variable annuity contract owners and variable
life contract owners and to determine what action, if any, should be taken in
response thereto.

Investors in the High Yield Portfolio should carefully consider the relative
risks of investing in high yield securities, which are commonly known as junk
bonds. Bonds of this type are considered to be speculative with regard to the
payment of interest and return of principal. Investors in the High Yield
Portfolio should also be cognizant of the fact that such securities are not
generally made for short-term investing and should assess the risks associated
with an investment in the High Yield Portfolio.

Shares of the Portfolios of the Fund are not deposits, or obligations of, or
guaranteed or endorsed by any bank and the shares are not federally insured by
the Federal Deposit Insurance Corporation, the Federal Reserve Board or any
other agency.

The Fund has eleven portfolios; the Money Market Portfolio, the Quality
Income Plus Portfolio, the High Yield Portfolio, the Utilities Portfolio, the
Dividend Growth Portfolio, the Capital Growth Portfolio, the Global Dividend
Growth Portfolio, the European Growth Portfolio the Pacific Growth Portfolio,
the

14
<PAGE>

Equity Portfolio and the Strategist Portfolio. Each Portfolio has different
investment objectives and policies and operates as a separate investment fund.

The Money Market Portfolio seeks high current income, preservation of
capital, and liquidity by investing in certain money market instruments,
principally U.S. government securities, bank obligations, and high grade
commercial paper.

The Quality Income Plus Portfolio seeks, as its primary objective, to earn a
high level of current income and, as a secondary objective, capital
appreciation, but only when consistent with its primary objective, by investing
primarily in debt securities issued by the U.S. Government, its agencies and
instrumentalities, including zero coupon securities and in fixed-income
securities rated A or higher by Moody's Investors Service, Inc. ("Moody's") or
Standard & Poor's Corporation ("Standard & Poor's") or non-rated securities of
comparable quality, and by writing covered call and put options against such
securities.

The High Yield Portfolio seeks, as its primary objective, to earn a high
level of current income by investing in a professionally managed diversified
portfolio consisting principally of fixed-income securities rated Baa or lower
by Moody's or BBB or lower by Standard & Poor's or non-rated securities of
comparable quality which are commonly known as junk bonds, and, as a secondary
objective, capital appreciation when consistent with its primary objective.

The Utilities Portfolio seeks to provide current income and long-term growth
of income and capital by investing primarily in equity and fixed-income
securities of companies engaged in the public utilities industry.

The Dividend Growth Portfolio seeks to provide reasonable current income and
long-term growth of income and capital by investing primarily in common stock of
companies with a record of paying dividends and the potential for increasing
dividends.

The Capital Growth Portfolio seeks to provide long-term capital growth by
investing principally in common stocks.

The Global Dividend Growth Portfolio seeks to provide reasonable current
income and long-term growth of income and capital by investing primarily in
common stock of companies, issued by issuers worldwide, with a record of paying
dividends and the potential for increasing dividends.

The European Growth Portfolio seeks to maximize the capital appreciation of
its investments by investing primarily in securities issued by issuers located
in Europe.

The Pacific Growth Portfolio seeks to maximize the capital appreciation of
its investments by investing primarily in securities issued by issuers located
in Asia, Australia and New Zealand.

The Equity Portfolio seeks, as its primary objective, growth of capital
through investments in common stock of companies believed by the Investment
Manager to have potential for superior growth and, as a secondary objective,
income when consistent with its primary objective.

The Strategist Portfolio seeks a high total investment return through a
fully managed investment policy utilizing equity securities, fixed-income
securities rated Baa or higher by Moody's or BBB or higher by securities of
comparable quality), and money market securities, and the writing of covered
options on such securities and the collateralized sale of stock index options.

All dividends and capital gains distributions from the Portfolios are
automatically reinvested in shares of the distributing Portfolio at their Net
Asset Value.

THERE IS NO ASSURANCE THAT ANY OF THE PORTFOLIOS WILL ATTAIN THEIR
RESPECTIVE STATED OBJECTIVES. Additional information concerning the investment
objectives and policies of the Portfolios can be found in the current prospectus
for the Fund accompanying this Prospectus.

THE PROSPECTUS OF THE FUND SHOULD BE READ CAREFULLY BEFORE ANY DECISION IS
MADE CONCERNING THE ALLOCATION OF PURCHASE PAYMENTS TO A PARTICULAR PORTFOLIO.

15
<PAGE>
THE CONTRACTS
- --------------------------------------------------------------------------------

PURCHASE OF THE CONTRACTS

The Company has discontinued the offering of new Contracts. Additional
Purchase Payments to existing Contracts are accepted by the Company. All
subsequent Purchase Payments must be $25 or more and may be made at any time
prior to the Income Starting Date. Additional Purchase Payments may also be made
from your bank account or your Dean Witter Active Assets-TM- Account through
Automatic Additions. Please consult with your Dean Witter Account Executive for
detailed information about Automatic Additions.

The Company reserves the right to limit Purchase Payments in any Contract
Year to three times the initial Purchase Payment made in the first year.

CREDITING OF PURCHASE PAYMENTS
A Purchase Payment accompanied by a duly completed application will be
credited to the Contract within two business days of receipt by the Company at
its home office. If an application is not duly completed, the Company will
credit the Purchase Payments to the Contract within five business days or return
it at that time unless the applicant specifically consents to the Company
holding the Purchase Payment until the application is complete. The Company
reserves the right to reject any application. Subsequent Purchase Payments will
be credited to the Contract at the close of the Valuation Period during which
the Purchase Payment is received.

ALLOCATION OF PURCHASE PAYMENTS

On the application the Owner instructs the Company how to allocate the
Purchase Payment among the twelve Investment Alternatives. Purchase Payments may
be allocated in whole percents, from 0% to 100%, to any Investment Alternative
so long as the total allocation equals 100%. Purchase Payments may be allocated
in amounts no less than $100. Unless the Owner notifies the Company otherwise,
subsequent Purchase Payments are allocated according to the instructions in the
application.

Each Purchase Payment will be credited to the Contract as Variable Account
Accumulation Units equal to the amount of Purchase Payment allocated to each
Sub-Account divided by the Accumulation Unit value for that Sub-Account next
computed after the Purchase Payment is credited to the Contract. For example, if
a $10,000 Purchase Payment is credited to the Contract when the Accumulation
Unit value equals $10, then 1,000 Accumulation Units would be credited to the
Contract. The Variable Account, in turn, purchases shares of the corresponding
Portfolio (see "Value of Variable Account Accumulation Units," pg. 17).

For a brief summary of how Purchase Payments allocated to the Fixed Account
are credited to the Contract, see "The Fixed Account" on pg. 23.

VALUE OF VARIABLE ACCOUNT ACCUMULATION UNITS

The Accumulation Units in each Sub-Account of the Variable Account are
valued separately. The value of Accumulation Units may change each Valuation
Period according to the investment performance of the shares purchased by each
Sub-Account and the deduction of certain expenses and charges.

A Valuation Period is the period between successive Valuation Dates. It
begins at the close of business of each Valuation Date and ends at the close of
business of the next succeeding Valuation Date. A Valuation Date is each day
that the New York Stock Exchange is open for business and any other day in which
there is a sufficient degree of trading in the Variable Account's portfolio
securities that the value of Accumulation or Annuity Units might be materially
affected by changes in the value of the portfolio securities. Valuation Dates do
not include such Federal and non-Federal holidays as are observed by the New
York Stock Exchange. The New York Stock Exchange currently observes the
following holidays: New Year's Day (January 1); President's Day (the third
Monday in February); Good Friday (the Friday before Easter); Memorial Day (the
last Monday in May); Independence Day (July 4); Labor Day (the first Monday in

16
<PAGE>
September); Thanksgiving Day (the fourth Thursday in November); and Christmas
Day (December 25).

The value of an Accumulation Unit in a Sub-Account 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 Sub-Account
for the current Valuation Period. The Net Investment Factor is a number
representing the change on successive Valuation Dates in value of Sub-Account
assets due to investment income, realized or unrealized capital gains or loss,
deductions for taxes, if any, and deductions for the Mortality and Expense Risk
Charge.

TRANSFERS

The Owner may transfer funds among the twelve Investment Alternatives
without charge. THE COMPANY GUARANTEES THAT NO CHARGE WILL EVER BE IMPOSED FOR
TRANSFERS. Transfers must be at least $100 or the total amount in the Investment
Alternative, whichever is less.
Currently transfers out of any Sub-Account before the Income Starting Date
may be made at any time. The Company reserves the right to restrict such
transfers before the Income Starting Date to once every 30 days after the
Contract is issued. However, the Company will notify Owners at least 30 days
prior to restricting transfers.

After the Income Starting Date, transfers among Sub-Accounts of the Variable
Account, or from the Variable Account to the Fixed Account may be made only once
every six months and may not be made during the first six months following the
Income Starting Date.

Transfers may be made pursuant to telephone instructions if the Owner
completes the telephone authorization form on the application or another form
provided by the Company. Telephone transfer requests will be accepted by the
Company if received at (800) 654-2397 by 3:00 p.m. Central Time. Telephone
transfer requests received at any other telephone number or after 3:00 p.m.
Central Time will not be accepted by the Company. Telephone transfer requests
received before 3:00 p.m. Central Time are effected at the next computed value.
Otherwise, transfer requests must be in writing, on a form provided by the
Company.

Transfers may also be made automatically through Dollar Cost Averaging prior
to the Income Starting Date. Dollar Cost Averaging permits the Owner to transfer
a specified amount every month from the Money Market Sub-Account to any other
Sub-Account. Transfers made through Dollar Cost Averaging must be $100 or more.
Dollar Cost Averaging cannot be used to transfer amounts to the Fixed Account.
Please consult with your Dean Witter Account Executive for detailed information
about Dollar Cost Averaging.

Transfers from Sub-Accounts of the Variable Account will be made based on
the Accumulation Unit values next computed after the Company receives the
transfer request at its home office.

For transfers from the Fixed Account, see pg. 24.

SURRENDER AND WITHDRAWALS

The Owner may withdraw all or part of the Contract Value at any time prior
to the earlier of the death of the Annuitant (and any Joint Annuitant), death of
any Owner or the Income Starting Date. The amount available for withdrawal is
the Contract Value next computed after the Company receives the request for a
withdrawal at its home office, less any Surrender Charges, Contract Maintenance
Charges or any remaining charge for premium taxes. Withdrawals from the Variable
Account will be paid within seven days of receipt of the request, subject to
postponement in certain circumstances. See "Delay of Payments," pg. 25. For
withdrawals from the Fixed Account, see pg. 24.

The minimum partial withdrawal is $100. If the Contract Value is less than
$500, or if the Contract Value after a partial withdrawal would be less than
$500, then the Company will treat the request as one for a total surrender of
the Contract and the entire Contract Value, less any charges and premium taxes,
will be paid out.

Partial withdrawals may also be taken automatically through monthly
Automatic Income withdrawals.

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<PAGE>
Automatic Income withdrawals of $100 or more may be requested at any time prior
to the Income Starting Date. Please consult with your Dean Witter Account
Executive for detailed information about Automatic Income withdrawals.

For Qualified Contracts, the Company will, at the request of the Owner,
automatically calculate and withdraw the IRS Required Minimum Distribution.
Please consult with your Dean Witter Account Executive for detailed information
about the Required Minimum Distribution program.

Withdrawals and surrenders may be subject to income tax and a 10% tax
penalty. This tax and penalty is explained in "Federal Tax Matters" on pg. 26.

The full Contract Maintenance Charge will be deducted at the time of total
surrender should the surrender occur on any date other than a Contract
Anniversary. The total amount paid at surrender may be more or less than the
total Purchase Payments due to prior withdrawals, any deductions, and investment
performance.
To complete the partial withdrawals, the Company will cancel Accumulation
Units in an amount equal to the withdrawal and any Surrender Charge and premium
taxes. The Owner must name the Investment Alternative from which the withdrawal
is to be made. If none is named, then the withdrawal request is incomplete and
cannot be honored.

DEFAULT
So long as the Contract Value is not reduced to zero or a withdrawal does
not reduce it to less than $500, the Contract will stay in force until the
Income Starting Date even if no Purchase Payments are made after the first
Purchase Payment.

CHARGES AND OTHER DEDUCTIONS
- --------------------------------------------------------------------------------

DEDUCTIONS FROM PURCHASE PAYMENTS
No deductions are currently made from Purchase Payments. Therefore the full
amount of every Purchase Payment is invested in the Investment Alternative(s) to
increase the potential for investment gain.

CONTRACT MAINTENANCE CHARGE
A Contract Maintenance Charge of $30 is deducted annually from the Contract
Value to reimburse the Company for its actual costs in maintaining each Contract
and the Variable Account. THE COMPANY GUARANTEES THAT THE AMOUNT OF THIS CHARGE
WILL NOT INCREASE OVER THE LIFE OF THE CONTRACT. Maintenance costs include but
are not limited to expenses incurred in billing and collecting Purchase
Payments; keeping records; processing death benefit claims and cash surrenders,
policy changes and proxy statements; calculating Accumulation Unit and Annuity
Unit values; and issuing reports to owners and regulatory agencies. The Company
does not expect to realize a profit from this charge.

On each Contract Anniversary, the Contract Maintenance Charge will be
deducted from the Investment Alternatives in the same proportion that the
Owner's interest in each bears to the total Contract Value. After the Income
Starting Date, a pro rata share of the annual Contract Maintenance Charge will
be deducted from each Income Payment. For example, 1/12 of the $30 or $2.50 will
be deducted if there are twelve Income Payments during the Contract Year. The
Contract Maintenance Charge will be deducted from the amount paid on a total
surrender.

Prior to October 4, 1993, Vantage Computer Systems, Inc. ("Vantage") was
under contract with the Company to provide Contract recordkeeping services. As
of October 4, 1993, the Company provides all Contract recordkeeping services.

MORTALITY AND EXPENSE RISK CHARGE
A Mortality and Expense Risk Charge will be deducted daily at a rate equal
on an annual basis to 1.0% of the daily net assets in the Variable Account and
will be reflected in the net interest rate credited to the assets in the Fixed
Account attributable to the Contracts. THE COMPANY GUARANTEES THAT THE AMOUNT OF
THIS CHARGE WILL NOT INCREASE OVER THE LIFE OF THE CONTRACT. If the Mortality
and Expense Risk Charge is insufficient to cover the

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<PAGE>
Company's mortality costs and excess expenses, the Company will bear the loss.
If the charge is more than sufficient, the Company will retain the balance as
profit. The Company currently expects a profit from this charge. Any such
profit, as well as any other profit realized by the Company and held in its
general account (which supports insurance and annuity obligations), would be
available for any proper corporate purpose, including, but not limited to,
payment distribution expenses.

The mortality risk arises from the Company's guarantee to cover all death
benefits and to make Income Payments in accordance with the annuity tables,
thus, relieving the Annuitants of the risk of outliving funds accumulated for
retirement.

The expense risk arises from the possibility that the Contract Maintenance
and Surrender Charges, both of which are guaranteed not to increase, will be
insufficient to cover actual administrative expenses.

SURRENDER CHARGE (CONTINGENT DEFERRED SALES CHARGE)
The Owner may withdraw the Contract Value any time before the earliest of
the Income Start Date, the death of any Owner or the Annuitant's and any Joint
Annuitant's death.
There are no Surrender Charges on the first withdrawal of each Contract Year
on amounts up to the Free Withdrawal Amount. The Free Withdrawal Amount is 10%
of the amount of Purchase Payments, excluding those made less than one year
before the date of withdrawal. The maximum portion of the Free Withdrawal Amount
which may be withdrawn from the Fixed Account is limited to the proportion that
your value in the Fixed Account bears to your total Contract Value. Amounts
surrendered in excess of the Free Withdrawal Amount may be subject to a
Surrender Charge. Free Withdrawal Amounts not withdrawn in a Contract Year do
not increase the Free Withdrawal Amount in later Contract Years. Surrender
Charges, if applicable, will be deducted from the amount paid.

In certain cases, distributions required by federal tax law (see Statement
of Additional Information for "IRS Required Distribution at Death Rules") may be
subject to a Surrender Charge. Income Payments under Annuity Options with a
specified period of less than 120 months will be subject to a Surrender Charge.

Free Withdrawals and other partial withdrawals will be allocated on a first
in, first out basis to Purchase Payments. For purposes of calculating the amount
of the Surrender Charge, Purchase Payments shall include any earnings
attributable to those payments.

A Surrender Charge will be applied to amounts withdrawn in excess of a Free
Withdrawal Amount as set forth below:

<TABLE>
<CAPTION>
APPLICABLE
ELAPSED TIME SINCE SURRENDER
PURCHASE PAYMENT BEING CHARGE
WITHDRAWN WAS MADE PERCENTAGE
- -------------------------------------------- ------------
<S> <C>
Less than 1 year............................ 6%
1 year, but less than 2 years............... 5%
2 years, but less than 3 years.............. 4%
3 years, but less than 4 years.............. 3%
4 years, but less than 5 years.............. 2%
5 years, but less than 6 years.............. 1%
6 years or more............................. 0%
</TABLE>

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<PAGE>
The cumulative total of all Surrender Charges is guaranteed never to exceed
7% of an Owner's Purchase Payments (not including earnings attributable to those
payments).

Surrender Charges will be used to pay sales commissions and other
promotional or distribution expenses associated with the marketing of the
Contracts. The Company does not anticipate that the Surrender Charges will cover
all distribution expenses in connection with the Contract.

In addition, federal and state income tax may be withheld from withdrawal
and surrender amounts. Certain surrenders may also be subject to a federal tax
penalty. See "Federal Tax Matters," pg. 26.

TAXES

The Company will deduct any state premium taxes incurred or other taxes
incurred relative to the Contract (collectively referred to as "premium taxes")
either (1) at the Income Starting Date, or (2) when a partial surrender in
excess of the Free Withdrawal Amount occurs (in which case a pro rata portion of
the premium taxes will be deducted from the amount paid), or (3) when a total
surrender occurs. Current premium tax rates range from 0 to 3.5%. The Company
reserves the right to deduct any incurred premium taxes from the Purchase
Payments.

At the Income Starting Date, any charge for premium taxes will be deducted
from each Investment Alternative in the proportion that the Owner's interest in
the Investment Alternative bears to the total Contract Value.

DEAN WITTER VARIABLE INVESTMENT SERIES
("FUND") EXPENSES

A complete description of the expenses and deductions from the Portfolios
are found in the Fund's prospectus which is attached to this prospectus.

BENEFITS UNDER THE CONTRACT
- --------------------------------------------------------------------------------

DEATH BENEFITS PRIOR TO THE INCOME STARTING DATE

If any Owner or the Annuitant dies prior to the Income Starting Date, and a
Death Benefit is elected, it will be paid to the Beneficiary. If a Contingent
Annuitant survives the Annuitant or Joint Annuitant, no Death Benefit will be
paid unless the Contingent Annuitant dies before the earlier of the Income
Starting Date or the day on which the Contract Value must be distributed under
the IRS Required Distribution Rules (see below). (For purposes of payment of the
Death Benefit, the Joint Annuitant must have been named prior to January 19,
1985). The Death Benefit will be the greater of: (a) the sum of all Purchase
Payments less any amounts deducted in connection with partial withdrawals,
including any Surrender Charges; or (b) the Contract Value.

