FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended: September 30, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission file number: 33-90272
33-84480
33-50884
NORTHBROOK LIFE INSURANCE COMPANY
(Exact name of registrant as specified in its charter)
ILLINOIS 36-3001527
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
3100 Sanders Road
Northbrook, Illinois 60062
(Address of principal executive offices)
(Zip Code)
847/402-5000
(Registrant's telephone number, including area code)
Not Applicable
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes../X/.. No
Indicate the number of shares of each of the issuer's classes of common
stock, as of September 30, 1998; there were 25,000 shares of common capital
stock outstanding, par value $100 per share all of which shares are held by
Allstate Life Insurance Company.
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements Page
Statements of Financial Position As Of
September 30, 1998 (Unaudited) and December 31, 1997 3
Statements of Operations
Three Months Ended September 30, 1998
and September 30, 1997 (Unaudited)
Nine Months Ended September 30, 1998
and September 30, 1997 (Unaudited) 4
Statements of Cash Flows
Nine Months Ended September 30, 1998
and September 30, 1997(Unaudited) 5
Notes to Financial Statements (Unaudited) 6
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 10
Item 3. Quantitative and Qualitative Disclosure about Market Risk* N/A
PART II - OTHER INFORMATION
Item 1. Legal Proceedings 14
Item 2. Changes in Securities and use of Proceeds* N/A
Item 3. Defaults Upon Senior Securities* N/A
Item 4. Submission of Matters to a Vote of Security Holders* N/A
Item 5. Other Information 14
Item 6. Exhibits and Reports on Form 8-K 14
Signature Page
*Omitted pursuant to General Instruction H(2) of Form 10-Q
<PAGE>
NORTHBROOK LIFE INSURANCE COMPANY
STATEMENTS OF FINANCIAL POSITION
<TABLE>
<CAPTION>
September 30, December 31,
1998 1997
--------------------- --------------------
($ in thousands) (Unaudited)
<S> <C> <C>
ASSETS
Investments
Fixed income securities at fair value (amortized
cost $80,707 and $72,491) $ 87,259 $ 76,402
Short-term 3,133 3,031
------------ ------------
Total investments 90,392 79,433
Reinsurance recoverable from Allstate Life
Insurance Company 2,169,481 2,293,094
Net receivable from affiliates - 1,467
Cash 24 -
Other assets 8,364 5,033
Separate Accounts 6,205,220 5,719,203
------------ ------------
Total assets $ 8,473,481 $ 8,098,230
============ ============
LIABILITIES
Reserve for life-contingent contract benefits $ 144,680 $ 144,352
Contractholder funds 2,024,885 2,148,555
Income taxes payable 963 162
Deferred income taxes 3,720 2,674
Net payable to affiliates 6,234 -
Separate Accounts 6,205,220 5,719,203
------------ ------------
Total liabilities 8,385,702 8,014,946
------------ ------------
Commitments and Contingent Liabilities (Note 4)
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
Retained income 24,421 21,642
Accumulated other comprehensive income:
Unrealized net capital gains 4,258 2,542
------------ ------------
Total accumulated other comprehensive income 4,258 2,542
------------ ------------
Total shareholder's equity 87,779 83,284
------------ ------------
Total liabilities and shareholder's equity $ 8,473,481 $ 8,098,230
============ ============
</TABLE>
See notes to financial statements.
-3-
<PAGE>
NORTHBROOK LIFE INSURANCE COMPANY
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Three months ended Nine months ended
September 30, September 30,
----------------------------------- -----------------------------------
($ in thousands) 1998 1997 1998 1997
----------------- ---------------- ---------------- -----------------
(Unaudited)
<S> <C> <C> <C> <C>
REVENUES
Net investment income $ 1,457 $ 1,310 $ 4,267 $ 3,838
Realized capital gains and losses 12 1 12 (68)
-------- ------- -------- -------
INCOME BEFORE INCOME
TAX EXPENSE 1,469 1,311 4,279 3,770
INCOME TAX EXPENSE 524 454 1,500 1,304
-------- ------- -------- -------
NET INCOME $ 945 $ 857 $ 2,779 $ 2,466
======== ======= ======== =======
</TABLE>
See notes to financial statements.
-4-
<PAGE>
NORTHBROOK LIFE INSURANCE COMPANY
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Nine months ended
September 30,
---------------------------------------------
($ in thousands) 1998 1997
-------------------- --------------------
(Unaudited)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 2,779 $ 2,466
Adjustments to reconcile net income to net cash
provided by operating activities
Amortization and other non-cash items 397 316
Realized capital gains and losses (12) 68
Changes in life-contingent contract benefits and
contractholder funds 271 122
Changes in deferred income taxes 121 17
Changes in other operating assets and liabilities 4,605 (126)
---------- ----------
Net cash provided by operating activities 8,161 2,863
---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES
Fixed income securities
Proceeds from sales - 1,606
Investment collections 7,681 3,709
Investment purchases (15,782) (12,173)
Change in short-term investments, net (36) 4,257
---------- ----------
Net cash used in investing activities (8,137) (2,601)
---------- ----------
NET INCREASE IN CASH 24 262
CASH AT BEGINNING OF PERIOD - -
---------- ----------
CASH AT END OF PERIOD $ 24 $ 262
========== ==========
</TABLE>
See notes to financial statements.
-5-
<PAGE>
NORTHBROOK LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
1. Basis of Presentation
The accompanying financial statements include the accounts of Northbrook
Life Insurance Company (the "Company"), a wholly owned subsidiary of Allstate
Life Insurance Company ("ALIC"), which is wholly owned by Allstate Insurance
Company, a wholly owned subsidiary of The Allstate Corporation (the
"Corporation").
The financial statements and notes as of September 30, 1998 and for the
three month and nine month periods ended September 30, 1998 and 1997 are
unaudited. The financial statements reflect all adjustments (consisting only of
normal recurring accruals) which are, in the opinion of management, necessary
for the fair presentation of the financial position, results of operations and
cash flows for the interim periods. The financial statements and notes should be
read in conjunction with the financial statements and notes thereto included in
the Northbrook Life Insurance Company Annual Report on Form 10-K for 1997. The
results of operations for the interim period should not be considered indicative
of results to be expected for the full year.
Effective January 1, 1998, the Company adopted Statement of Financial
Accounting Standards No. 130, "Reporting Comprehensive Income." Comprehensive
income is a measurement of certain changes in shareholder's equity that result
from transactions and other economic events other than transactions with
shareholders. For the Company, these consist of changes in unrealized gains and
losses on the investment portfolio. These amounts, presented as other
comprehensive income, net of related taxes, are added to net income which
results in comprehensive income. The required disclosures are presented in Note
3.
In March 1998, the Accounting Standards Executive Committee of the American
Institute of Certified Public Accountants issued Statement of Position ("SOP")
98-1, "Accounting for the Costs of Computer Software Developed or Obtained for
Internal Use." The SOP provides guidance on accounting for the costs of computer
software developed or obtained for internal use. Specifically, certain external,
payroll and payroll related costs should be capitalized during the application
development stage of a software development project and depreciated over the
computer software's useful life. The Company has adopted the SOP effective
January 1, 1998.
-6-
<PAGE>
NORTHBROOK LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
In December 1997, the Accounting Standards Executive Committee of the
American Institute of Certified Public Accountants issued SOP 97-3, "Accounting
by Insurance and Other Enterprises for Insurance-Related Assessments." The SOP
is required to be adopted in 1999. The SOP provides guidance concerning when to
recognize a liability for insurance-related assessments and how those
liabilities should be measured. Specifically, insurance-related assessments
should be recognized as liabilities when all of the following criteria have been
met: 1) an assessment has been imposed or it is probable that an assessment will
be imposed, 2) the event obligating an entity to pay an assessment has occurred
and 3) the amount of the assessment can be reasonably estimated. The
requirements of this SOP are not expected to have a material impact on the
results of operations, cash flows or financial position of the Company. The
Company expects to adopt the SOP as of January 1, 1999.
2. Reinsurance
The Company has reinsurance agreements whereby all premiums, contract
charges, credited interest, policy benefits and certain expenses are ceded to
ALIC and reflected net of such cessions in the statements of operations. The
amounts shown in the Company's statements of operations relate to the investment
of those assets of the Company that are not transferred to ALIC under
reinsurance agreements. Reinsurance recoverable and the related reserve for
life-contingent contract benefits and contractholder funds are reported
separately in the statements of financial position. The Company continues to
have primary liability as the direct insurer for risks reinsured.