The Company will not pay any Death Benefit until it receives Due Proof of
Death. Generally, the Beneficiary may elect an Annuity Option or a lump sum
payment within 180 days after the Company receives Due Proof of Death. If no
election is received within 180 days, a lump sum will be paid automatically.

The value of the Death Benefit will be determined at the end of the
Valuation Period during which the Company receives the later of Due Proof of
Death and an election for either a lump sum payment or an Annuity Option.

DEATH BENEFITS AFTER THE INCOME STARTING DATE

If any Owner, who is not the Annuitant, dies after the Income Starting Date,
payments will continue to be made under the particular income plan. The
Beneficiary will be the recipient of any such payments.

If the Annuitant and Joint Annuitant, if applicable, die after the Income
Starting Date, the Company will pay the Death Benefit, if any, contained in the
particular Annuity Option elected.

20
<PAGE>
INCOME PAYMENTS
- --------------------------------------------------------------------------------

INCOME STARTING DATE

The Income Starting Date is the day that Income Payments will start under
the Contract. The Owner may change the Income Starting Date at any time by
notifying the Company in writing of the change at least 30 days before the
current Income Starting Date. The Income Starting Date must be (a) at least a
month after the Issue Date; (b) the first day of a calendar month; and (c) no
later than the first day of the calendar month after the Annuitant reaches age
85, or the 10th anniversary date, if later.

Unless the Owner notifies the Company in writing otherwise, the Income
Starting Date will be: for Non-Qualified Contracts the later of the first day of
the calendar month after the Annuitant reaches age 85 or the 10th anniversary
date; for Qualified Contracts, April first of the calendar year following the
year in which the Annuitant reaches age 70 1/2.

AMOUNT OF VARIABLE ANNUITY INCOME PAYMENTS

The amount of Variable Annuity Income Payments depends upon the investment
experience of the Portfolios selected by the Owner, any premium taxes, the age
and sex of the Annuitant(s), and the Annuity Option chosen. The Company
guarantees that the Income Payments will not be affected by (1) actual mortality
experience and (2) amount of the Company's administration expenses.

The Contracts offered by this prospectus (except in states which require
unisex annuity tables) contain life annuity tables that provide for different
benefit payments to men and women of the same age. Nevertheless, in accordance
with the U.S. Supreme Court's decision in ARIZONA GOVERNING COMMITTEE V NORRIS,
in certain employment related situations, annuity tables that do not vary on the
basis of sex may be used. Accordingly, if the Contract is to be used in
connection with an employment-related retirement or benefit plan, consideration
should be given, in consultation with legal counsel, to the impact of NORRIS on
any such plan before making any contributions under these Contracts.

The sum of Income Payments may be more or less than the total Purchase
Payments made because (a) Variable Annuity Income Payments vary with the
investment results of the underlying Portfolios; (b) the Owner bears the
investment risk with respect to all amounts allocated to the Variable Account,
and (c) Annuitants may die before the actuarially expected date of death. As
such, the total amount of Income Payments cannot be predicted.

The duration of the Annuity Option may affect the dollar amounts of each
Income Payment. For example, if an Annuity Option guaranteed for life is chosen,
the Income Payments may be greater or less than Income Payments under an Annuity
Option for a specified period depending on the life expectancy of the Annuitant.

If the actual net investment experience is less than the assumed investment
rate, then the dollar amount of the annuity payments will decrease. The dollar
amount of the annuity payments will stay level if the net investment experience
equals the assumed investment rate and the dollar amount of the annuity payments
will increase if the net investment experience exceeds the assumed investment
rate. For purposes of the Variable Annuity Income Payments, the assumed
investment rate is 4%.

If the Contract Value to be applied to an Annuity Option is less than
$2,000, or if the monthly payments determined under the Annuity Option are less
than $20, the Company may pay the Contract Value in a lump sum or change the
payment frequency to an interval which results in Income Payments of at least
$20.

ANNUITY OPTIONS

The Owner may elect a completely Fixed Annuity, a completely Variable
Annuity or a combination Fixed and Variable Annuity. Up to 30 days before the
Income Starting Date, the Owner may change the Annuity Option or request any
other form of annuity agreeable to both the Company and the Owner. Subsequent
changes will not be permitted. If an Annuity

21
<PAGE>
Option is chosen which depends on the Annuitant or Joint Annuitant's life, proof
of age will be required before Income Payments begin. Premium taxes may be
assessed. The Annuity Options include:

ANNUITY OPTION 1 -- LIFE WITH PAYMENTS GUARANTEED FOR 120 MONTHS.

Monthly payments will be made for as long as the Annuitant lives. If the
Annuitant dies before 120 monthly payments have been made, the remainder of the
120 guaranteed monthly payments will be paid to the Owner, or if deceased, to
the surviving Beneficiary.

ANNUITY OPTION 2 -- JOINT AND LAST SURVIVOR

Monthly payments beginning on the Income Starting Date will be made for as
long as either the Annuitant or Joint Annuitant is living. It is possible under
this option that only one monthly payment will be made if the Annuitant and
Joint Annuitant both die before the second payment is made, or only two monthly
payments will be made if they both die before the third payment, and so forth.

ANNUITY OPTION 3 -- PAYMENTS FOR A SPECIFIED PERIOD

Monthly payments beginning on the Income Starting Date will be made for any
specified period of at least 120 months. A Surrender Charge may apply if the
specified period is less than 120 months. Payments under this option do not
depend on the continuation of the Annuitant's life. If the Owner dies before the
end of the specified period, the remaining payments will be paid to the
surviving Beneficiary. The Mortality and Expense Risk Charge is deducted from
the Variable Account even though the Company does not bear any mortality risk.
If Annuity Option 3 is chosen and the proceeds are derived from the Variable
Account, the Owner or Beneficiary may surrender the Contract at any time by
notifying the Company in writing.

In the event that an Annuity Option is not selected, the Company will make
Income Payments in accordance with Annuity Option 1. At the Company's
discretion, other Annuity Options may be available upon request. The Company
currently uses sex-distinct annuity tables. However, if legislation is passed by
Congress or the states, the Company reserves the right to use annuity tables
which do not distinguish on the basis of sex.

THE FIXED ACCOUNT
- --------------------------------------------------------------------------------

CONTRIBUTIONS UNDER THE FIXED PORTION OF THE ANNUITY CONTRACT AND TRANSFERS
TO THE FIXED PORTION BECOME PART OF THE GENERAL ACCOUNT OF THE COMPANY, WHICH
SUPPORTS INSURANCE AND ANNUITY OBLIGATIONS. BECAUSE OF EXEMPTIVE AND
EXCLUSIONARY PROVISIONS, INTERESTS IN THE GENERAL ACCOUNT HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 ("1933 ACT"), NOR IS THE GENERAL
ACCOUNT REGISTERED AS AN INVESTMENT COMPANY UNDER THE INVESTMENT COMPANY ACT OF
1940 ("1940 ACT"). ACCORDINGLY, NEITHER THE GENERAL ACCOUNT NOR ANY INTERESTS
THEREIN ARE GENERALLY SUBJECT TO THE PROVISIONS OF THE 1933 OR 1940 ACTS AND THE
COMPANY HAS BEEN ADVISED THAT THE STAFF OF THE SECURITIES AND EXCHANGE
COMMISSION HAS NOT REVIEWED THE DISCLOSURES IN THIS PROSPECTUS WHICH RELATE TO
THE FIXED PORTION. DISCLOSURES REGARDING THE FIXED PORTION OF THE ANNUITY
CONTRACT AND THE GENERAL ACCOUNT, HOWEVER, MAY BE SUBJECT TO CERTAIN GENERALLY
APPLICABLE PROVISIONS OF THE FEDERAL SECURITIES LAWS RELATING TO THE ACCURACY
AND COMPLETENESS OF STATEMENTS MADE IN PROSPECTUSES.

GENERAL DESCRIPTION

The Fixed Account is made up of all of the general assets of the Company,
other than those in the Variable Account and any other segregated asset account.
Instead of the Owner bearing the investment risk as is the case for amounts in
the Variable Account, the Company bears the full investment risk for all amounts
in the Fixed Account. The Company has sole discretion to invest the assets of
the Fixed Account, subject to applicable law. The Company

22
<PAGE>
guarantees that the amounts allocated to the Fixed Account will be credited
interest at a net effective interest rate of at least 4.0% per year. Currently
the amount of investment income in excess of 4.0% allocated to contracts
participating in the Fixed Account will vary periodically in the sole discretion
of the Company. Any interest held in the Fixed Account does not entitle an Owner
to share in the investment experience of the Fixed Account.

The Company has revised the Fixed Account. Money deposited in the revised
Fixed Account earns interest at the current rate in effect at the time of
allocation or transfer until the first renewal date. The first renewal date is
January 1 following the date of the allocation or transfer into the Fixed
Account. Subsequent renewal dates will be on anniversaries of the first renewal
date. On or about each renewal date, the Company will notify the Owner of the
interest rate(s) for the calendar year then starting. This interest rate will be
guaranteed by the Company for the calendar year and will not be less than 4%.
The Company may declare more than one interest rate for different monies based
upon the date of allocation or transfer to the Fixed Account.

ANY INTEREST CREDITED TO AMOUNTS ALLOCATED TO THE FIXED ACCOUNT IN EXCESS OF
THE GUARANTEED RATE OF 4.0% PER YEAR WILL BE DETERMINED IN THE SOLE DISCRETION
OF THE COMPANY.

TRANSFERS, SURRENDERS, AND WITHDRAWALS
Amounts may be transferred from the Sub-Accounts of the Variable Account to
the Fixed Account, and prior to the Income Starting Date amounts may also be
transferred from the Fixed Account to Sub-Accounts of the Variable Account. No
charge will ever be imposed for such transfers.

Prior to the Income Starting Date, amounts may not be transferred from the
Variable Account to the Fixed Account until thirty days after the Issue Date and
may be transferred thereafter only once every thirty days. However, amounts
invested in the Fixed Account prior to the date that the revised Fixed Account
became available may not be transferred from the Fixed Account until six months
after the Issue Date and those amounts may be transferred only every six months.
The maximum amount which may be transferred from the revised Fixed Account to
the Variable Account is limited to 25% of the value in the revised Fixed Account
as of December 31 of the prior calendar year (except with respect to amounts
which were allocated to the Fixed Account prior to the date of availability).

If the first renewal interest rate is less than the current rate that was in
effect at the time money was allocated or transferred to the revised Fixed
Account, the transfer restriction for that money will be waived during the
60-day period following the first renewal date.

After the Income Starting Date no transfers may be made from the Fixed
Account. Transfers from the Variable Account to the Fixed Account may not be
made for six months after the Income Starting Date and may be made thereafter
only once every six months. The Company reserves the right to waive restrictions
on transfers that are contained in the Contract.

Surrenders and withdrawals from the Fixed Account may be delayed for up to
six months. After the Income Starting Date, no surrenders or withdrawals may be
made from the Fixed Account.

23
<PAGE>
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.

Generally, an Owner who is not a natural person is required to include in
income each year any increase in the cash value to the extent the increase is
attributable to contributions to the Contract made after February 28, 1986.

BENEFICIARY
The Beneficiary can mean either the Owner's Beneficiary or the Annuitant's
Beneficiary, but not both at the same time. Subject to the terms of any existing
assignment or the rights of any irrevocable Beneficiary, the Owner may change
the Owner's Beneficiary or Annuitant's Beneficiary while the Annuitant is living
by notifying the Company in writing. Any change will be effective at the time it
is signed by the Owner, whether or not the Annuitant is living when the change
is received by the Company. The Company will not, however, be liable as to any
payment or settlement made prior to receiving the written notice.

Unless otherwise provided in the Beneficiary designation, the rights of any
Beneficiary predeceasing the Annuitant will revert to the Owner or the Owner's
estate. Multiple Beneficiaries may be named. Unless otherwise provided in the
Beneficiary designation, if more than one Beneficiary survives the Annuitant,
the surviving Beneficiaries will share equally in any amounts due.

DELAY OF PAYMENTS
Payment of any amounts due from the Variable Account under the Contract will
occur within seven days, unless:

1. The New York Stock Exchange is closed for other than usual weekends
or holidays, or trading on the Exchange is otherwise restricted;

2. An emergency exists as defined by the Securities and Exchange
Commission; or

3. The Securities and Exchange Commission permits delay for the
protection of the security holders.

For payment or transfers from the Fixed Account, see pg. 23.

ASSIGNMENTS
The contract may be assigned prior to the Income Starting Date and during
the Annuitant's or, if applicable, Joint Annuitant's lifetime, subject to the
rights of any irrevocable Beneficiary. Any assignment will not be binding until
received in writing by the Company. The Company will not be responsible for
deciding if an assignment is valid or the extent of an assignee's interest. An
assignment may result in income tax liability to the owner.

No Beneficiary may assign benefits under the Contract until they are due
and, to the extent permitted by law, payments are not subject to the debts of
any Beneficiary or to any judicial process for payment of the Beneficiary's
debts.

MODIFICATION
The Company may not modify the Contract without the consent of the Owner
except to make the Contract meet the requirements of the Investment Company Act
of 1940, or to make the Contract comply with any changes in the Internal Revenue
Code or required by the Code or by any other applicable law in order to continue
treatment of the Contract as an annuity.

CUSTOMER INQUIRIES
The Owners or any persons interested in the Contract may make inquiries
regarding the Contract by calling or writing their Dean Witter Account
Executive.

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<PAGE>
FEDERAL TAX MATTERS
- --------------------------------------------------------------------------------

INTRODUCTION

THE FOLLOWING DISCUSSION IS GENERAL AND IS NOT INTENDED AS TAX ADVICE. THE
COMPANY 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 ANNUITIES IN GENERAL

TAX DEFERRAL

Generally, an annuity Contract Owner is not taxed on increases in the
Contract Value until a distribution occurs. This rule applies only where (1) the
Owner is a natural person, (2) the investments of the Variable Account are
"adequately diversified" in accordance with Treasury Department ("Treasury")
regulations and (3) the Company, instead of the annuity Owner, is considered the
Owner of the Variable Account assets for federal income tax purposes.

NON-NATURAL OWNERS

As a general rule, annuity Contracts owned by nonnatural persons are not
treated as annuity Contracts for federal income tax purposes and the income on
such Contracts is taxed as ordinary income received or accrued by the Owner
during the taxable year. There are several exceptions to the general rule for
Contracts owned by non-natural persons which are discussed in the Statement of
Additional Information.

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" in
accordance with the standards provided in the Treasury regulations. If the
investments in the Variable Account are not adequately diversified, then the
Contract will not be treated as an annuity Contract for federal income tax
purposes and the Contract Owner will be taxed on the excess of the Contract
Value over the investment in the Contract. Although the Company does not have
control over the Fund or its investments, the Company expects the Fund to meet
the diversification requirements.

INVESTOR CONTROL

In connection with the issuance of the regulations on the adequate
diversification standards, Treasury announced that the regulations do not
provide guidance concerning the extent to which Contract Owners may direct their
investments among Sub-Accounts of a Variable Account. The Internal Revenue
Service has previously stated in published rulings that a variable contract
Owner will be considered the Owner of separate account assets if the Owner
possesses 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, Treasury announced that guidance would be issued in the future
regarding the extent that Owners could direct their investments among
Sub-Accounts without being treated as Owners of the underlying assets of the
Variable Account. It is possible that Treasury's position, when announced, may
adversely affect the tax treatment of existing Contracts. The Company,
therefore, reserves the right to modify the Contract as necessary to attempt to
prevent the Contract Owner from being considered the federal tax owner of the
assets of the Variable Account.

TAXATION OF PARTIAL AND FULL WITHDRAWALS

In the case of a partial withdrawal under a Non-Qualified Contract, amounts
received are taxable to the extent the Contract Value before the withdrawal
exceeds the investment in the Contract. In the case of a partial withdrawal
under a Qualified Contract, the portion of the payment that bears the same ratio
to the total payment that the investment in the Contract bears to the Contract
Value, can be excluded from income. In the case of a full withdrawal under a
Non-Qualified Contract or a Qualified Contract, the amount

25
<PAGE>
received will be taxable only to the extent it exceeds the investment in the
Contract. If an individual transfers an annuity Contract without full and
adequate consideration to a person other than the individual's spouse (or to a
former spouse incident to a divorce), the Owner will be taxed on the difference
between the Contract Value and the investment in the Contract at the time of
transfer. Other than in the case of certain Qualified Contracts, any amount
received 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 an annuity
Contract provides for the return of the Owner's investment in the Contract in
equal tax-free amounts over the payment period. The balance of each payment
received is taxable. In the case of 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. In the case of 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.

TAXATION OF ANNUITY DEATH BENEFITS

Amounts may be distributed from an annuity Contract because of the death of
an Owner or Annuitant. Generally, such amounts are includible in income as
follows: (1) if distributed in a lump sum, the amounts are taxed in the same
manner as a full withdrawal or (2) if distributed under an annuity option, the
amounts are taxed in the same manner as an annuity payment.

PENALTY TAX ON PREMATURE DISTRIBUTIONS

There is a 10% penalty tax on the taxable amount of any premature
distribution from a Non-Qualified annuity Contract. The penalty tax generally
applies to any distribution made prior to the Owner attaining age 59 1/2.
However, there should be no penalty tax on distributions to Owners (1) made on
or after the Owner attains age 59 1/2; (2) made as a result of the Owner's death
or disability; (3) made in substantially equal periodic payments over life or
life expectancy; or (4) made under an immediate annuity. Similar rules apply for
distributions under certain Qualified Contracts. Please see the Statement of
Additional Information for a discussion of other situations in which the penalty
tax may not apply.

AGGREGATION OF ANNUITY CONTRACTS

All Non-Qualified annuity Contracts issued by the Company (or its
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

Annuity Contracts may be used as investments with certain tax qualified
plans such as: (1) Individual Retirement Annuities under Section 408(b) of the
Code; (2) Simplified Employee Pension Plans under Section 408(k) of the Code;
(3) Tax Sheltered Annuities under Section 403(b) of the Code; (4) Corporate and
Self Employed Pension and Profit Sharing Plans; and (5) State and Local
Government and Tax-Exempt Organization Deferred Compensation Plans. In the case
of certain tax 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 Code provides for tax-deferred retirement savings
plans for employees of certain non-profit and educational organizations. In
accordance with the requirements of Section 403(b), any annuity Contract used
for a 403(b) plan must provide that distributions attributable to salary
reduction contributions made after 12/31/88, and all earnings on salary
reduction contributions, may be made only after the employee attains age 59 1/2,
separates from service, dies, becomes disabled or on the account of hardship
(earnings on salary reduction contributions may not be distributed on the
account of hardship).

26
<PAGE>
INCOME TAX WITHHOLDING

The Company is required to withhold federal income tax at a rate of 20% on
all "eligible rollover distributions" unless an individual elects to make a
"direct rollover" of such amounts to another qualified plan or Individual
Retirement Account or Annuity ("IRA"). Eligible rollover distributions generally
include all distributions from Qualified Contracts, excluding IRAs, with the
exception of (1) required minimum distributions, or (2) a series of
substantially equal periodic payments made over a period of at least 10 years,
or the life (joint lives) of the participant (and beneficiary). For any
distributions from Non-Qualified annuity Contracts, or distributions from
Qualified Contracts which are not considered eligible rollover distributions,
the Company may be required to withhold federal and state income taxes unless
the recipient elects not to have taxes withheld and properly notifies the
Company of such election.

VOTING RIGHTS
- --------------------------------------------------------------------------------

The Owner or anyone with a voting interest in the Sub-Account of the
Variable Account may instruct the Company on how to vote at shareholder meetings
of the Fund. The Company will solicit and cast each vote according to the
procedures set up by the Fund and to the extent required by law. The Company
reserves the right to vote the eligible shares in its own right, if subsequently
permitted by the Investment Company Act of 1940, its regulations or
interpretations thereof.

Before the Income Starting Date, the Owner holds the voting interest in the
Sub-Account. (The number of votes for the Owner will be determined by dividing
the Contract Value attributable to a Sub-Account by the net asset value per
share of the applicable eligible Portfolio.)

After the Income Starting Date, the person receiving Income Payments has the
voting interest. After the Income Starting Date, the votes decrease as Income
Payments are made and as 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 Sub-Account by the net asset value per share of the
corresponding eligible Portfolio.

SALES COMMISSION
- --------------------------------------------------------------------------------

From its profits the Company may pay a maximum sales commission of 5.75% of
Purchase Payments and an annual sales administration expense allowance of up to
0.125% of the average net assets of the Fixed Account to Dean Witter Reynolds
Inc., the principal underwriter of the Contracts. Dean Witter will pay annually
to its Account Executives from its profits, an amount equal to .10% of the net
assets of the Variable Account attributable to Contracts issued and sold after
1984 and any subsequent additions thereon.

27
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
-----
<S> <C>
Introduction....................................................................... 4
Northbrook Life Insurance Company.............................................. 4
Dean Witter Reynolds Inc....................................................... 4
Additions, Deletions or Substitutions of Investments........................... 5
Reinvestment................................................................... 6
The Contract....................................................................... 6
Value of Variable Account Accumulation Units................................... 6
Performance Data............................................................... 7
Transfers...................................................................... 9
Tax-Free Exchanges (1035 Exchanges, Rollovers and Transfers)................... 9
General Matters.................................................................... 15
Incontestability............................................................... 15
Settlements.................................................................... 16
Safekeeping of the Variable Account's Assets................................... 16
Experts........................................................................ 16
Legal Matters.................................................................. 16
Federal Tax Matters................................................................ 16
Introduction................................................................... 16
Taxation of Northbrook Life Insurance Company.................................. 17
Exceptions to the Non-Natural Owner Rule....................................... 17
Penalty Tax on Premature Distributions......................................... 17
IRS Required Distribution at Death Rules....................................... 18
Qualified Plans................................................................ 18
Types of Qualified Plans....................................................... 18
Individual Retirement Annuities............................................ 18
Simplified Employee Pension Plans.......................................... 19
Tax Sheltered Annuities.................................................... 19
Corporate & Self-Employed & Pension & Profit Savings Plan.................. 19
State & Local Government & Tax-Exempt Organization Deferred Compensation
Plans..................................................................... 19
Voting Rights...................................................................... 20
Sales Commissions.................................................................. 20
Financial Statements............................................................... F-1
</TABLE>

28
<PAGE>
ORDER FORM

/ / Please send me a copy of the most recent Statement of Additional Information
for the Northbrook Variable Annuity Account.

<TABLE>
<S> <C>
- ------------------------ ---------------------------------------------
(Date) (Name)

---------------------------------------------
(Street Address)

---------------------------------------------
(City) (State) (Zip Code)
</TABLE>

Send to: Northbrook Life Insurance Company
P.O. Box 94040
Palatine, IL 60094-4040

Attn: Annuity Services

29
<PAGE>
(This Page Left Intentionally Blank)
<PAGE>

STATEMENT OF ADDITIONAL INFORMATION

NORTHBROOK VARIABLE ANNUITY ACCOUNT

NORTHBROOK LIFE INSURANCE COMPANY
P.O. BOX 94040
PALATINE, IL 60094-4040

INDIVIDUAL VARIABLE ANNUITY CONTRACTS

DISTRIBUTED BY

DEAN WITTER REYNOLDS INC.
TWO WORLD TRADE CENTER
NEW YORK, NEW YORK 10048
-------------------

This Statement of Additional Information supplements the information in the
Prospectus for the Flexible
Premium Deferred Variable Annuity Contract ("Contract") offered by Northbrook
Life Insurance Company ("Company"), a wholly-owned subsidiary of Allstate Life
Insurance Company. The Contract is primarily designed to aid individuals in
long-term financial planning and it can be used for retirement planning
regardless of whether the plan qualifies for special federal income tax
treatment.

THIS STATEMENT OF ADDITIONAL INFORMATION IS NOT A PROSPECTUS AND SHOULD BE READ
ONLY IN CONJUNCTION WITH THE PROSPECTUS FOR THE CONTRACT.

YOU MAY OBTAIN A COPY OF THE PROSPECTUS FROM DEAN WITTER REYNOLDS INC.
("DEAN WITTER"), THE PRINCIPAL UNDERWRITER AND DISTRIBUTOR OF THE CONTRACT, BY
CALLING OR WRITING DEAN WITTER AT THE ADDRESS LISTED ABOVE.

The Prospectus, dated May 1, 1996, has been filed with the United States
Securities and Exchange Commission.

DATED MAY 1, 1996

<PAGE>
TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
---------
<S> <C>
Introduction.............................................................................. 3
Northbrook Life Insurance Company..................................................... 3
Dean Witter Reynolds Inc.............................................................. 3
Additions, Deletions or Substitutions of Investments................................ 3
Reinvestment........................................................................ 3
The Contract.............................................................................. 3
Value of Variable Account Accumulation Units.......................................... 3
Performance Data.......................................................................... 4
Transfers............................................................................. 5
Tax-Free Exchanges (1035)............................................................. 5
General Matters........................................................................... 5
Incontestability...................................................................... 5
Settlements........................................................................... 5
Safekeeping of the Variable Account's Assets.......................................... 5
Experts............................................................................... 5
Legal Matters......................................................................... 6
Federal Tax Matters....................................................................... 6
Introduction.......................................................................... 6
Taxation of Northbrook Life Insurance Company......................................... 6
Exceptions to the Non-Natural Owner Rule.............................................. 6
Penalty Tax on Premature Distributions................................................ 7
IRS Required Distribution at Death Rules.............................................. 7
Qualified Plans....................................................................... 7
Types of Qualified Plans.................................................................. 7
Individual Retirement Annuities....................................................... 7
Simplified Employee Pension Plans..................................................... 7
Tax Sheltered Annuities............................................................... 7
Corporate and Self-Employed Pension and Profit Sharing Plans.......................... 8
State and Local Government and Tax-Exempt Organization Deferred Compensation Plans.... 8
Voting Rights............................................................................. 8
Sales Commissions......................................................................... 8
Financial Statements...................................................................... F-1
</TABLE>

2
<PAGE>

INTRODUCTION

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

NORTHBROOK LIFE INSURANCE COMPANY

Incorporated in 1978 as a life insurance company under the laws of the State
of Illinois, Northbrook Life Insurance Company ("Company") has done business
continuously since that time as "Northbrook Life Insurance Company." The
Company's products, annuities and individual life insurance, have been approved
by the various states where offered.

DEAN WITTER REYNOLDS INC.

Dean Witter Reynolds Inc. ("Dean Witter") is the principal underwriter and
distributor of the Contracts. Dean Witter is a wholly-owned subsidiary of Dean
Witter, Discover & Co. Dean Witter is located at Two World Trade Center, New
York, New York Dean Witter is a member of the New York Stock Exchange and the
National Association of Securities Dealers, Inc., and its subsidiary, Dean
Witter InterCapital, Inc. ("InterCapital"), is registered with the Securities
and Exchange Commission as an investment advisor.

ADDITIONS, DELETIONS OR SUBSTITUTIONS OF
INVESTMENTS

The Company retains the right, subject to any applicable law, to make
additions to, deletions from or substitutions for the Portfolio shares held by
any Sub-Account of the Variable Account. The Company reserves the right to
eliminate the shares of any of the Portfolios and to substitute shares of
another Portfolio of the Fund, or of another open-end, registered investment
company, if the shares of the Portfolio are no longer available for investment,
or if, in the Company's judgment, investment in any Portfolio would become
inappropriate in view of the purposes of the Variable Account. Substitutions of
shares attributable to an Owner's interest in a Sub-Account will not be made
until the Owner has been notified of the change, and until the Securities and
Exchange Commission has approved the change, to the extent such notification and
approval is 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.

The Company may also establish additional Sub-Accounts of the Variable
Account. Each additional Sub-Account would purchase shares in a new Portfolio of
the Fund or in another mutual fund. New Sub-Accounts may be established when, in
the sole discretion of the Company, marketing needs or investment conditions
warrant. Any new Sub-Accounts will be made available to existing Contract Owners
on a basis to be determined by the Company. The Company may also eliminate one
or more Sub-Accounts if, in its sole discretion, marketing, tax or investment
conditions so warrant.

In the event of any such substitution or change, the Company 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
of 1940 or it may be deregistered under such Act in the event such registration
is no longer required.

REINVESTMENT

All dividends and capital gains distributions from the Portfolios are
automatically reinvested in shares of the distributing Portfolio at their net
asset value.

THE CONTRACT

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

3
<PAGE>

VALUE OF VARIABLE ACCOUNT ACCUMULATION UNITS

The value of Variable Account Accumulation Units will vary in accordance
with investment experience of the Portfolio in which the Sub-Account invests.
The number of such Accumulation Units credited to a Contract will not, however,
change as a result of any fluctuations in the value of the Accumulation Unit.

The Accumulation Units in each Sub-Account of the Variable Account are
valued separately. The value of Accumulation Units in any Valuation Period will
depend upon the investment performance of the shares purchased by each
Sub-Account in a particular Portfolio.

The value of an Accumulation Unit in a Sub-Account for any Valuation Period
equals the value of such unit as of the immediately preceding Valuation Period,
multiplied by the "Net Investment Factor" for that Sub-Account for the current
Valuation Period. The Net Investment Factor for each Sub-Account for any
Valuation Period is determined by dividing (A) by (B) and subtracting (C),
where:

(A) is the sum of:

(1) the net asset value per share of the Portfolio(s) underlying the
Sub-Account determined at the end of the current valuation period; plus,

(2) the per share amount of any dividend or capital gain distributions
made by the Portfolio(s) underlying the Sub-Account during the current
valuation period.

(B) is the net asset value per share of the Portfolio(s) underlying the
Sub-Account determined as of the end of the immediately preceding valuation
period.

(C) is the annualized Mortality and Expense Risk Charges divided by 365
and then multiplied by the number of calendar days in the current valuation
period.

PERFORMANCE DATA
From time to time the Variable Account may publish advertisements containing
performance data relating to its Sub-Accounts. The performance data for the
Sub-Accounts (other than for the Money Market Sub-Account) will always be
accompanied by total return quotations.

A Sub-Account's "average annual total return" represents an annualization of
the Sub-Account's total return over a particular period and is computed by
finding the annual percentage rate which will result in the ending redeemable
value of a hypothetical $1,000 Purchase Payment made at the beginning of a one,
five or ten year period, or for a period from the date of commencement of the
Sub-Account's operations, if shorter than any of the foregoing. The formula for
computing the average annual total return involves a percentage obtained by
dividing the ending redeemable value, including deductions for any Surrender
Charges or Contract Maintenance Charges imposed on the Contracts by the Variable
Account, by the initial hypothetical $1,000 Purchase Payment, taking the "n"th
root of the quotient (where "n" is the number of years in the period) and
subtracting 1 from the result.

The Surrender Charges assessed on this redemption were computed as follows.
For Contracts that have passed their first Contract Anniversary, the Free
Withdrawal Amount is not assessed a Surrender Charge. Surrender Charges are
charged on the amount of redemption equal to the value of the Purchase Payment,
reduced by the Free Withdrawal Amount, if any. The Surrender Charge schedule
specifies one rate for less than one year and another rate for one year, but
less than two years, and another rate for two years, but less than three years,
and so on until six years or more. For a one year total return calculation the
second rate (i.e., one year, but less than two years) is assessed. The Contract
Maintenance Charge ($30 per contract) used in the total return calculation is
prorated using the following method: The total amount of annual contract fees
collected during the year is divided by the total average net assets of all the
Sub-Accounts. The resulting percentage is then multiplied by the initial
hypothetical $1,000 Purchase Payment.

In addition, the Variable Account may advertise the total return over
different periods of time by means

4
<PAGE>

of aggregate, average, year-by-year or other types of total return figures. Such
calculations may or may not reflect the deductions of some or all of the charges
which may be imposed on the Contracts by the Variable Account which, if
reflected, would reduce the performance quoted. The formula for computing such
total return quotations involves a percent unit change calculation. This
calculation is the Accumulation Unit value at the end of the defined period
divided by the Accumulation Unit value at the beginning of such period minus 1.
The periods included in such advertisements may include among others
"year-to-date" (prior calendar year end to the day of the advertisement); "year
to most recent quarter" (prior calendar year end to the end of the most recent
quarter); "the prior calendar year"; and "Inception (commencement of the
Sub-Account's operation) to-date" (day of the advertisement).

The Variable Account may also advertise the performance of the Sub-Accounts
relative to certain performance rankings and indexes compiled by independent
organizations.

TRANSFERS

Currently the Company is not enforcing certain restrictions on transfers
and, therefore, prior to the Income Starting Date amounts may be transferred out
of Sub-Accounts of the Variable Account at any time. The restrictions in the
Contracts, which could be enforced in the future, provide that transfers among
Sub-Accounts of the Variable Account, or from the Variable Account to the Fixed
Account, may not be made for the first 30 days after the Contract is issued and
thereafter such transfers may occur only once every 30 days. The Company
reserves the right to enforce these restrictions in the future. However, the
Company will notify Owners at least 30 days prior to enforcing these
restrictions.
TAX-FREE EXCHANGES (SECTION 1035)

The Company accepts Purchase Payments which are the proceeds of a 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 Contract, the Company does not differentiate between Section 1035
Purchase Payments and non-1035 Purchase Payments.

The Company also accepts "rollovers" from Contracts qualifying as
tax-sheltered annuities (TSAs), individual retirement annuities or accounts,
(IRAs), or any other qualified contract which is eligible to "rollover" into an
IRA. The Company differentiates between non-qualified Contracts and TSAs and
IRAs to the extent necessary to comply with federal tax laws. For example, the
Company restricts the assignment, transfer or pledge of TSAs and IRAs so the
Contracts will continue to qualify for special tax treatment.

GENERAL MATTERS

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

INCONTESTABILITY

The Contract will not be contested after it is issued.

SETTLEMENTS

The Contract must be returned to the Company prior to any settlement. Due
proof of any Owner's or Annuitant's (and any Joint Annuitant's) death must be
received prior to settlement of a death claim.

SAFEKEEPING OF THE VARIABLE ACCOUNT'S ASSETS

The Company holds title to the assets of the Variable Account. The assets
are kept physically segregated and held separate and apart from the Company's
general corporate assets. Records are maintained of all purchases and
redemptions of the Portfolio shares held by each of the Sub-Accounts.

The Dean Witter Variable Investment Series ("Fund") does not issue
certificates and, therefore, the Company holds the Account's assets in open
account in lieu of stock certificates. See the

5
<PAGE>

Fund's Prospectus for a more complete description of the Fund's custodian.

EXPERTS

The financial statements of the Variable Account and the financial
statements and financial statement schedule of the Company appearing in this
Statement of Additional Information (which is incorporated by reference in the
prospectus of Northbrook Variable Annuity Account of Northbrook Life Insurance
Company) have been audited by Deloitte & Touche LLP, Two Prudential Plaza, 180
N. Stetson Avenue, Chicago, Illinois, independent auditors, as stated in their
reports appearing herein and are included in reliance upon the reports of such
firm given upon their authority as experts in accounting and auditing.

LEGAL MATTERS

Certain legal matters relating to the federal securities laws applicable to
the issue and sale of the Contracts have been passed upon by Routier and
Johnson, P.C., of Washington, D.C. All matters of Illinois law pertaining to the
Contracts, including the validity of the Contracts and the Company's right to
issue such Contracts under Illinois insurance law, have been passed upon by
Michael J. Velotta, General Counsel of Northbrook Life Insurance Company.

FEDERAL TAX MATTERS

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

INTRODUCTION

THE FOLLOWING DISCUSSION IS GENERAL AND IS NOT INTENDED AS TAX ADVICE. THE
COMPANY 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 NORTHBROOK LIFE INSURANCE COMPANY

The Company is taxed as a life insurance company under Part I of Subchapter
L of the Internal Revenue Code. The following discussion assumes that the
Company is taxed as a life insurance company under Part I of Subchapter L. Since
the Variable Account is not an entity separate from the Company, and its
operations form a part of the Company, it will not be taxed separately as a
"regulated Investment Company" under Subchapter M of the Code. Investment income
and realized capital gains are automatically applied to increase reserves under
the contract. Under existing federal income tax law, the Company believes that
the Variable Account investment income and realized net capital gains will not
be taxed to the extent that such income and gains are applied to increase the
reserves under the contract.

Accordingly, the Company does not anticipate that it will incur any federal
income tax liability attributable to the Variable Account, and therefore the
Company does not intend to make provisions for any such taxes. However, if
changes in the federal tax laws or interpretations thereof result in the Company
being taxed on income or gains attributable to the Variable Account, then the
Company may impose a charge against the Variable Account (with respect to some
or all contracts) in order to set aside provisions to pay such taxes.

EXCEPTIONS TO THE NON-NATURAL OWNER RULE

There are several exceptions to the general rule that contracts held by a
non-natural owner are not treated as annuity contracts for federal income tax
purposes. Contracts will generally be treated as held by a natural person if the
nominal owner is a trust or other entity which holds the contract as agent for a
natural person. However, this special exception will not apply in the case of an
employer who is the nominal owner of an annuity contract under a non-qualified
deferred compensation arrangement for its employees. Other exceptions to the
non-natural owner rule are: (1) contracts acquired by an estate of a

6
<PAGE>

decedent by reason of the death of the decedent; (2) certain qualified
contracts; (3) contracts purchased by employers upon the termination of certain
qualified plans; (4) certain contracts used in connection with structured
settlement agreements, and (5) 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.