Investment income earned on the assets which support contractholder funds
and the reserve for life-contingent contract benefits is not included in the
Company's financial statements as those assets are owned and managed by ALIC
under the terms of reinsurance agreements. The following amounts were ceded to
ALIC under reinsurance agreements.
<TABLE>
<CAPTION>
Three months ended Nine months ended
September 30, September 30,
------------------------------- -------------------------------
($ in thousands) 1998 1997 1998 1997
-------------- ------------- -------------- -------------
<S> <C> <C> <C> <C>
Premiums $ 883 $ 549 $ 1,893 $ 1,369
Contract charges 25,684 23,938 76,317 60,519
Credited interest, policy
benefits, and other expenses 56,573 47,674 162,303 143,899
</TABLE>
-7-
<PAGE>
NORTHBROOK LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
3. Comprehensive Income
The components of other comprehensive income on a pretax and after-tax
basis are as follows:
<TABLE>
<CAPTION>
Three months ended September 30,
---------------------------------------------------------------------------
($ in thousands) 1998 1997
---------------------------------- --------------------------------------
Income Income
tax After- tax After-
Pretax effect tax Pretax effect tax
------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
Unrealized capital gains and losses:
Unrealized holding gains
arising during the period $ 2,235 $ (783) $ 1,452 $ 1,294 $ (452) $ 842
Less: reclassification adjust-
ment for realized net
capital gains included in
net income 12 (4) 8 1 - 1
------- ------- ------- -------- ------- ------
Other comprehensive income $ 2,223 $ (779) $ 1,444 $ 1,293 $ (452) $ 841
======= ======= ------- ======== ======= ------
Net income 945 857
------- ------
Comprehensive income $ 2,389 $1,698
======= ======
Nine months ended September 30,
---------------------------------------------------------------------------
($ in thousands) 1998 1997
---------------------------------- --------------------------------------
Income Income
tax After- tax After-
Pretax effect tax Pretax effect tax
------ ------ ------ ------ ------ ------
Unrealized capital gains and losses:
Unrealized holding gains
arising during the period $ 2,653 $ (929) $ 1,724 $ 998 $ (348) $ 650
Less: reclassification adjust-
ment for realized net
capital gains included in
net income 12 (4) 8 (68) 24 (44)
------- ------ ------- ------- -------- -------
Other comprehensive income $ 2,641 $ (925) $ 1,716 $ 1,066 $ (372) $ 694
======= ====== ------- ======= ======== -------
Net income 2,779 2,466
------- -------
Comprehensive income $ 4,495 $ 3,160
======= =======
</TABLE>
-8-
<PAGE>
NORTHBROOK LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
4. Regulation and Legal Proceedings
The Company's business is subject to the effects of a changing social,
economic and regulatory environment. Public and regulatory initiatives have
varied and have included employee benefit regulation, removal of barriers
preventing banks from engaging in the securities and insurance business, tax law
changes affecting the taxation of insurance companies, the tax treatment of
insurance products and its impact on the relative desirability of various
personal investment vehicles, and proposed legislation to prohibit the use of
gender in determining insurance rates and benefits. The ultimate changes and
eventual effects, if any, of these initiatives are uncertain.
From time to time the Company is involved in pending and threatened
litigation in the normal course of its business in which claims for monetary
damages are asserted. In the opinion of management, the ultimate liability, if
any, arising from such pending or threatened litigation is not expected to have
a material effect on the results of operations, liquidity or financial position
of the Company.
-9-
<PAGE>
Northbrook Life Insurance Company
Management's Discussion and Analysis
of Financial Condition and Results of Operations
The following discussion highlights significant factors influencing results
of operations and changes in financial position of Northbrook Life Insurance
Company (the "Company"). It should be read in conjunction with the financial
statements and notes thereto found under Part I. Item 1 contained herein and the
discussion, analysis, financial statements and notes thereto in Part II. Item 7
and Item 8 of the Northbrook Life Insurance Company Annual Report on Form 10-K
for 1997.
The Company, a wholly owned subsidiary of Allstate Life Insurance Company
("ALIC"), which is wholly owned by Allstate Insurance Company ("AIC"), a wholly
owned subsidiary of The Allstate Corporation (the "Corporation"), markets life
insurance and annuity products through Dean Witter Reynolds Inc., a wholly owned
subsidiary of Morgan Stanley Dean Witter & Co. Life insurance policies sold by
the Company include universal life and other interest-sensitive life and
variable life products. Annuity contracts include both deferred annuities, such
as variable annuities and fixed rate single and flexible premium annuities, and
immediate annuities.