PENALTY TAX ON PREMATURE DISTRIBUTIONS

There is a 10% penalty tax on the taxable amount of any payment received
from a non-qualified annuity contract unless: (1) made after the owner reaches
59 1/2; (2) attributable to the owner's disability; (3) attributable to
investment before August 14, 1982, including earnings on pre-August 14, 1982
investment; (4) made from certain qualified contracts; (5) made after the death
of the owner; (6) made under an immediate annuity contract; (7) made from an
annuity purchased and held by an employer upon the termination of a qualified
retirement plan; (8) made under a qualified funding asset; (9) made as part of a
series of substantially equal periodic payments (not less frequently than
annually) for the life of or life expectancy of the owner or the joint lives of
joint life expectancies of the owner and designated beneficiary. Similar rules
apply in the case of qualified contracts.

IRS REQUIRED DISTRIBUTION AT DEATH RULES

In order to be considered an annuity contract for federal income tax
purposes, an annuity contract must provide: (1) if any 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 the
owner's death; (2) if any owner dies prior to the annuity start date, the entire
interest in the contract will be distributed within five years after the date of
the owner's death. These requirements are satisfied if any portion of the
owner's interest which is payable to (or for the benefit of) 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 owner's death. If the owner's
designated beneficiary is the surviving spouse of the owner, the contract may be
continued with the surviving spouse as the new owner. If the owner of the
contract is a non-natural person, then the annuitant will be treated as the
owner for purposes of applying the distribution at death rules. In addition, a
change in the annuitant on a contract owned by a non-natural person will be
treated as the death of the owner.

QUALIFIED PLANS

This annuity contract may be used with several types of qualified plans. The
tax rules applicable to participants in such qualified plans vary according to
the type of plan and the terms and conditions of the plan itself. Adverse tax
consequences may result from excess contributions, premature distributions,
distributions that do not conform to specified commencement and minimum
distribution rules, excess distributions and in other circumstances. Owners and
participants under the plan and annuitants and beneficiaries under the contract
may be subject to the terms and conditions of the plan regardless of the terms
of the contract.

TYPES OF QUALIFIED PLANS

INDIVIDUAL RETIREMENT ANNUITIES

Section 408 of the Code permits eligible individuals to contribute to an
individual retirement program known as an Individual Retirement Annuity.
Individual Retirement Annuities 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 Individual Retirement Annuity.

SIMPLIFIED EMPLOYEE PENSION PLANS

Section 408(k) of the Code allows employers to establish simplified employee
pension plans for their employees using the employees' individual retirement
annuities if certain criteria are met. Under these plans the employer may,
within specified limits, make deductible contributions on behalf of the
employees to their individual retirement annuities.

7
<PAGE>

TAX SHELTERED ANNUITIES

Section 403(b) of the Code permits public school employees and employees of
certain types of tax-exempt organizations (specified in Section 501(c)(3) of the
Code) to have their employers purchase annuity contracts for them, and subject
to certain limitations, to exclude the purchase payments from the employees'
gross income. An annuity contract used for a Section 403(b) plan must provide
that distributions attributable to salary reduction contributions made after
12/31/88, and all earnings on salary reduction contributions, may be made only
after the employee attains age 59 1/2, separates from service, dies, becomes
disabled or in the case of hardship (earnings on salary reduction contributions
may not be distributed for hardship).

CORPORATE AND SELF-EMPLOYED PENSION AND PROFIT SHARING PLANS

Sections 401(a) and 403(a) of the Code permit corporate employers to
establish various types of tax favored retirement plans for employees. The Self-
Employed Individuals Retirement Act of 1962, as amended, (commonly referred to
as "H.R. 10" or "Keogh") permits self-employed individuals to establish tax
favored retirement plans for themselves and their employees. Such retirement
plans may permit the purchase of annuity contracts in order to provide benefits
under the plans.

STATE AND LOCAL GOVERNMENT AND TAX-EXEMPT ORGANIZATION DEFERRED COMPENSATION
PLANS

Section 457 of the 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. Generally, under the non-natural owner rules, such contracts
are not treated as annuity contracts for federal income tax purposes.

VOTING RIGHTS

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

The number of votes which a person has the right to instruct will be
calculated separately for each Sub-Account. That number will be determined by
applying his/her percentage interest, if any, in a particular Sub-Account to the
total number of votes attributable to the Sub-Account.

The number of votes of the Portfolio which an Owner has a right to instruct
will be determined as of the date coincident with the date established by that
Portfolio for determining shareholders eligible to vote at the meeting of the
Fund. Voting instructions will be solicited by written communication prior to
such meeting in accordance with procedures established by the Fund.

Fund shares as to which no timely instructions are received will be voted in
proportion to the voting instructions which are received with respect to all
Contracts participating in that Sub-Account. Voting instructions to abstain on
any item to be voted upon will be applied on a pro rata basis to reduce the
votes eligible to be cast.

Each person having a voting interest in a Sub-Account will receive proxy
material, reports and other materials relating to the appropriate Portfolio.

SALES COMMISSIONS

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

The Company pays Dean Witter for its underwriting and general agent's
services a sales commission of up to 5.75% of the Purchase Payments and sales
administration expense allowance of up to 0.125% of the Average Net Assets of
the Fixed Account. These

8
<PAGE>

commissions are intended to cover Dean Witter's expenses in distributing and
selling the Contracts.

Under the Underwriting Agreement and Managing General Agent's Agreement
between Dean Witter and the Company, Dean Witter is responsible for paying costs
and expenses associated with licensing its agents, paying agent's commissions,
printing, mailing and distributing the Prospectus to prospective purchasers; and
preparing, printing and distributing sales literature. In the event the
commissions fail to adequately compensate Dean Witter for these expenses, Dean
Witter will pay these expenses from its own funds.

9
<PAGE>

INDEPENDENT AUDITORS' REPORT

TO THE BOARD OF DIRECTORS AND SHAREHOLDER OF
NORTHBROOK LIFE INSURANCE COMPANY:

We have audited the accompanying Statements of Financial Position of Northbrook
Life Insurance Company as of December 31, 1995 and 1994, and the related
Statements of Operations, Shareholder's Equity and Cash Flows for each of the
three years in the period ended December 31, 1995. Our audits also included
Schedule IV -- Reinsurance. These financial statements and financial statement
schedule are the responsibility of the Company's management. Our responsibility
is to express an opinion on these financial statements and financial statement
schedule based on our audits.

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

In our opinion, such financial statements present fairly, in all material
respects, the financial position of Northbrook Life Insurance Company as of
December 31, 1995 and 1994, and the results of its operations and its cash flows
for each of the three years in the period ended December 31, 1995 in conformity
with generally accepted accounting principles. Also, in our opinion, Schedule IV
- -- Reinsurance, when considered in relation to the basic financial statements
taken as a whole, presents fairly, in all material respects, the information set
forth therein.

As discussed in Note 3 to the financial statements, in 1993 the Company changed
its method of accounting for investment in fixed income securities.

/s/ DELOITTE & TOUCHE LLP

Chicago, Illinois
March 1, 1996

F-1
<PAGE>

NORTHBROOK LIFE INSURANCE COMPANY
STATEMENTS OF FINANCIAL POSITION

<TABLE>
<CAPTION>
DECEMBER 31,
--------------------------
1995 1994
------------ ------------
($ IN THOUSANDS)
<S> <C> <C>
Assets
Investments
Fixed income securities
Available for sale, at fair value (amortized cost $59,142 and $61,581)............... $ 63,229 $ 59,191
Short-term............................................................................. 8,049 3,374
------------ ------------
Total investments.................................................................. 71,278 62,565
Reinsurance recoverable from Allstate Life Insurance Company............................. 2,636,981 3,085,781
Cash..................................................................................... 87 59
Deferred income taxes.................................................................... 77
Net receivable from Allstate Life Insurance Company...................................... 6,183 8,895
Other assets............................................................................. 2,164 2,233
Separate Accounts........................................................................ 3,354,910 2,604,623
------------ ------------
Total assets....................................................................... $ 6,071,603 $ 5,764,233
------------ ------------
------------ ------------
Liabilities
Reserve for life insurance policy benefits............................................... $ 139,509 $ 134,942
Contractholder funds..................................................................... 2,497,278 2,950,532
Income taxes payable..................................................................... 233 4,634
Deferred income taxes.................................................................... 2,798
Separate Accounts........................................................................ 3,354,910 2,604,623
------------ ------------
Total liabilities.................................................................. 5,994,728 5,694,731
------------ ------------
Shareholder's equity
Common stock ($100 par value, 25,000 shares authorized, issued and outstanding).......... 2,500 2,500
Additional capital paid-in............................................................... 56,600 56,600
Unrealized net capital gains (losses).................................................... 2,657 (1,553)
Retained income.......................................................................... 15,118 11,955
------------ ------------
Total shareholder's equity......................................................... 76,875 69,502
------------ ------------
Total liabilities and shareholder's equity......................................... $ 6,071,603 $ 5,764,233
------------ ------------
------------ ------------
</TABLE>

See notes to financial statements.

F-2
<PAGE>

NORTHBROOK LIFE INSURANCE COMPANY
STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-------------------------------
1995 1994 1993
--------- --------- ---------
($ IN THOUSANDS)
<S> <C> <C> <C>
Revenues
Net investment income................................................................... $ 4,782 $ 2,881 $ 2,934
Realized capital gains and losses....................................................... 67 (193) 323
--------- --------- ---------
Income before income taxes................................................................ 4,849 2,688 3,257
Income tax expense........................................................................ 1,686 955 750
--------- --------- ---------
Net income................................................................................ $ 3,163 $ 1,733 $ 2,507
--------- --------- ---------
--------- --------- ---------
</TABLE>

See notes to financial statements.

F-3
<PAGE>

NORTHBROOK LIFE INSURANCE COMPANY
STATEMENTS OF SHAREHOLDER'S EQUITY

<TABLE>
<CAPTION>
UNREALIZED
ADDITIONAL NET CAPITAL
COMMON CAPITAL GAINS RETAINED
STOCK PAID-IN (LOSSES) INCOME TOTAL
----------- ----------- ----------- --------- ---------
($ IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
Balance, December 31, 1992.................................. $ 2,500 $ 31,600 $ 7,715 $ 41,815
Net income................................................ 2,507 2,507
Change in unrealized net capital gains and losses......... $ 747 747
----------- ----------- ----------- --------- ---------
Balance, December 31, 1993.................................. 2,500 31,600 747 10,222 45,069
Net income................................................ 1,733 1,733
Change in unrealized net capital gains and losses......... (2,300) (2,300)
Capital contribution...................................... 25,000 25,000
----------- ----------- ----------- --------- ---------
Balance, December 31, 1994.................................. 2,500 56,600 (1,553) 11,955 69,502
Net income................................................ 3,163 3,163
Change in unrealized net capital gains and losses......... 4,210 4,210
----------- ----------- ----------- --------- ---------
Balance, December 31, 1995.................................. $ 2,500 $ 56,600 $ 2,657 $ 15,118 $ 76,875
----------- ----------- ----------- --------- ---------
----------- ----------- ----------- --------- ---------
</TABLE>

See notes to financial statements.

F-4
<PAGE>

NORTHBROOK LIFE INSURANCE COMPANY
STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
----------------------------------
1995 1994 1993
---------- ---------- ----------
($ IN THOUSANDS)
<S> <C> <C> <C>
Cash flows from operating activities
Net income....................................................................... $ 3,163 $ 1,733 $ 2,507
Adjustments to reconcile net income to net cash from operating activities
Realized capital (gains) losses................................................ (67) 193 (323)
Amortization and other non-cash items.......................................... 903 640 415
Net change in reserve for policy benefits and contractholder funds............. 113 (58) 18,338
Change in deferred income taxes................................................ 608 (114) 1,227
Changes in other operating assets and liabilities.............................. (2,705) (3,835) (19,325)
---------- ---------- ----------
Net cash from operating activities........................................... 2,015 (1,441) 2,839
---------- ---------- ----------
Cash flows from investing activities
Fixed income securities
Proceeds from sales............................................................ 5,423 1,256 14,279
Investment collections......................................................... 7,108 7,626 10,375
Investment purchases........................................................... (9,843) (36,071) (29,778)
Change in short-term investments, net............................................ (4,675) 3,475 2,369
---------- ---------- ----------
Net cash from investing activities........................................... (1,987) (23,714) (2,755)
---------- ---------- ----------
Cash flows from financing activities
Capital contribution............................................................. 25,000
---------- ---------- ----------
Net cash from financing activities........................................... 25,000
---------- ---------- ----------
Net increase (decrease) in cash.................................................... 28 (155) 84
Cash at beginning of year.......................................................... 59 214 130
---------- ---------- ----------
Cash at end of year................................................................ $ 87 $ 59 $ 214
---------- ---------- ----------
---------- ---------- ----------
</TABLE>

See notes to financial statements.

F-5
<PAGE>

NORTHBROOK LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS
($ IN THOUSANDS)

1. ORGANIZATION AND NATURE OF OPERATIONS

Northbrook Life Insurance Company (the "Company") is wholly owned by
Allstate Life Insurance Company ("Allstate Life"), which is wholly owned by
Allstate Insurance Company ("Allstate"), a wholly-owned subsidiary of The
Allstate Corporation (the "Corporation"). On June 30, 1995, Sears, Roebuck and
Co. ("Sears") distributed its 80.3% ownership in the Corporation to Sears common
shareholders through a tax-free dividend (the "Distribution").

The Company develops and markets single and flexible premium annuities and
flexible premium deferred and variable annuity contracts to individuals in the
United States through Dean Witter Reynolds ("Dean Witter")(Note 4). Other
products include universal life and single premium life insurance.

Annuity contracts issued by the Company are subject to discretionary
withdrawal or surrender by the contractholder, subject to applicable surrender
charges. These contracts are reinsured with Allstate Life (Note 4) which selects
assets to meet the anticipated cash flow requirements of the assumed
liabilities. Allstate Life utilizes various modeling techniques in managing the
relationship between assets and liabilities and employs strategies to maintain
investments which are sufficiently liquid to meet obligations to contractholders
in various interest rate scenarios.

The Company monitors economic and regulatory developments which have the
potential to impact its business. Currently there is proposed federal
legislation which would permit banks greater participation in securities
businesses, which could eventually present an increased level of competition for
sales of the Company's annuity contracts. Furthermore, the federal government
may enact changes which could possibly eliminate the tax-advantaged nature of
annuities or eliminate consumers' need for tax deferral, thereby reducing the
incentive for customers to purchase the Company's products. While it is not
possible to predict the outcome of such issues with certainty, management
evaluates the likelihood of various outcomes and develops strategies, as
appropriate, to respond to such challenges.

Certain reclassifications have been made to the prior year financial
statements to conform to the presentation for the current year.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

LIFE INSURANCE ACCOUNTING

The Company writes long-duration insurance contracts with terms that are not
fixed and guaranteed and single premium life insurance contracts, which are
considered universal life-type contracts. The Company also sells long-duration
contracts that do not involve significant risk of policyholder mortality or
morbidity (principally single and flexible premium annuities, structured
settlement annuities and supplemental contracts when sold without life
contingencies) which are considered investment contracts. Limited payment
contracts (policies with premiums paid over a period shorter than the contract
period), primarily consist of structured settlement annuities and supplemental
contracts when sold with life contingencies.

F-6
<PAGE>

NORTHBROOK LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
($ IN THOUSANDS)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

TRADITIONAL LIFE

The reserve for life insurance policy benefits, which relates to structured
settlement annuities and supplementary contracts when sold with life
contingencies, is computed on the basis of assumptions as to future investment
yields, mortality, morbidity, terminations and expenses. These assumptions,
which for traditional life are applied using the net level premium method,
include provisions for adverse deviation and generally vary by such
characteristics as plan, year of issue and policy duration. Reserve interest
rates ranged from 7.3% to 9.5% during 1995.

UNIVERSAL LIFE-TYPE CONTRACTS

Reserves for universal life-type contracts are established using the
retrospective deposit method. Under this method, liabilities are equal to the
account balance that accrues to the benefit of the policyholder.

CONTRACTHOLDER FUNDS

Contractholder funds arise from the issuance of individual contracts that
include an investment component, including universal life-type contracts.
Payments received are recorded as interest-bearing liabilities. Contractholder
funds are equal to deposits received and interest accrued to the benefit of the
contractholder less withdrawals, mortality charges and administrative expenses.
During 1995, credited interest rates on contractholder funds ranged from 3.0% to
8.0% for those contracts with fixed interest rates and from 3.0% to 8.7% for
those with flexible rates.

SEPARATE ACCOUNTS

The Company issues flexible premium deferred variable annuity contracts, the
assets and liabilities of which are legally segregated and reflected in the
accompanying statements of financial position as assets and liabilities of the
Separate Accounts. Assets and liabilities of the Separate Accounts represent
funds of Northbrook Variable Annuity Account and Northbrook Variable Annuity
Account II ("Separate Accounts"), unit investment trusts registered with the
Securities and Exchange Commission. The assets of the Separate Accounts are
carried at fair value. Investment income and realized gains and losses of the
Separate Accounts accrue directly to the contractholders and, therefore, are not
included in the accompanying statements of operations. Revenues to the Company
from the Separate Accounts consist of contract maintenance fees, administrative
fees and mortality and expense risk charges, which are entirely ceded to
Allstate Life.

REINSURANCE

Premiums, contract charges, credited interest, and policy benefits are ceded
and reflected net of such cessions in the statements of operations. Reinsurance
recoverable and the related reserves for policy benefits and contractholder
funds are reported separately in the statements of financial position.

INVESTMENTS

Fixed income securities include bonds and mortgage-backed securities. Fixed
income securities are carried at fair value. The difference between amortized
cost and fair value, net of deferred income taxes, is reflected as a

F-7
<PAGE>

NORTHBROOK LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
($ IN THOUSANDS)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

component of shareholder's equity. Provisions are made to write down the value
of fixed income securities for declines in value that are other than temporary.
Such writedowns are included in realized capital gains and losses.

Short-term investments are carried at cost which approximates fair value.

Investment income consists primarily of interest, which is recognized on an
accrual basis. Interest income on mortgage-backed securities is determined on
the effective yield method, based on the estimated principal repayments.
Realized capital gains and losses are determined on a specific identification
basis.

INCOME TAXES

The income tax provision is calculated under the liability method. Deferred
tax assets and liabilities are recorded based on the difference between the
financial statement and tax bases of assets and liabilities and the enacted tax
rates. Deferred income taxes also arise from unrealized capital gains or losses
on fixed income securities carried at fair value.

USE OF ESTIMATES

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

3. ACCOUNTING CHANGE

Effective December 31, 1993, the Company adopted Statement of Financial
Accounting Standards ("SFAS") No. 115, "Accounting for Certain Investments in
Debt and Equity Securities." SFAS No. 115 requires that investments classified
as available for sale be carried at fair value. Previously, fixed income
securities classified as available for sale were carried at the lower of
amortized cost or fair value, determined in the aggregate. Unrealized holding
gains and losses are reflected as a separate component of shareholder's equity,
net of deferred income taxes. The net effect of adoption of this statement
increased shareholder's equity at December 31, 1993 by $747, with no impact on
net income.

4. RELATED PARTY TRANSACTIONS

REINSURANCE

The Company reinsures substantially all business with Allstate Life.
Premiums and contract charges ceded to Allstate Life were $2,284 and $52,348 in
1995, $1,886 and $38,306 in 1994, and $2,688 and $22,446 in 1993. Credited
interest, policy benefits and other expenses ceded to Allstate Life amounted to
$229,525, $243,326, and $525,467 in 1995, 1994, and 1993, respectively.
Investment income earned on the assets which support contractholder funds was
excluded from the Company's financial statements as those assets were
transferred to Allstate Life under the terms of reinsurance treaties.
Reinsurance ceded arrangements do not discharge the Company as the primary
insurer.

F-8
<PAGE>

NORTHBROOK LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
($ IN THOUSANDS)

4. RELATED PARTY TRANSACTIONS (CONTINUED)

BUSINESS OPERATIONS

The Company utilizes services and business facilities owned or leased, and
operated by Allstate in conducting its business activities. The Company
reimburses Allstate for the operating expenses incurred by Allstate. The cost to
the Company is determined by various allocation methods and is primarily related
to the level of services provided. Operating expenses, including compensation
and retirement and other benefit programs, allocated to the Company were $5,341,
$5,483 and $5,301 in 1995, 1994 and 1993, respectively. Investment-related
expenses are retained by the Company. All other costs are assumed by Allstate
Life under reinsurance agreements.

DEAN WITTER

The Company and Allstate Life have formed a strategic alliance with Dean
Witter to develop, market and distribute proprietary annuity and life insurance
products through Dean Witter account executives. Dean Witter provides a portion
of the funding for these products through loans to an affiliate of the Company.

Under the terms of the strategic alliance, which is cancelable by either
party, the Company has agreed to use Dean Witter as an exclusive distribution
channel for the Company's products. Dean Witter is also the investment manager
for the Dean Witter Variable Investment Series, the fund in which the assets of
the Separate Accounts are invested.

5. INCOME TAXES

Allstate Life and its life insurance subsidiaries, including the Company,
will file a consolidated federal income tax return. Tax liabilities and benefits
realized by the consolidated group are allocated as generated by the respective
subsidiaries, whether or not such benefits generated by the subsidiaries would
be available on a separate return basis. The Corporation and its domestic
subsidiaries, including the Company (the "Allstate Group"), will be eligible to
file a consolidated tax return beginning in the year 2000.

Prior to the Distribution, the Allstate Group joined with Sears and its
domestic business units (the "Sears Group") in the filing of a consolidated
federal income tax return (the "Sears Tax Group") and were parties to a federal
income tax allocation agreement (the "Tax Sharing Agreement"). As a member of
the Sears Tax Group, the Corporation was jointly and severally liable for the
consolidated income tax liability of the Sears Tax Group. Under the Tax Sharing
Agreement, the Company, through the Corporation, paid to or received from the
Sears Group the amount, if any, by which the Sears Tax Group's federal income
tax liability was affected by virtue of inclusion of the Allstate Group in the
consolidated federal income tax return. Effectively, this resulted in the
Company's annual income tax provision being computed as if the Company filed a
separate return, except that items such as net operating losses, capital losses,
foreign tax credits, or similar items which might not be immediately
recognizable in a separate return, were allocated according to the Tax Sharing
Agreement and reflected in the Company's provision to the extent that such items
reduced the Sears Tax Group's federal tax liability.

The Allstate Group and Sears Group have entered into an agreement which
governs their respective rights and obligations with respect to federal income
taxes for all periods prior to the Distribution ("Consolidated Tax Years"). The
agreement provides that all Consolidated Tax Years will continue to be governed
by the Tax Sharing

F-9
<PAGE>

NORTHBROOK LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
($ IN THOUSANDS)

5. INCOME TAXES (CONTINUED)

Agreement with respect to the Company's federal income tax liability and taxes
payable to or recoverable from the Sears Group.

The components of the deferred income tax assets and liabilities at December
31, 1995 and 1994 are as follows:

<TABLE>
<CAPTION>
1995 1994
--------- ---------
<S> <C> <C>
Deferred assets
Unrealized net capital losses on fixed income securities.................... $ $ 837
--------- ---------
Total deferred assets..................................................... 837
--------- ---------
Deferred liabilities
Difference in tax bases of investments...................................... (1,368) (760)
Unrealized net capital gains on fixed income securities..................... (1,430)
--------- ---------
Total deferred liabilities................................................ (2,798) (760)
--------- ---------
Net deferred (liability) asset................................................ $ (2,798) $ 77
--------- ---------
--------- ---------
</TABLE>

The components of income tax expense are as follows:

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-------------------------------
1995 1994 1993
--------- --------- ---------
<S> <C> <C> <C>
Current................................................................. $ 1,078 $ 1,069 $ 641
Deferred................................................................ 608 (114) 109
--------- --------- ---------
Income tax expense...................................................... $ 1,686 $ 955 $ 750
--------- --------- ---------
--------- --------- ---------
</TABLE>

The Company paid income taxes of $4,206, $4,219 and $1,175 in 1995, 1994 and
1993, respectively under the Tax Sharing Agreement. Included in these amounts
are $2,651, $2,826 and $1,111 reimbursed to the Company by Allstate Life under
the terms of reinsurance agreements for 1995, 1994 and 1993, respectively.

The Company had income taxes payable to Allstate Life of $233 and $4,634 at
December 31, 1995 and 1994, respectively.

F-10
<PAGE>

NORTHBROOK LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
($ IN THOUSANDS)

5. INCOME TAXES (CONTINUED)

A reconciliation of the statutory federal income tax rate to the effective
federal income tax rate is as follows:

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-------------------------------------
1995 1994 1993
----------- ----------- -----------
<S> <C> <C> <C>
Statutory federal income tax rate..................................... 35.0% 35.0% 35.0%
Dividends received deduction.......................................... (10.6)
Tax-exempt income..................................................... (1.7)
Other................................................................. (0.3) 0.5 0.3
--- ----- -----
Effective federal income tax rate..................................... 34.7% 35.5% 23.0%
--- ----- -----
--- ----- -----
</TABLE>

6. INVESTMENTS

FAIR VALUES

The amortized cost, fair value and gross unrealized gains and losses for
fixed income securities are as follows:

<TABLE>
<CAPTION>
GROSS UNREALIZED
AMORTIZED -------------------- FAIR
COST GAINS LOSSES VALUE
----------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
AT DECEMBER 31, 1995
U.S. government and agencies........................... $ 8,619 $ 880 $ $ 9,499
Municipal.............................................. 1,583 83 1,666
Corporate.............................................. 4,967 349 5,316
Mortgage-backed securities............................. 43,973 3,003 228 46,748
----------- --------- --------- ---------
Totals............................................. $ 59,142 $ 4,315 $ 228 $ 63,229
----------- --------- --------- ---------
----------- --------- --------- ---------

GROSS UNREALIZED
AMORTIZED -------------------- FAIR
COST GAINS LOSSES VALUE
----------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
AT DECEMBER 31, 1994
U.S. government and agencies........................... $ 9,619 $ 49 $ 825 $ 8,843
Municipal.............................................. 1,642 77 3 1,716
Corporate.............................................. 3,172 63 3,109
Mortgage-backed securities............................. 47,148 75 1,700 45,523
----------- --------- --------- ---------
Totals............................................. $ 61,581 $ 201 $ 2,591 $ 59,191
----------- --------- --------- ---------
----------- --------- --------- ---------
</TABLE>

F-11
<PAGE>

NORTHBROOK LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
($ IN THOUSANDS)

6. INVESTMENTS (CONTINUED)

SCHEDULED MATURITIES

The scheduled maturities for fixed income securities at December 31, 1995
are as follows:

<TABLE>
<CAPTION>
AMORTIZED COST FAIR VALUE
--------------- -----------
<S> <C> <C>
Due in one year or less......................................................... $ 270 $ 272
Due after one year through five years........................................... 3,021 3,182
Due after five years through ten years.......................................... 4,647 5,124
Due after ten years............................................................. 7,231 7,903
------- -----------
15,169 16,481
Mortgage-backed securities...................................................... 43,973 46,748
------- -----------
Total....................................................................... $ 59,142 $ 63,229
------- -----------
------- -----------
</TABLE>

Actual maturities may differ from those scheduled as a result of prepayments
by the issuers.

UNREALIZED NET CAPITAL GAINS AND LOSSES

Unrealized net capital gains and losses on fixed income securities included
in shareholder's equity at December 31, 1995 are as follows:

<TABLE>
<CAPTION>
UNREALIZED NET
AMORTIZED COST FAIR VALUE GAINS/(LOSSES)
--------------- ----------- ---------------
<S> <C> <C> <C>
Fixed income securities........................................ $ 59,142 $ 63,229 $ 4,087
------- -----------
------- -----------
Deferred income taxes.......................................... (1,430)
-------
Total...................................................... $ 2,657
-------
-------
</TABLE>

The change in unrealized net capital gains and losses for fixed income
securities is as follows:

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER
31,
--------------------
1995 1994
--------- ---------
<S> <C> <C>
Fixed income securities................................................................. $ 6,477 $ (3,539)
Deferred income taxes................................................................... (2,267) 1,239
--------- ---------
Change in unrealized net capital gains and losses................................... $ 4,210 $ (2,300)
--------- ---------
--------- ---------
</TABLE>

F-12
<PAGE>

NORTHBROOK LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
($ IN THOUSANDS)

6. INVESTMENTS (CONTINUED)

COMPONENTS OF INVESTMENT INCOME

Investment income by type of investment is as follows:

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-------------------------------
1995 1994 1993
--------- --------- ---------
<S> <C> <C> <C>
Investment income:
Fixed income securities....................................................... $ 4,633 $ 2,735 $ 2,793
Short-term.................................................................... 215 192 172
--------- --------- ---------
Investment income, before expense............................................... 4,848 2,927 2,965
Investment expense.............................................................. 66 46 31
--------- --------- ---------
Net investment income....................................................... $ 4,782 $ 2,881 $ 2,934
--------- --------- ---------
--------- --------- ---------
</TABLE>

REALIZED CAPITAL GAINS AND LOSSES

Realized capital gains and losses on investments are as follows:

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-------------------------------
1995 1994 1993
--------- --------- ---------
<S> <C> <C> <C>
Fixed income securities............................................................. $ 67 $ (193) $ 323
Income tax (expense) benefit........................................................ (23) 68 (113)
--- --------- ---------
Net realized gains (losses)......................................................... $ 44 $ (125) $ 210
--- --------- ---------
--- --------- ---------
</TABLE>

PROCEEDS FROM SALES OF FIXED INCOME SECURITIES

The proceeds from sales of investments in fixed income securities, excluding
calls, and related gross realized gains and losses are as follows:

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-------------------------------
1995 1994 1993
--------- --------- ---------
<S> <C> <C> <C>
Proceeds...................................................................... $ 5,423 $ 1,256 $ 14,279
--------- --------- ---------
--------- --------- ---------
Gross realized gains.......................................................... $ 67 $ 318
Gross realized losses......................................................... $ (179) (34)
--------- --------- ---------
Net realized gains (losses)................................................... $ 67 $ (179) $ 284
--------- --------- ---------
--------- --------- ---------
</TABLE>

SECURITIES ON DEPOSIT

At December 31, 1995, fixed income securities with a carrying value of
$8,041 were on deposit with regulatory authorities as required by law.

7. FINANCIAL INSTRUMENTS

In the normal course of business, the Company invests in various financial
assets and incurs various financial liabilities. The assets and liabilities of
the Separate Accounts are carried at the fair value of the funds in which the

F-13
<PAGE>

NORTHBROOK LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
($ IN THOUSANDS)

7. FINANCIAL INSTRUMENTS (CONTINUED)

assets are invested. The fair value of all financial assets other than fixed
income securities and all liabilities other than contractholder funds
approximates their carrying value as they are short-term in nature.

Fair values for fixed income securities are based on quoted market prices.
The December 31, 1995 and 1994 fair values and carrying values of fixed income
securities are discussed in Note 6.

The fair value of contractholder funds related to investment contracts is
based on the terms of the underlying contracts. Reserves on investment contracts
with no stated maturities (single premium and flexible premium deferred
annuities) are valued at the fund balance less surrender charge. The fair value
of immediate annuities and annuities without life contingencies with fixed terms
are estimated using discounted cash flow calculations based on interest rates
currently offered for contracts with similar terms and duration. Contractholder
funds on investment contracts had a carrying value of $2,294,536 at December 31,
1995 and a fair value of $2,274,053. The carrying value and fair value at
December 31, 1994 were $2,738,823 and $2,685,448, respectively.

8. STATUTORY FINANCIAL INFORMATION

The following tables reconcile net income and shareholder's equity as
reported herein in conformity with generally accepted accounting principles with
statutory net income and capital and surplus, determined in accordance with
statutory accounting practices prescribed or permitted by insurance regulatory
authorities:

<TABLE>
<CAPTION>
NET INCOME
-------------------------------
YEAR ENDED DECEMBER 31,
-------------------------------
1995 1994 1993
--------- --------- ---------
<S> <C> <C> <C>
Balance per generally accepted accounting principles............................ $ 3,163 $ 1,733 $ 2,507
Income taxes.................................................................. (88) (114) 825
Non-admitted assets and statutory reserves.................................... (775) (27) (91)
--------- --------- ---------
Balance per statutory accounting principles..................................... $ 2,300 $ 1,592 $ 3,241
--------- --------- ---------
--------- --------- ---------
</TABLE>

<TABLE>
<CAPTION>
SHAREHOLDER'S EQUITY
DECEMBER 31,
--------------------
1995 1994
--------- ---------
<S> <C> <C>
Balance per generally accepted accounting principles................................... $ 76,875 $ 69,502
Income taxes......................................................................... (1,614) (77)
Unrealized net capital gains (losses)................................................ (4,087) 2,390
Non-admitted assets and statutory reserves........................................... 1,891 (1,086)
--------- ---------
Balance per statutory accounting principles............................................ $ 73,065 $ 70,729
--------- ---------
--------- ---------
</TABLE>

PERMITTED STATUTORY ACCOUNTING PRACTICES

The Company prepares its statutory financial statements in accordance with
accounting principles and practices prescribed or permitted by the insurance
department of the State of Illinois. Prescribed statutory accounting practices
include a variety of publications of the National Association of Insurance
Commissioners, as

F-14
<PAGE>

NORTHBROOK LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
($ IN THOUSANDS)

8. STATUTORY FINANCIAL INFORMATION (CONTINUED)

well as state laws, regulations and general administrative rules. Permitted
statutory accounting practices encompass all accounting practices not so
prescribed. The Company does not follow any permitted statutory accounting
practices that have a material effect on statutory surplus or risk-based
capital.

DIVIDENDS

The ability of the Company to pay dividends is dependent on business
conditions, income, cash requirements of the Company and other relevant factors.
The payment of shareholder dividends by insurance companies without the prior
approval of the state insurance regulator is limited to formula amounts based on
net income and capital and surplus, determined in accordance with statutory
accounting practices, as well as the timing and amount of dividends paid in the
preceding twelve months. The maximum amount of dividends that the Company can
distribute during 1996 without prior approval of both the Illinois and
California Departments of Insurance is $7,057.

F-15
<PAGE>

NORTHBROOK LIFE INSURANCE COMPANY
SCHEDULE IV--REINSURANCE
($ IN THOUSANDS)

YEAR ENDED DECEMBER 31, 1995

GROSS NET
AMOUNT CEDED AMOUNT
-------- -------- ------
Life insurance in force...................... $610,478 $610,478 $
-------- -------- ------
-------- -------- ------
Premiums and contract charges:
Life and annuities......................... $ 54,632 $ 54,632 $
-------- -------- ------
-------- -------- ------

YEAR ENDED DECEMBER 31, 1994

GROSS NET
AMOUNT CEDED AMOUNT
-------- -------- ------
Life insurance in force...................... $661,356 $661,356 $
-------- -------- ------
-------- -------- ------
Premiums and contract charges:
Life and annuities......................... $ 40,192 $ 40,192 $
-------- -------- ------
-------- -------- ------

YEAR ENDED DECEMBER 31, 1993

GROSS NET
AMOUNT CEDED AMOUNT
-------- -------- ------
Life insurance in force...................... $702,975 $702,975 $
-------- -------- ------
-------- -------- ------
Premiums and contract charges:
Life and annuities......................... $ 25,134 $ 25,134 $
-------- -------- ------
-------- -------- ------

F-16
<PAGE>

INDEPENDENT AUDITORS' REPORT

TO THE BOARD OF DIRECTORS AND SHAREHOLDER OF
NORTHBROOK LIFE INSURANCE COMPANY:

We have audited the accompanying Statement of Net Assets of Northbrook
Variable Annuity Account (the "Account") as of December 31, 1995, and the
related Statements of Operations for the year then ended and Changes in Net
Assets for each of the two years in the period ended December 31, 1995 of the
Money Market, High Yield, Equity, Quality Income Plus, Strategist, Dividend
Growth, Utilities, European Growth, Capital Growth, Global Dividend Growth and
Pacific Growth portfolios that comprise the Account. These financial statements
are the responsibility of the Account's management. Our responsibility is to
express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. Our procedures included
confirmation of securities owned at December 31, 1995. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, such financial statements present fairly, in all material
respects, the financial position of the Account as of December 31, 1995, and the
results of its operations for the year then ended and the changes in its net
assets for each of the two years in the period ended December 31, 1995 of each
of the portfolios comprising the Account, in conformity with generally accepted
accounting principles.

/s/ DELOITTE & TOUCHE LLP
Chicago, Illinois
March 1, 1996

F-17
<PAGE>

NORTHBROOK VARIABLE ANNUITY ACCOUNT
STATEMENT OF NET ASSETS
DECEMBER 31, 1995

($ and shares in thousands)

<TABLE>
<CAPTION>
ASSETS
<S> <C>
Investments in the Dean Witter Variable Investment Series:
Money Market Portfolio
27,085 shares (cost $27,085).................................................... $ 27,085
High Yield Portfolio
3,914 shares (cost $30,224)..................................................... 24,521
Equity Portfolio
2,113 shares (cost $38,722)..................................................... 57,328
Quality Income Plus Portfolio
4,040 shares (cost $40,260)..................................................... 44,270
Strategist Portfolio
4,417 shares (cost $48,384)..................................................... 54,965
Dividend Growth Portfolio
5,121 shares (cost $54,531)..................................................... 79,843
Utilities Portfolio
2,839 shares (cost $31,407)..................................................... 41,684
European Growth Portfolio
716 shares (cost $9,798)........................................................ 12,551
Capital Growth Portfolio
256 shares (cost $3,082)........................................................ 3,895
Global Dividend Growth Portfolio
877 shares (cost $8,950)........................................................ 10,253
Pacific Growth Portfolio
607 shares (cost $5,815)........................................................ 5,892
---------
Total assets.................................................................. 362,287

LIABILITIES
Payable to Northbrook Life Insurance Company --
accrued contract maintenance charges.............................................. 133
---------
Net assets.................................................................... $ 362,154
---------
---------
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS.