Flexible premium deferred variable annuity contracts and variable life
policies are legally segregated and reflected as Separate Account assets and
liabilities and are carried at fair value in the statements of financial
position. Investment income and realized gains and losses of the Separate
Accounts accrue directly to the contractholders (net of fees) and, therefore,
are not included in the Company's statements of operations.
<TABLE>
<CAPTION>
Results of Operations
($ in thousands)
Three months ended Nine months ended
September 30, September 30,
--------------------------------- ---------------------------------
1998 1997 1998 1997
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
Net investment income $ 1,457 $ 1,310 $ 4,267 $ 3,838
======== ======== ======== ========
Realized capital gains and
losses, after-tax $ 8 $ 1 $ 8 $ (44)
======== ======== ======== ========
Net income $ 945 $ 857 $ 2,779 $ 2,466
======== ======== ======== ========
Investments $ 90,392 $ 77,772 $ 90,392 $ 77,772
======== ======== ======== ========
</TABLE>
The Company and ALIC have reinsurance agreements under which all contract
and policy related transactions are transferred to ALIC. The Company's results
of operations include only investment income and realized capital gains and
losses earned on the assets of the Company that are not transferred to ALIC
under the reinsurance agreements.
Net income for the three month and nine month periods ended September 30,
1998 increased $88 thousand and $313 thousand, respectively, compared with the
same periods in 1997. The increase in net income was primarily due to increased
investment income.
Pretax net investment income increased 11.2% in the third quarter and the
first nine months of 1998 from the comparable 1997 periods. Investment income
earned on higher investment balances was partially offset by lower portfolio
yields.
-10-
<PAGE>
Northbrook Life Insurance Company
Management's Discussion and Analysis
of Financial Condition and Results of Operations
(Continued)
Financial Position
($ in thousands)
<TABLE>
<CAPTION>
September 30, December 31,
1998 1997
---------------- ----------------
<S> <C> <C>
Fixed income securities (1) $ 87,259 $ 76,402
Short-term investments 3,133 3,031
---------------- ----------------
Total investments $ 90,392 $ 79,433
================ ================
Reinsurance recoverable from ALIC $ 2,169,481 $ 2,293,094
================ ================
Separate Account assets and liabilities $ 6,205,220 $ 5,719,203
================ ================
Contractholder funds $ 2,024,885 $ 2,148,555
================ ================
</TABLE>
(1) Fixed income securities are carried at fair value. Amortized cost
for these securities was $80,707 and $72,491 at September 30, 1998 and
December 31, 1997, respectively.
The Company's fixed income securities portfolio consists of mortgage-backed
securities, publicly traded corporate bonds, U.S. government bonds and municipal
bonds. The Company generally holds its fixed income securities for the long
term, but has classified all of these securities as available for sale to allow
maximum flexibility in portfolio management.
Total investments increased to $90.4 million at September 30, 1998 from
$79.4 million at December 31, 1997. The increase in investments is primarily due
to amounts invested from positive cash flows generated from operations and an
increase in unrealized net capital gains on fixed income securities. At
September 30, 1998, unrealized net capital gains on fixed income securities were
$6.6 million compared to $3.9 million at December 31, 1997.
The Company's fixed income securities portfolio is rated investment grade,
with a National Association of Insurance Commissioners rating of 1 or 2 or a
Moody's rating of Aaa, Aa, A, or Baa, or a comparable Company internal rating.
The carrying value of the Company's short-term investment portfolio was
$3.1 million and $3.0 million at September 30, 1998 and December 31, 1997,
respectively. The Company generally invests available cash balances primarily in
taxable short-term securities having a final maturity date or redemption date of
one year or less.
During the nine months ended September 30, 1998, contractholder funds
decreased by $123.7 million and reinsurance recoverable from ALIC under
reinsurance agreements decreased by $123.6 million. Sales of fixed annuity
contracts and interest credited to contractholders were more than offset by
fixed annuity surrenders, withdrawals, policyholder transfers from fixed annuity
contracts to variable annuity contracts and benefits paid. Reinsurance
recoverable from ALIC relates to contract benefit obligations ceded to ALIC.