F-18
<PAGE>
(This page has been left blank intentionally.)

F-19
<PAGE>

NORTHBROOK VARIABLE ANNUITY ACCOUNT
STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 1995

<TABLE>
<CAPTION>
QUALITY
MONEY HIGH INCOME DIVIDEND
MARKET YIELD EQUITY PLUS STRATEGIST GROWTH
($ in thousands) PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
--------- --------- --------- --------- ----------- ---------
<S> <C> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends........................ $ 1,887 $ 3,142 $ 592 $ 2,939 $ 5,846 $ 3,661
Less mortality and expense risk
charges from Northbrook Life.... (340) (271) (529) (451) (642) (759)
--------- --------- --------- --------- ----------- ---------
Net investment income (loss)..... 1,547 2,871 63 2,488 5,204 2,902
--------- --------- --------- --------- ----------- ---------
REALIZED AND UNREALIZED GAINS AND
LOSSES ON INVESTMENTS:
Realized gains and losses from
sales of investments:
Proceeds from sales............ 29,283 10,741 18,007 14,963 26,326 15,838
Cost of investments sold....... 29,283 13,488 14,017 14,521 23,340 11,926
--------- --------- --------- --------- ----------- ---------
Net realized gains and losses...... -- (2,747) 3,990 442 2,986 3,912
--------- --------- --------- --------- ----------- ---------
Change in unrealized gains and
losses............................ -- 3,290 14,353 6,444 (3,230) 16,029
--------- --------- --------- --------- ----------- ---------
Net gains and losses on
investments....................... -- 543 18,343 6,886 (244) 19,941
--------- --------- --------- --------- ----------- ---------
CHANGE IN NET ASSETS RESULTING FROM
OPERATIONS........................ $ 1,547 $ 3,414 $ 18,406 $ 9,374 $ 4,960 $ 22,843
--------- --------- --------- --------- ----------- ---------
--------- --------- --------- --------- ----------- ---------
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS.

F-20
<PAGE>

<TABLE>
<CAPTION>
GLOBAL
EUROPEAN CAPITAL DIVIDEND PACIFIC
UTILITIES GROWTH GROWTH GROWTH GROWTH
($ in thousands) PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO TOTAL
--------- ----------- ----------- ----------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends........................ $ 1,772 $ 586 $ 23 $ 246 $ 51 $ 20,745
Less mortality and expense risk
charges from Northbrook Life.... (402) (131) (38) (96) (57) (3,716)
--------- ----------- ----------- ----------- ----------- ----------
Net investment income (loss)..... 1,370 455 (15) 150 (6) 17,029
--------- ----------- ----------- ----------- ----------- ----------
REALIZED AND UNREALIZED GAINS AND
LOSSES ON INVESTMENTS:
Realized gains and losses from
sales of investments:
Proceeds from sales............ 12,074 5,835 2,286 3,338 3,426 142,117
Cost of investments sold....... 10,104 4,870 2,053 3,190 3,582 130,374
--------- ----------- ----------- ----------- ----------- ----------
Net realized gains and losses...... 1,970 965 233 148 (156) 11,743
--------- ----------- ----------- ----------- ----------- ----------
Change in unrealized gains and
losses............................ 6,470 1,459 826 1,500 349 47,490
--------- ----------- ----------- ----------- ----------- ----------
Net gains and losses on
investments....................... 8,440 2,424 1,059 1,648 193 59,233
--------- ----------- ----------- ----------- ----------- ----------
CHANGE IN NET ASSETS RESULTING FROM
OPERATIONS........................ 9,810 2,879 1,044 $ 1,798 $ 187 76,262
--------- ----------- ----------- ----------- ----------- ----------
--------- ----------- ----------- ----------- ----------- ----------
</TABLE>

F-21
<PAGE>

NORTHBROOK VARIABLE ANNUITY ACCOUNT
STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED DECEMBER 31, 1995

<TABLE>
<CAPTION>
QUALITY
MONEY HIGH INCOME DIVIDEND
($ and units in thousands, MARKET YIELD EQUITY PLUS STRATEGIST GROWTH
except value per unit) PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
---------- --------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
FROM OPERATIONS:
Net investment income (loss)..... $ 1,547 $ 2,871 $ 63 $ 2,488 $ 5,204 $ 2,902
Net realized gains and losses.... (2,747) 3,990 442 2,986 3,912
Net change in unrealized gains
and losses...................... 3,290 14,353 6,444 (3,230) 16,029
---------- --------- ---------- ---------- ---------- ----------
1,547 3,414 18,406 9,374 4,960 22,843
---------- --------- ---------- ---------- ---------- ----------
FROM CAPITAL TRANSACTIONS:
Deposits......................... 250 207 307 317 160 768
Benefit payments................. (398) (749) (485) (698) (698) (648)
Payments on termination.......... (12,791) (6,897) (13,097) (12,503) (20,203) (15,665)
Contract maintenance charges..... (19) (24) (44) (27) (47) (62)
Transfers among the portfolios
and with the Fixed Account,
net............................. (3,451) (1) 1,172 1,526 (4,038) 2,374
---------- --------- ---------- ---------- ---------- ----------
(16,409) (7,464) (12,147) (11,385) (24,826) (13,233)
---------- --------- ---------- ---------- ---------- ----------
Increase (decrease) in net
assets............................ (14,862) (4,050) 6,259 (2,011) (19,866) 9,610
Net assets, beginning of period.... 41,937 28,562 51,048 46,265 74,811 70,204
---------- --------- ---------- ---------- ---------- ----------
Net assets, end of period.......... $ 27,075 $ 24,512 $ 57,307 $ 44,254 $ 54,945 $ 79,814
---------- --------- ---------- ---------- ---------- ----------
---------- --------- ---------- ---------- ---------- ----------
NET ASSET VALUE PER UNIT, END OF
PERIOD............................ $ 18.22 $ 27.06 $ 43.59 $ 20.50 $ 20.28 $ 18.13
---------- --------- ---------- ---------- ---------- ----------
---------- --------- ---------- ---------- ---------- ----------
UNITS OUTSTANDING, END OF PERIOD... 1,486 906 1,315 2,159 2,708 4,403
---------- --------- ---------- ---------- ---------- ----------
---------- --------- ---------- ---------- ---------- ----------
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS.

F-22
<PAGE>

<TABLE>
<CAPTION>
GLOBAL
EUROPEAN CAPITAL DIVIDEND PACIFIC
($ and units in thousands, UTILITIES GROWTH GROWTH GROWTH GROWTH
except value per unit) PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO TOTAL
--------- ----------- --------- --------- --------- ----------
<S> <C> <C> <C> <C> <C> <C>
FROM OPERATIONS:
Net investment income (loss)..... $ 1,370 $ 455 $ (15) $ 150 $ (6) $ 17,029
Net realized gains and losses.... 1,970 965 233 148 (156) 11,743
Net change in unrealized gains
and losses...................... 6,470 1,459 826 1,500 349 47,490
--------- ----------- --------- --------- --------- ----------
9,810 2,879 1,044 1,798 187 76,262
--------- ----------- --------- --------- --------- ----------
FROM CAPITAL TRANSACTIONS:
Deposits......................... 228 142 58 240 122 2,799
Benefit payments................. (418) (51) (23) 0 0 (4,168)
Payments on termination.......... (8,812) (3,042) (1,292) (2,452) (1,581) (98,335)
Contract maintenance charges..... (30) (8) (3) (7) (4) (275)
Transfers among the portfolios
and with the Fixed Account,
net............................. 820 (823) 403 1,207 1,206 395
--------- ----------- --------- --------- --------- ----------
(8,212) (3,782) (857) (1,012) (257) (99,584)
--------- ----------- --------- --------- --------- ----------
Increase (decrease) in net
assets............................ 1,598 (903) 187 786 (70) (23,322)
Net assets, beginning of period.... 40,070 13,450 3,706 9,463 5,960 385,476
--------- ----------- --------- --------- --------- ----------
Net assets, end of period.......... $ 41,668 $ 12,547 $ 3,893 $ 10,249 $ 5,890 $ 362,154
--------- ----------- --------- --------- --------- ----------
--------- ----------- --------- --------- --------- ----------
NET ASSET VALUE PER UNIT, END OF
PERIOD............................ $ 18.13 $ 19.30 $ 15.18 $ 12.01 $ 9.68
--------- ----------- --------- --------- ---------
--------- ----------- --------- --------- ---------
UNITS OUTSTANDING, END OF PERIOD... 2,298 650 256 853 608
--------- ----------- --------- --------- ---------
--------- ----------- --------- --------- ---------
</TABLE>

F-23
<PAGE>

NORTHBROOK VARIABLE ANNUITY ACCOUNT
STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED DECEMBER 31, 1994

<TABLE>
<CAPTION>
QUALITY
MONEY HIGH INCOME DIVIDEND
($ and units in thousands, except MARKET YIELD EQUITY PLUS STRATEGIST GROWTH
value per unit) PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
--------- --------- --------- --------- ----------- ---------
<S> <C> <C> <C> <C> <C> <C>
FROM OPERATIONS:
Net investment income (loss)..... $ 1,120 $ 3,681 $ 4,298 $ 4,415 $ 3,667 $ 1,584
Net realized gains and losses.... (2,385) 1,793 97 1,700 1,930
Net change in unrealized gains
and losses...................... (2,447) (9,687) (9,616) (3,086) (6,998)
--------- --------- --------- --------- ----------- ---------
1,120 (1,151) (3,596) (5,104) 2,281 (3,484)
--------- --------- --------- --------- ----------- ---------
FROM CAPITAL TRANSACTIONS:
Deposits......................... 408 286 439 356 862 1,037
Benefit payments................. (1,321) (814) (545) (872) (269) (989)
Payments on termination.......... (9,667) (4,449) (5,087) (8,061) (9,553) (6,457)
Contract maintenance charges..... (27) (26) (40) (25) (58) (58)
Transfers among the portfolios
and with the Fixed Account,
net............................. 10,730 (3,123) 799 (12,041) 1,303 (2,260)
--------- --------- --------- --------- ----------- ---------
123 (8,126) (4,434) (20,643) (7,715) (8,727)
--------- --------- --------- --------- ----------- ---------
Increase (decrease) in net
assets............................ 1,243 (9,277) (8,030) (25,747) (5,434) (12,211)
Net assets, beginning of period.... 40,694 37,839 59,078 72,012 80,245 82,415
--------- --------- --------- --------- ----------- ---------
Net assets, end of period.......... $ 41,937 $ 28,562 $ 51,048 $ 46,265 $ 74,811 $ 70,204
--------- --------- --------- --------- ----------- ---------
--------- --------- --------- --------- ----------- ---------
NET ASSET VALUE PER UNIT, END OF
PERIOD............................ $ 17.41 $ 23.76 $ 30.88 $ 16.65 $ 18.73 $ 13.43
--------- --------- --------- --------- ----------- ---------
--------- --------- --------- --------- ----------- ---------
UNITS OUTSTANDING, END OF PERIOD... 2,409 1,203 1,653 2,779 3,994 5,229
--------- --------- --------- --------- ----------- ---------
--------- --------- --------- --------- ----------- ---------
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS.

F-24
<PAGE>

<TABLE>
<CAPTION>
GLOBAL
EUROPEAN CAPITAL DIVIDEND PACIFIC
($ and units in thousands, except UTILITIES GROWTH GROWTH GROWTH GROWTH
value per unit) PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO TOTAL
--------- ----------- --------- ----------- ----------- ---------
<S> <C> <C> <C> <C> <C> <C>
FROM OPERATIONS:
Net investment income (loss)..... $ 1,836 $ 486 $ 9 $ 64 $ (15) $ 21,145
Net realized gains and losses.... 2,606 698 16 (28) 6,427
Net change in unrealized gains
and losses...................... (10,091) (336) (127) (197) (272) (42,857)
--------- ----------- --------- ----------- ----------- ---------
(5,649) 848 (102) (161) (287) (15,285)
--------- ----------- --------- ----------- ----------- ---------
FROM CAPITAL TRANSACTIONS:
Deposits......................... 464 375 67 703 616 5,613
Benefit payments................. (608) (33) (11) (15) (5,477)
Payments on termination.......... (4,577) (1,740) (514) (1,003) (444) (51,552)
Contract maintenance charges..... (26) (9) (2) (7) (5) (283)
Transfers among the portfolios
and with the Fixed Account,
net............................. (11,690) 2,929 (1,137) 9,942 6,095 1,547
--------- ----------- --------- ----------- ----------- ---------
(16,437) 1,522 (1,586) 9,624 6,247 (50,152)
--------- ----------- --------- ----------- ----------- ---------
Increase (decrease) in net
assets............................ (22,086) 2,370 (1,688) 9,463 5,960 (65,437)
Net assets, beginning of period.... 62,156 11,080 5,394 450,913
--------- ----------- --------- ----------- ----------- ---------
Net assets, end of period.......... $ 40,070 $ 13,450 $ 3,706 $ 9,463 $ 5,960 $ 385,476
--------- ----------- --------- ----------- ----------- ---------
--------- ----------- --------- ----------- ----------- ---------
NET ASSET VALUE PER UNIT, END OF
PERIOD............................ $ 14.24 $ 15.48 $ 11.53 $ 9.94 $ 9.25
--------- ----------- --------- ----------- -----------
--------- ----------- --------- ----------- -----------
UNITS OUTSTANDING, END OF PERIOD... 2,814 868 321 952 645
--------- ----------- --------- ----------- -----------
--------- ----------- --------- ----------- -----------
</TABLE>

F-25
<PAGE>
PART C
OTHER INFORMATION

24A. FINANCIAL STATEMENTS

PART B: Northbrook Life Insurance Company Financial Schedules
Northbrook Variable Annuity I

24B. EXHIBITS

The following exhibits:

The following exhibits, which were previously filed with Registrant's
Registration Statement dated June 15, 1990, correspond to those required by
paragraph (b) of item 24 as to exhibits in Form N-4:

<TABLE>
<S> <C>
(1) Resolution of the Board of Directors of Northbrook Life Insurance Company authorizing
establishment of the Variable Annuity Account
(2) Not Applicable
(3)(a) Principal Underwriting Agreement
(b) Managing General Agent's Agreement
(4) Specimen Contract
(5) Form of application for a Contract
(6)(a) Articles of Incorporation of Northbrook Life Insurance Company
(b) By-laws of Northbrook Life Insurance Company
(7) Not applicable
(8) Participation Agreement*
(9) Opinion of Robert S. Seiler, Senior Vice President, Secretary and General Counsel of
Northbrook Life Insurance Company
(10)(a) Consent of Accountants*
(b) Consent of Attorneys
(11) Not applicable
(12) Not Applicable
(13) Performance Data Calculations*
(99) Powers of Attorney*
</TABLE>

- ------------------------
* Filed herewith.
<PAGE>
25. DIRECTORS AND OFFICERS OF THE DEPOSITOR

<TABLE>
<CAPTION>
NAME AND PRINCIPAL BUSINESS
ADDRESS POSITION AND OFFICE WITH DEPOSITOR OF THE TRUST
- --------------------------- ------------------------------------------------------------------
<S> <C>
Louis G. Lower, II Chairman of the Board of Directors and Chief Executive Officer
Michael J. Velotta Director, Vice President, Secretary and General Counsel
Marla G. Friedman Director, President and Chief Operating Officer
Peter H. Heckman Director and Vice President
John R. Hunter Director and Assistant Vice President
Lawrence P. Moews Director
Casey J. Sylla Director and Chief Investment Officer
James P. Zils Treasurer
Barry S. Paul Assistant Vice President and Controller
Sarah R. Donahue Assistant Vice President
Ronald Johnson Assistant Vice President
Emma M. Kalaidjian Assistant Secretary
Margarita E. Kellen Assistant Vice President
Paul N. Kierig Assistant Secretary
Mary J. McGinn Assistant Secretary
Robert N. Roeters Assistant Vice President
Theodore A. Schnell Assistant Vice President, Assistant Secretary and Assistant
Treasurer
C. Nelson Strom Assistant Vice President and Corporate Actuary
Charles F. Thalheimer Assistant Vice President
Kevin R. Slawin Assistant Treasurer
Brenda D. Sneed Assistant Secretary and Assistant General Counsel
</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

See 10-K Commission File #1-11840, The Allstate Corporation.

27. NUMBER OF CONTRACT OWNERS

As of December 31, 1995 there were in force 794 qualified and 7,581
non-qualified contracts. The Registrant began operations on February 14, 1983.

28. INDEMNIFICATION

The Managing General Agent's Agreement (Exhibit 3(b)) has a provision in
which Northbrook Life agrees to indemnify Dean Witter Reynolds as Underwriter
for certain damages and expenses that may be caused by actions, statements or
omissions by Northbrook Life. The Agreement to Purchase Shares contains a
similar provision in paragraph 16 of Exhibit 12.

Insofar as indemnification for liability arising out of 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
<PAGE>
against such liabilities (other than payment by the registrant of expenses
incurred 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.

29A. RELATIONSHIP OF PRINCIPAL UNDERWRITER TO OTHER INVESTMENT COMPANIES

Dean Witter Distributors Inc. is the principal underwriter for the following
investment companies:

Dean Witter Liquid Asset Fund Inc.

Dean Witter Tax-Free Daily Income Trust

Dean Witter California Tax-Free Daily Income Trust

Dean Witter Retirement Series

Dean Witter Dividend Growth Securities Inc.

Dean Witter Natural Resource Development
Securities Inc.

Dean Witter World Wide Investment Trust

Dean Witter Capital Growth Securities

Dean Witter Convertible Securities Trust

Dean Witter Federal Securities Trust

Active Assets Tax-Free Money

Active Assets Money Trust

Active Assets California Tax-Free Trust

Active Assets Government Securities Trust

Dean Witter Short-Term Bond Fund

Dean Witter Mid-Cap Growth Fund

Dean Witter U.S. Government Securities Trust

Dean Witter High Yield Securities Inc.

Dean Witter New York Tax-Free Income Fund

Dean Witter Tax-Exempt Securities Trust

Dean Witter California Tax-Free Income Fund

Dean Witter Managed Assets Trust

Dean Witter Limited Term Municipal Trust

Dean Witter World Wide Income Trust

Dean Witter Utilities Fund

Dean Witter Strategist Fund

Dean Witter New York Municipal Money Market
Trust

Dean Witter Intermediate Income Securities
Prime Income Trust

Dean Witter European Growth Fund Inc.

Dean Witter Developing Growth Securities Trust

Dean Witter Precious Metal & Minerals Trust

Dean Witter Pacific Growth Fund Inc.

Dean Witter Multi-State Municipal Series Trust

Dean Witter Federal Securities Trust

Dean Witter Short-Term U.S. Treasury Trust

Dean Witter Diversified Income Trust

Dean Witter Health Sciences Trust

Dean Witter Global Dividend Growth Securities

Dean Witter U.S. Government Money Market
Trust

Dean Witter Short-Term Income Fund Inc.

Dean Witter Premium Income Trust

Dean Witter Value-Added Market Series

Dean Witter Global Utilities Fund

Dean Witter High Income Securities

Dean Witter National Municipal Trust

Dean Witter International SmallCap Fund

Dean Witter Global Asset Allocation Fund

Dean Witter Balanced Income Fund

Dean Witter Balanced Growth Fund

Dean Witter Hawaii Municipal Trust

Dean Witter Capital Appreciation Fund

Dean Witter Intermediate Term U.S. Treasury
Trust

Dean Witter Information Fund

Dean Witter Japan Fund

TCW/DW Core Equity Trust

TCW/DW North American Government Income
Trust

TCW/DW Latin American Growth Fund

TCW/DW Income and Growth Fund

TCW/DW Small Cap Growth Fund

TCW/DW Balanced Fund

TCW/DW Mid-Cap Equity Fund

TCW/DW Total Return Trust

<PAGE>
29B. PRINCIPAL UNDERWRITER

<TABLE>
<CAPTION>
NAME AND PRINCIPAL BUSINESS
ADDRESS OF EACH SUCH PERSON POSITIONS AND OFFICES WITH UNDERWRITER
- ---------------------------- ------------------------------------------------------------------------------------------
<S> <C>
Dean Witter Reynolds Inc. Underwriter
("Dean Witter")
Philip J. Purcell Chairman, Chief Executive Officer and Director
Richard M. DeMartini President and Chief Operating Officer, Dean Witter Capital and Director
James F. Higgins President and Chief Operating Officer, Dean Witter Financial and Director
Stephen R. Miller Senior Executive Vice President and Director
Raymond J. Drop Executive Vice President
Robert J. Dwyer Executive Vice President, National Sales Director and Director
Christine A. Edwards Executive Vice President, Secretary, General Counsel and Director
Charles A. Fiumefreddo Executive Vice President and Director
Frederick J. Fromme Executive Vice President
Alfred J. Golden Executive Vice President
E. Davisson Hardman, Jr. Executive Vice President
Mitchell M. Merin Executive Vice President, Chief Administrative Officer and Director
Laurence E. Mollner Executive Vice President
Jeremiah A. Mullins Executive Vice President
Richard F. Powers III Executive Vice President and Director
John H. Schaefer Executive Vice President
Thomas C. Schneider Executive Vice President, Chief Financial Officer and Director
Robert B. Sculthorpe Executive Vice President
William B. Smith Executive Vice President and Director
Samuel H. Wolcott III Executive Vice President
Anthony Basile Senior Vice President and Corporate Services Director
Ronald T. Carman Senior Vice President, Associate General Counsel and Assistant Secretary
Michael T. Cunningham Senior Vice President
Mary E. Curran Senior Vice President
David Diaz Senior Vice President
Raymond P. Douglas Senior Vice President
Paul J. Dubow Senior Vice President
Michael T. Gregg Senior Vice President and Deputy General Counsel
Erick R. Holt Senior Vice President and Assistant Secretary
Sirendra Kumar Senior Vice President and Treasurer
</TABLE>

<PAGE>

The principal address of Dean Witter is Two World Trade Center, New York,
New York 10048.
<PAGE>
29C. COMPENSATION OF DEAN WITTER

The following commissions and other compensation were received by each
principal underwriter, directly or indirectly, from the Registrant during the
Registrant's last fiscal year:

<TABLE>
<CAPTION>
(1) (2) (3) (4) (5)
NET COMPENSATION
UNDERWRITING OR REDEMPTION
NAME OF DISCOUNTS AND OR BROKERAGE
PRINCIPAL COMMISSIONS ANNUITIZATION COMMISSIONS COMPENSATION
- --------------- ------------- -------------- ------------- --------------
<S> <C> <C> <C> <C>
Dean Witter
Reynolds Inc. $ 276,052
</TABLE>

30. LOCATION OF ACCOUNTS AND RECORDS

Michael J. Velotta
Northbrook Life Insurance Company
3100 Sanders Road
Northbrook, Illinois 60062

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.

33. REPRESENTATIONS PURSUANT TO SECTION 403(B) OF THE INTERNAL REVENUE CODE

The Company 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.
<PAGE>
SIGNATURES

As required by the Securities Act of 1933 and the Investment Company Act of
1940, the registrant, Northbrook Variable Annuity Account, certifies that it
meets the requirements of Securities Act Rule 485(b) for effectiveness of this
Registration Statement and has duly caused this Registration Statement to be
signed on its behalf by the undersigned, thereunto duly authorized, and its seal
to be hereunto affixed and attested, in the Township of Northfield, and State of
Illinois on the 26th day of April, 1996.

NORTHBROOK VARIABLE ANNUITY ACCOUNT
(Registrant)
NORTHBROOK LIFE INSURANCE COMPANY
(Depositor)

(SEAL) /s/ BRENDA D. SNEED /s/ MICHAEL J. VELOTTA
Attest: ------------------------------ By: ----------------------------------
Brenda D. Sneed Michael J. Velotta
ASSISTANT SECRETARY AND VICE PRESIDENT, SECRETARY AND
ASSISTANT GENERAL COUNSEL 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 Northbrook Life Insurance
Company on this 26th day of April, 1996.

Chairman of the Board of
*/s/ LOUIS G. LOWER, II Directors and Chief
- ----------------------------------- Executive Officer
Louis G. Lower, II (Principal Executive
Officer)

/s/ MICHAEL J. VELOTTA Vice President,
- ----------------------------------- Secretary, General
Michael J. Velotta Counsel and Director

*/s/ MARLA G. FRIEDMAN President, Chief
- ----------------------------------- Operating Officer and
Marla G. Friedman Director

*/s/ PETER H. HECKMAN
- ----------------------------------- Vice President and
Peter H. Heckman Director

*/s/ JOHN R. HUNTER
- ----------------------------------- Assistant Vice President
John R. Hunter and Director

**/s/ LAWRENCE P. MOEWS
- ----------------------------------- Director
Lawrence P. Moews

**/s/ CASEY J. SYLLA
- ----------------------------------- Chief Investment Officer
Casey J. Sylla and Director

**/s/ JAMES P. ZILS
- ----------------------------------- Treasurer
James P. Zils

**/s/ BARRY S. PAUL
- ----------------------------------- Assistant Vice President
Barry S. Paul and Controller

* By Michael J. Velotta pursuant to Power of Attorney previously filed.
** By Michael J. Velotta pursuant to Power of Attorney filed herewith.

<PAGE>

PARTICIPATION AGR. C66086

PARTICIPATION AGREEMENT

THIS AGREEMENT, made and entered into this the 17th day of April, 1996, by and
between each of NORTHBROOK LIFE INSURANCE COMPANY, ALLSTATE LIFE INSURANCE
COMPANY OF NEW YORK and GLENBROOK LIFE AND ANNUITY COMPANY (hereinafter
collectively the "Companies" and individually the "Company"), each on its own
behalf and on behalf of each of the segregated asset accounts of the Company set
forth in Schedule A hereto, as such Schedule A may be amended from time to time,
(hereinafter the "Accounts") and DEAN WITTER VARIABLE INVESTMENT SERIES, an
unincorporated business trust organized under the laws of the Commonwealth of
Massachusetts, (hereinafter the "Trust") and DEAN WITTER DISTRIBUTORS INC.
(hereinafter the "Distributor").

WHEREAS, the Trust is engaged in business as an open-end management investment
company and is registered as such under the Investment Company Act of 1940, as
amended, (hereinafter the "1940 Act") and has filed its registration statement
with the Securities and Exchange Commission, (hereinafter "S.E.C."), which
declared such registration statement effective on October 5, 1983;

WHEREAS, the Distributor is registered as a broker-dealer with the S.E.C.
under the Securities Exchange Act of 1934, as amended, (hereinafter the "1934
Act"), and is a member in good standing of the National Association of
Securities Dealers, Inc. (hereinafter "NASD");

WHEREAS, the Trust is available to act as the investment vehicle for separate
accounts established for variable annuity contracts and variable life insurance
contracts offered or to be offered by insurance companies which have entered
into participation agreements with the Trust and the Distributor (hereinafter
"Participating Insurance Companies");

WHEREAS, the Trust has obtained an order from the S.E.C., dated November 23,
1994 (File No. 812-9128), granting Participating Insurance Companies and
variable annuity and variable life insurance separate accounts exemptions from
the provisions of Sections 9(a), 13(a), 15(a) and 15(b) of the 1940 Act and
Rules 6e-2(b)(15) and 6e-3(T)(b)(15) thereunder, to the extent necessary to
permit shares of the Trust to be sold to and held by variable annuity and
variable life insurance separate accounts of both affiliated and unaffiliated
life insurance companies (hereinafter the "Shared Funding Exemptive Order");

WHEREAS, the Trust is presently comprised of eleven Portfolios designated as
the Money Market Portfolio, the Quality Income Plus Portfolio, the High Yield
Portfolio, the Utilities Portfolio, the Dividend Growth Portfolio, the Capital
Growth Portfolio, the Global Dividend Growth Portfolio, the European Growth
Portfolio, the Pacific Growth Portfolio, the Equity Portfolio and the Strategist
Portfolio, and other Portfolios may be subsequently established by the Trust
(hereinafter the "Portfolios");

WHEREAS, the Portfolios of the Trust offered by the Trust to the Companies and
the Accounts are set forth on Schedule A attached hereto;

WHEREAS, the Companies will issue certain variable annuity and/or variable
life insurance contracts (hereinafter the "Contracts") which, if required by
applicable law, will be registered under the Securities Act of 1933, as amended,
(hereinafter the "1933 Act");

WHEREAS, the Accounts are duly organized, validly existing segregated asset
accounts, established by resolution of the Board of Directors of the applicable
Company, to set aside and invest assets attributable to the Contracts that are
allocated to the Accounts (the Contracts and the Accounts covered by this
Agreement, and each corresponding Portfolio covered by this Agreement in which
the Accounts invest, are specified in Schedule A attached hereto as such
Schedule A may be amended from time to time);

WHEREAS, the Companies have registered or will register the Accounts as unit
investment trusts under the 1940 Act (unless exempt therefrom);

<PAGE>

WHEREAS, to the extent permitted by applicable insurance laws and regulations,
each Company intends by purchasing shares of the Portfolios on behalf of the
Accounts to fund the Contracts and the Distributor is authorized to sell such
shares to the Companies for the benefit of the Accounts at net asset value
without the imposition of any charges;

NOW, THEREFORE, in consideration of their mutual promises, each Company, the
Trust and the Distributor agree as follows:

1. Purchase of Shares. In accordance with the Trust's and the Distributor's
Distribution Agreement dated June 30, 1993, as amended as of March 15, 1995,
(the "Distribution Agreement"), the Company agrees to purchase and redeem the
Trust shares of each Portfolio offered by the then current prospectus of the
Trust (hereinafter the "Prospectus") included in the Trust's registration
statement (hereinafter "the Registration Statement") most recently filed from
time to time with the S.E.C. and effective under the 1933 Act and the 1940 Act
or as the Prospectus may be amended or supplemented and filed with the S.E.C.
pursuant to the 1933 Act. The Portfolios to be offered to each Account are set
forth on Schedule A attached hereto.

2. Sale of Shares. The Distributor agrees to sell shares of the Trust to the
Company for allocation to the Account as orders from the Company are received at
the next determined net asset value per share after receipt by the Trust or its
designee of the order for shares of the Trust, of the applicable Portfolio
determined as set forth in the Prospectus.

3. Redemption of Shares. At the Company's request, the Trust agrees to redeem
for cash without charge, any full or fractional shares of the Trust held by the
Company, executing such requests on a daily basis at the net asset value of
applicable Portfolio computed after receipt of the redemption request provided,
however, that the Trust reserves the right to suspend the right of redemption or
to postpone the date of payment upon redemption of the shares of any Portfolio
under the circumstances and for the period of time specified in the Prospectus.

4. Availability of Shares. Subject to Sections 3(c) and 4(b) of the
Distribution Agreement, the terms of which are incorporated herein by reference,
the Trust agrees to make its shares available indefinitely for purchase by the
Company.

5. Payment of Shares. The Company shall pay for Trust shares within five days
after it places the order for Trust shares. The Trust reserves the right to
delay issuing or transferring Trust shares and/or to delay accruing or declaring
dividends in accordance with any policy set forth in its then current prospectus
with respect to such shares until any payment check has cleared. If the Trust or
the Distributor does not receive payment within the five days period, the Trust
may, without notice, cancel the order and require the Company to reimburse the
Trust promptly for any loss the Trust suffered by reason of the Company failing
to timely pay for its shares.

6. Fee for Shares. The Company shall purchase and redeem shares in the Trust
at net asset value and the Company shall not pay any commission, dealers fee or
other fee to the Distributor or any other broker dealer.

7. Trust's Registration Statement and Prospectus. The Trust shall amend the
Registration Statement for its shares under the 1933 Act and the 1940 Act from
time to time as required in order to effect the continuous offering of its
shares and, at its own expense, shall provide the Company with as many copies of
its current prospectus as the Company may reasonably request.

8. Investment of Assets. The Trust agrees to invest its assets in accordance
with Section 817(h) of the Internal Revenue Code and Treasury Regulation
1.817-5, as amended from time to time, and any Treasury interpretations thereof,
relating to the diversification requirements for variable annuity contracts and
any amendments or other modifications to such Section or Regulations.

9. Administration of Contracts. The Company shall be responsible for
administering the Contracts and keeping records on the Contracts.

<PAGE>

10. Stockholder Information. The Trust shall furnish the Company copies of its
proxy material, reports to stockholders and other communication to stockholders
in such quantity as the Company shall reasonably require for distributing to
owners or participants under the Contracts. The Company will distribute these
materials to such owners or participants as required.

11. Voting. (a) To the extent required by law, the Company shall vote Trust
shares in accordance with instructions received from contract owners. If,
however, the 1940 Act or any regulation thereunder should be amended or if the
present interpretation thereof should change, and as a result the Company
determines that it is permitted to vote the Trust's shares in its own right, it
may elect to do so. The Company shall vote shares of a Portfolio for which no
instructions have been received in the same proportion as the vote of
shareholders of such Portfolio from which instructions have been received.
Neither the Company nor persons under its control shall recommend action in
connection with solicitation of proxies for Trust shares allocated to the
Account. The Company shall also vote shares it owns that are not attributable to
contract owners in the same proportion. Participating Insurance Companies shall
be responsible for assuring that each of their separate accounts participating
in the Trust calculates voting privileges in a manner consistent with other
Participating Insurance Companies.

(b) The Trust will comply with all provisions of the 1940 Act requiring voting
by shareholders, and in particular the Trust will either provide for annual
meetings or comply with Section 16(c) of the 1940 Act (although the Trust is not
one of the trusts described in Section 16(c) of that Act) as well as with
Section 16(a) and, if and when applicable, 16(b). Further, the Trust will act in
accordance with the S.E.C.'s interpretation of the requirements of Section 16(a)
with respect to periodic elections of trustees and with whatever rules the
S.E.C. may promulgate with respect thereto.

12. Company Approval. The Trust and the Distributor agree that the approval of
the Company will be required prior to the Trust and the Distributor entering
into any new agreements to sell shares of the Trust to other Participating
Companies.

13. Trust's Warranty. The Trust represents and warrants that Trust shares sold
pursuant to this Agreement shall be registered under the 1933 Act and duly
authorized for issuance in accordance with all applicable federal and state
laws.

14. Company's Warranty. Each of Northbrook Life Insurance Company and
Glenbrook Life and Annuity Company represents and warrants that it is an
insurance company duly organized and in good standing under Illinois law and
that it has legally and validly established the Accounts under Section 245.21 of
the Illinois Insurance Code. Allstate Life Insurance Company of New York
represents and warrants that it is an insurance company duly organized and in
good standing under New York law and that it has legally and validly established
the Accounts under Section 424.40 of the New York Insurance Laws. The Company
represents that it has registered the Accounts as unit investment trusts in
accordance with the provisions of the 1940 Act, unless exempt therefrom, to
serve as segregated investment accounts for certain Contracts. The Company
further represents and warrants that the Contracts will be registered under the
1933 Act, unless exempt therefrom, and the Contracts will be issued and sold in
compliance with all applicable Federal and State laws.

15. Distributor's Warranty. The Distributor represents and warrants that it is
a member in good standing of the NASD and is registered as a broker-dealer with
the S.E.C. under the 1934 Act. The Distributor further represents that it will
sell and distribute the shares in accordance with the 1933, 1934 and 1940 Acts
and will not make any representations concerning the Account except those
contained in the then current registration statement or related prospectus and
any sales literature approved by the Trust. For purposes of this paragraph,
Section 6 of the Distribution Agreement is incorporated in this Agreement.

16. Termination of Agreement. The parties may terminate this Agreement as
follows:

(1)(a) at the option of the Company or the Trust or the Distributor upon 90
days' written notice to the other party;

<PAGE>

(b) at the option of the Company if, for any reason, except for those
specified in Sections 3(c) and 4(b) of the Distribution Agreement, Trust
shares are not available to meet the requirements of the Contracts as
determined by the Company; or

(c) at the option of the Trust upon the NASD, the S.E.C., the Illinois
Insurance Commissioner, the New York Insurance Commissioner or any other
regulatory body instituting legal proceedings against the Company
regarding its duties under this Agreement.

(2) This Agreement shall automatically terminate in the event of its
assignment.

17. Company's Indemnification Agreement. (a) The Company agrees to indemnify
and hold harmless the Trust or Distributor and each of their Directors or
Trustees who is not an "interested person" of the Trust, as defined in the 1940
Act (collectively the "Indemnified Parties" for purposes of this paragraph 17)
against any losses, claims, damages, liabilities (including amounts paid in
settlement with the written consent of the Company) or expenses or actions to
which such Indemnified Parties may become subject, under the Federal securities
laws or otherwise, insofar as such losses, claims, damages, liabilities or
expenses (or actions in respect thereof) or settlements arise as a result of any
failure by the Company to provide the services and furnish the materials under
terms of this Agreement or which arise from erroneous instructions by the
Company to the Distributor concerning the particular Portfolio or Portfolios
whose shares are to be allocated to the Account. This indemnity agreement is in
addition to any liability which the Company may otherwise have. Provided,
however, that in no case is the indemnity of the Company in favor of the
Distributor deemed to protect the Distributor against any liability to the Trust
or its shareholders to which the Distributor would otherwise be subject by
reason of its bad faith, wilful misfeasance or negligence in the performance of
its duties or by reason of reckless disregard of its obligations and duties
under this Agreement.

(b) The Company will reimburse the Indemnified Parties for any legal or other
expenses reasonably incurred by the Indemnified Parties in connection with
investigating or defending of any such loss, claim, damage, liability or action.

(c) Promptly after receipt by any of the Indemnified Parties of notice of the
commencement of any action, or the making of any claim for which indemnity may
apply under this paragraph, the Indemnified Parties will, if a claim thereof is
to be made against the Trust, notify the Company of the commencement thereof;
but the omission so to notify the Company will not relieve the Company from any
liability which it may have to the Indemnified Parties otherwise than under this
Agreement. In case any such action is brought against the Indemnified Parties,
and the Company is notified of the commencement thereof, the Company will be
entitled to participate therein and to assume the defense thereof, with counsel
satisfactory to the party named in the action, and after notice from the Company
to such party of the Company's election to assume the defense thereof, the
Company will not be liable to such party under this Agreement for any legal or
other expenses subsequently incurred by such party independently in connection
with the defense thereof other than reasonable costs of investigation.

18. Trust and Distributor Indemnification Agreements. (a) The Trust and
Distributor each agree to indemnify and hold harmless the Company and each of
its Directors who is not an "interested person" of the Company, as defined in
the 1940 Act (collectively the "Company's Indemnified Parties" for purposes of
this paragraph 18) against any losses, claims, damages, liabilities (including
amounts paid in settlement with the written consent of the Trust) or expenses or
actions to which such Indemnified Parties may become subject, under the Federal
securities laws or otherwise, insofar as such losses, claims, damages,
liabilities or expenses (or actions in respect thereof) or settlements:

(i) arise as a result of any failure by the Trust or Distributor to
provide the services and furnish the materials under the terms of this
Agreement; or

(ii) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in registration statement
or prospectus or sales literature of the Trust (or any amendment or supplement
to any of the foregoing), or arise out of or are based upon the omission or
the alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, provided
that this Agreement to indemnify shall not

<PAGE>

apply as to the Company's Indemnified Parties if such statement or
omission was made in reliance upon and in conformity with information
furnished to the Trust or Distributor by or on behalf of the Company for
use in the registration statement or prospectus for the Trust or in sales
literature (or any amendment or supplement) or otherwise for use in
connection with the sale of the Contracts or Trust shares; or

(iii) arise out of or result from any material breach of any
representation and/or warranty made by the Trust or the Distributor in
this Agreement or arise out of or result from any other material breach of
this Agreement by the Trust or the Distributor, including a failure,
whether unintentional or in good faith or otherwise, to comply with the
requirements specified in paragraph 8 of this Agreement.

(b) The Trust represents and warrants that the Trust will at all times invest
its assets in such a manner as to ensure that the Contracts will be treated as
an annuity under the Internal Revenue Code and the regulations thereunder.
Without limiting the scope of the foregoing, the Trust will at all times comply
with Section 817(h) of the Code and Treas. Reg. Sec. 1.817-5, as amended from
time to time, and any Treasury interpretations thereof, relating to the
diversification requirements for variable annuity contracts and any amendments
or other modifications to such section or Regulations.

(c) Trust shares will not be sold to any person or entity that would result in
the Contracts not being treated as annuity contracts in accordance with the
statutes and regulations referred to in the preceding paragraph.

(d) The Trust and the Distributor will reimburse the Company for any legal or
other expenses reasonably incurred by the Company's Indemnified Parties in
connection with investigating or defending of any such loss, claim, damage,
liability or action.

(e) Promptly after receipt by any of the Company's Indemnified Parties of
notice of the commencement of any action, or the making of any claim for which
indemnity may apply under this paragraph, the Company's Indemnified Parties
will, if a claim in respect thereof is to be made against the Company, notify
the Trust or the Distributor of commencement thereof; but the omission so to
notify the Trust or the Distributor will not relieve the Trust or the
Distributor from any liability which it may have to the Company's Indemnified
Parties otherwise than under this Agreement. In case any such action is brought
against the Company's Indemnified Parties, and the Trust or the Distributor is
notified of the commencement thereof, the Trust or the Distributor will be
entitled to participate therein and to assume the defense thereof, with counsel
satisfactory to the party named in the action, and after notice from the Trust
or the Distributor to such party of the Trust's or the Distributor's election to
assume the defense thereof, the Trust or the Distributor will not be liable to
such party under this Agreement for any legal or other expenses subsequently
incurred by such party independently in connection with the defense thereof
other than reasonable costs of investigation.

19. Indemnification of Trust by or of Distributor. For purposes of this
Agreement, the Trust and the Distributor shall indemnify each other according to
the terms of the Distribution Agreement the terms of which are incorporated by
reference.

20. Potential Conflicts. (a) The Trustees of the Trust will monitor the
operations of the Trust for the existence of any material irreconcilable
conflict between the interests of the contract owners of all separate accounts
investing in the Trust. An irreconcilable material conflict may arise for a
variety of reasons, including: (i) an action by any state insurance regulatory
authority; (ii) a change in applicable Federal or state insurance, tax, or
securities laws or regulations, or a public ruling, private letter ruling,
no-action or interpretative letter, or any similar action by insurance, tax, or
securities regulatory authorities; (iii) an administrative or judicial decision
in any relevant proceeding; (iv) the manner in which the investments of any
Portfolio are being managed; (v) a difference in voting instructions given by
variable annuity contract and variable life insurance contract owners; or (vi) a
decision by an insurer to disregard the voting instructions of contract owners.
The Trustees shall promptly inform the Company if they determine that an
irreconcilable material conflict exists and the implications thereof.

<PAGE>

(b) The Company will report any potential or existing conflicts of which it is
aware to the Trustees of the Trust. The Company will assist the Trustees in
carrying out their responsibilities under the Shared Funding Exemptive Order, by
providing the Trustees with all information reasonably necessary for the
Trustees to consider any issues raised. This includes, but is not limited to, an
obligation by the Company to inform the Trustees whenever contract owner voting
instructions are disregarded.

(c) If it is determined by a majority of the Trustees, or a majority of the
Trustees who are not parties to this Agreement or interested persons of any such
party and who have no direct or indirect financial interest in this Agreement or
any agreement related thereto (the "Independent Trustees"), that a material
irreconcilable conflict exists, the Company shall, at its expense and to the
extent reasonably practicable (as determined by a majority of the Independent
Trustees), take whatever steps are necessary to remedy or eliminate the
irreconcilable material conflict, up to and including: (i) withdrawing the
assets allocable to the affected Account from the Trust or any Portfolio and
reinvesting such assets in a different investment medium, including (but not
limited to) another Portfolio of the Trust, or submitting the question whether
such segregation should be implemented to a vote of all affected contract owners
and, as appropriate, segregating the assets of variable annuity contract owners
invested in the Account from those of any other appropriate group (i.e., annuity
contract owners, life insurance contract owners, or variable contract owners of
one or more Participating Insurance Companies) that votes in favor of such
segregation, or offering to the contract owners the option of making such a
change; and (ii) establishing a new registered management investment company or
managed separate account.

(d) If a material irreconcilable conflict arises because of a decision by the
Company to disregard contract owner voting instructions and that decision
represents a minority position or would preclude a majority vote, the Company
may be required, at the Trust's election, to withdraw the Account's investment
in the Trust and terminate this Agreement; provided, however, that such
withdrawal and termination shall be limited to the extent required by the
foregoing material irreconcilable conflict as determined by a majority of the
Independent Trustees. Any such withdrawal and termination must take place within
six (6) months after the Trust gives written notice that this provision is being
implemented, and until the end of that six month period the Distributor and
Trust shall continue to accept and implement orders by the Company for the
purchase (and redemption) of shares of the Trust.

(e) If a material irreconcilable conflict arises because a particular state
insurance regulator's decision applicable to the Company conflicts with the
majority of other state regulators, then the Company will withdraw the Account's
investment in the Trust and terminate this Agreement within six months after the
Trustees inform the Company in writing that they have determined that such
decision has created an irreconcilable material conflict; provided, however,
that such withdrawal and termination shall be limited to the extent required by
the foregoing material irreconcilable conflict as determined by a majority of
the Independent Trustees. Until the end of the foregoing six month period, the
Distributor and Trust shall continue to accept and implement orders by the
Company for the purchase (and redemption) of shares of the Trust.

(f) For purposes of sections (c) through (f) of this paragraph, a majority of
the Independent Trustees shall determine whether any proposed action adequately
remedies any irreconcilable material conflict, but in no event will the Trust be
required to establish a new funding medium for the Contracts. The Company shall
not be required by section (c) to establish a new funding medium for the
Contracts if an offer to do so has been declined by vote of a majority of
contract owners materially adversely affected by the irreconcilable material
conflict. In the event that the Trustees determine that any proposed action does
not adequately remedy any irreconcilable material conflict, then the Company
will withdraw the Account's investment in the Trust and terminate this Agreement
within six (6) months after the Trustees inform the Company in writing of the
foregoing determination, provided, however, that such withdrawal and termination
shall be limited to the extent required by any such material irreconcilable
conflict as determined by a majority of the Independent Trustees.

(g) If and to the extent that Rule 6e-2 and Rule 6e-3(T) are amended, or Rule
6e-3 is adopted, to provide exemptive relief from any provision of the 1940 Act
or the rules promulgated thereunder with respect to mixed or shared funding (as
defined in the Shared Funding Exemptive Order) on terms and

<PAGE>

conditions materially different from those contained in the Shared Funding
Exemptive Order, then (a) the Trust and/or the Participating Insurance
Companies, as appropriate, shall take such steps as may be necessary to comply
with Rules 6e-2 and 6e-3(T), as amended, and Rule 6e-3, as adopted, to the
extent such Rules are applicable; and (b) paragraphs 11(a), 11(b), 20(a), 20(b),
20(c), 20(d), 20(e) and 20(f) of this Agreement shall continue in effect only to
the extent that terms and conditions substantially identical to such paragraphs
are contained in such Rule(s) as so amended or adopted.

21. Duration of this Agreement. This Agreement shall remain in force until
April 30, 1997 and from year to year thereafter, but only so long as such
continuance is specifically approved at least annually by the Trustees of the
Trust, or by the vote of a majority of the outstanding voting securities of the
Trust, cast in person or by proxy. This Agreement also may be terminated in
accordance with paragraph 16 hereof.

The terms "vote of a majority of the outstanding voting securities",
"assignment" and "interested person", when used in this Agreement, shall have
the respective meanings specified in the 1940 Act.

22. Amendments of this Agreement. This Agreement may be amended by the parties
only if such amendment is specifically approved by (i) the Trustees of the
Trust, or by the vote of a majority of outstanding voting securities of the
Trust, and (ii) a majority of those Trustees of the Trust who are not parties to
this Agreement or interested persons of any such party and who have no direct or
indirect financial interest in this Agreement or in any agreement related
thereto, cast in person at a meeting called for the purpose of voting on such
approval.

23. Governing Law. This Agreement shall be construed in accordance with the
law of the State of Illinois and the applicable provisions of the 1933, 1934 and
1940 Acts and the rules and regulations and rulings thereunder including such
exemptions from those statutes, rules and regulations as the S.E.C. may grant
and the terms hereof shall be interpreted and construed in accordance therewith.
To the extent the applicable law of the State of Illinois, or any of the
provisions herein, conflict with the applicable provisions of the 1940 Act, the
latter shall control. If any provision of this Agreement shall be held or made
invalid by a court decision, statute, rule or otherwise the remainder of the
Agreement shall not be affected thereby.

24. Personal Liability. The Declaration of Trust establishing Dean Witter
Variable Investment Series, dated February 24, 1983, a copy of which, together
with all amendments thereto (the "Declaration"), is on file in the office of the
Secretary of the Commonwealth of Massachusetts, provides that the name Dean
Witter Variable Investment Series refers to the Trustees under the Declaration
collectively as Trustees, but not as individuals or personally; and no Trustee,
shareholder, officer, employee or agent of Dean Witter Variable Investment
Series shall be held to any personal liability, nor shall resort be had to their
private property for the satisfaction of any obligation or claim or otherwise,
in connection with the affairs of said Dean Witter Variable Investment Series,
but the Trust Estate only shall be liable.

<PAGE>

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of April 17, 1996.

Companies:

NORTHBROOK LIFE INSURANCE COMPANY

By:
-----------------------------------
ATTEST:
- ---------------------------------------------------------------------

ALLSTATE LIFE INSURANCE COMPANY
OF NEW YORK

By:
-----------------------------------
ATTEST:
- ---------------------------------------------------------------------

GLENBROOK LIFE AND ANNUITY COMPANY

By:
-----------------------------------
ATTEST:
- ---------------------------------------------------------------------
Trust:

DEAN WITTER VARIABLE INVESTMENT
SERIES

By:
-----------------------------------
ATTEST:
- ---------------------------------------------------------------------

Distributor:

DEAN WITTER DISTRIBUTORS INC.

By:
-----------------------------------
ATTEST:
- ---------------------------------------------------------------------

<PAGE>

As of April 17, 1996

SCHEDULE A
ACCOUNTS AND PORTFOLIOS
SUBJECT TO THE PARTICIPATION AGREEMENT

NAME OF SEPARATE ACCOUNT AND
NAME OF DATE ESTABLISHED BY BOARD OF FUND PORTFOLIOS
APPLICABLE
INSURANCE COMPANY DIRECTORS TO CONTRACTS
- ------------- ------------ ---------------

Northbrook Variable Annuity
Northbrook Life Insurance Company Account (February 14, 1983) All
- ----------------------------- -------------------------- -----------------------
Northbrook Variable Annuity
Account II (May 18, 1990)
- -------------------------------- -----------------------
Northbrook Variable Annuity
Account III (April 8, 1996)
- -------------------------------- -----------------------
Northbrook Life Variable Life
Separate Account A (January
15, 1996)
- -------------------------------- ----------------------- -----------------------
Allstate Life of New York
Allstate Life Insurance Company Variable Annuity Account
of New York (June 26, 1987) All
- -------------------------------- ----------------------- -----------------------
Allstate Life of New York
Variable Annuity Account II
(June 28, 1990)
- -------------------------------- ----------------------- -----------------------
Glenbrook Life Multi-Manager
Variable Account (January 15,
Glenbrook Life and Annuity Company 1996) All
- -------------------------------- ----------------------- -----------------------
Glenbrook Life Variable Life Dividend Growth Portfolio European
Separate Account A (January Growth Portfolio Quality Income Plus
15, 1996) Portfolio Utilities Portfolio
- -------------------------------- ----------------------- -----------------------

<PAGE>

EXHIBIT 10(a)

CONSENT OF ACCOUNTANTS

<PAGE>

INDEPENDENT AUDITORS' CONSENT

We consent to the use in this Post-Effective Amendment No. 20 to Registration
Statement No. 2-82511 on Form N-4, of our report dated March 1, 1996
accompanying the financial statements of Northbrook Variable Annuity Account and
our report dated March 1, 1996 accompanying the financial statements and
financial statement schedule of Northbrook Life Insurance Company contained in
the Statement of Additional Information (which is incorporated by reference in
the Prospectus of Northbrook Variable Annuity Account of Northbrook Life
Insurance Company) which is part of such Registration Statement, and to the
reference to us under the heading "Experts" in such Statement of Additional
Information.

/s/ DELOITTE & TOUCHE LLP

Chicago, Illinois
April 25, 1996

<PAGE>
VAI
FEE TABLE WORKSHEET

<TABLE>
<S> <C> <C> <C>
Initial deposit 1000 SURRENDER CHARGE SCHEDULE
Contract fee 30 End of Year SC
Assets -- beginning of year (in thousands) 385477 1 5%
Assets -- end of year (in thousands) 362287 2 4%
Average assets 373882 3 3%
Contract fees collected ($) 322696.87 4 2%
Contract fee per $1000 0.863098170010859 5 1%
Interest assumption 5.00% 6 0%
Free -AV(1)/Prem(2) 2 7 0%
Free amount 10% 8 0%
9 0%
10 0%

SEPARATE ACCOUNT EXPENSES
M&E and admin 1.00%

PORTFOLIO EXPENSES
Management Other
Fees Expenses
Capital Growth 0.65% 0.09%
Dividend Growth 0.59% 0.02%
Equity 0.50% 0.04%
European Growth 1.00% 0.17%
Global Dividend Growth 0.75% 0.13%
High Yield 0.50% 0.04%
Money Market 0.50% 0.03%
Pacific Growth 1.00% 0.44%
Quality Income Plus 0.50% 0.04%
Strategist 0.50% 0.02%
Utilities 0.65% 0.03%
</TABLE>

<PAGE>

EXHIBIT 99

POWER OF ATTORNEY

WITH RESPECT TO THE NORTHBROOK LIFE INSURANCE COMPANY
VARIABLE ANNUITY ACCOUNT CONTRACT

Know all men by these presents that Lawrence P. Moews whose signature
appears below, constitutes and appoints Louis G. Lower, II, and Michael J.
Velotta, and each of them, his attorneys-in-fact, with power of substitution,
and him in any and all capacities, to sign any registration statements and
amendments thereto for the Northbrook Life Insurance Company Variable Annuity
Account Contract 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.

April 26, 1996
--------------------------------------
Date

/s/ Lawrence P. Moews
--------------------------------------
Lawrence P. Moews
Director
Northbrook Life Insurance Company

<PAGE>

POWER OF ATTORNEY

WITH RESPECT TO THE NORTHBROOK LIFE INSURANCE COMPANY
VARIABLE ANNUITY ACCOUNT CONTRACT

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 attorneys-in-fact, with power of substitution, and him in any
and all capacities, to sign any registration statements and amendments thereto
for the Northbrook Life Insurance Company Variable Annuity Account Contract 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.

April 26, 1996
--------------------------------------
Date

/s/ Casey J. Sylla
--------------------------------------
Casey J. Sylla
Chief Investment Officer & Director
Northbrook Life Insurance Company

<PAGE>

POWER OF ATTORNEY

WITH RESPECT TO THE NORTHBROOK LIFE INSURANCE COMPANY
VARIABLE ANNUITY ACCOUNT CONTRACT

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 attorneys-in-fact, with power of substitution, and him in any
and all capacities, to sign any registration statements and amendments thereto
for the Northbrook Life Insurance Company Variable Annuity Account Contract 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.

April 26, 1996
--------------------------------------
Date

/s/ James P. Zils
--------------------------------------
James P. Zils
Treasurer
Northbrook Life Insurance Company

<PAGE>

POWER OF ATTORNEY

WITH RESPECT TO THE NORTHBROOK LIFE INSURANCE COMPANY
VARIABLE ANNUITY ACCOUNT CONTRACT

Know all men by these presents that Barry S. Paul whose signature appears
below, constitutes and appoints Louis G. Lower, II, and Michael J. Velotta, and
each of them, his attorneys-in-fact, with power of substitution, and him in any
and all capacities, to sign any registration statements and amendments thereto
for the Northbrook Life Insurance Company Variable Annuity Account Contract 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.

April 26, 1996
--------------------------------------
Date

/s/ Barry S. Paul
--------------------------------------
Barry S. Paul
Controller
Northbrook Life Insurance Company