Separate Account assets and liabilities increased by $486.0 million,
primarily attributable to sales of variable annuity contracts, the favorable
investment performance of the Separate Account investment portfolios and
transfers from fixed annuity contracts, partially offset by variable annuity
surrenders, withdrawals and fees.
-11-
<PAGE>
Northbrook Life Insurance Company
Management's Discussion and Analysis
of Financial Condition and Results of Operations
(Continued)
Liquidity and Capital Resources
Under the terms of reinsurance agreements, premiums and deposits on life
insurance policies and annuity contracts, excluding those relating to Separate
Accounts, are transferred to ALIC, which maintains the investment portfolios
supporting the Company's products. The Company continues to have primary
liability as the direct insurer for risks reinsured.
Year 2000
The Company is heavily dependent upon complex computer systems for all
phases of its operations, including customer service, policy and contract
administration, investment processing and other enterprise systems. Since many
of the Company's older computer software programs recognize only the last two
digits of the year in any date, some software may fail to operate properly in or
after the year 1999, if the software is not reprogrammed, remediated, or
replaced ("Year 2000"). Also, many systems and equipment that are not typically
thought of as computer-related (referred to as "non-IT") contain imbedded
hardware or software that may have a Year 2000 sensitive component. The Company
believes that many of its counterparties and suppliers also have Year 2000
issues and non-IT issues which could affect the Company.
In 1995, the Corporation commenced a plan consisting of four phases which
are intended to mitigate and/or prevent the adverse affects of the Year 2000
issues on its systems: (1) assessment and analysis of affected systems and
equipment; (2) remediation and compliance of systems and equipment through
strategies that include the enhancement of new and existing systems, upgrades to
operating systems already covered by maintenance agreements and modifications to
existing systems to make them Year 2000 compliant; (3) testing of systems and
equipment using clock-forward testing for both current and future dates and for
dates which trigger specific processing; and (4) contingency planning which will
address possible adverse scenarios and the potential financial impact to the
Company's results of operations, liquidity or financial position.
The Corporation believes that the first step of this plan, assessment, is
complete, and is currently in the remediation phase for all systems and
equipment. The Corporation is relying on other remediation techniques for its
midrange and personal computer environments, and certain mainframe applications.
Management believes the majority of the Corporation's computer systems and
equipment will be remediated by the end of 1998, with the investment processing
systems and certain midrange computers to be remediated by the middle of 1999.
The third phase of the plan which includes clock-forward testing of the
Corporation's systems and non-IT, is scheduled to be largely complete by the end
of 1998. The Corporation is currently in the process of identifying key
processes and developing contingency plans in the event that the systems and
equipment supporting these processes are not Year 2000 compliant at the end of
1999. Management believes these contingency plans should be completed by
mid-1999. Until these plans are complete, management is unable to determine an
estimate of the most reasonably possible worst case scenario due to issues
relating to the Year 2000.
-12-
<PAGE>
Northbrook Life Insurance Company
Management's Discussion and Analysis
of Financial Condition and Results of Operations
(Continued)
In addition, the Company is actively working with its major external
counterparties and suppliers to assess their compliance efforts and the
Company's exposure to both their Year 2000 issues and non-IT issues. The Company
is currently soliciting its key external counterparties and suppliers to certify
that they are compliant with the Year 2000 issues or are taking actions they
believe will adequately prepare them for the Year 2000. The Company will
continue its efforts to receive responses on Year 2000 compliance from these
parties. If key vendors are unable to meet the Year 2000 requirement, the
Company intends to prepare contingency plans that will allow the Company to
continue to sell to and service its customers. Management believes these
contingency plans should be completed by mid-1999. The Company may also be
exposed to the risk that the issuers of investments will be adversely impacted
by Year 2000 issues.
The Company presently believes that it will resolve the Year 2000 issue in
a timely manner, and the costs incurred to achieve Year 2000 compliance of
Company systems are not expected to be material to the Company's results of
operations, liquidity or financial position. Year 2000 costs are expensed as
incurred.
Pending Accounting Standards
In December 1997, the Accounting Standards Executive Committee of the
American Institute of Certified Public Accountants issued Statement of Position
("SOP") 97-3, "Accounting by Insurance and Other Enterprises for
Insurance-Related Assessments." The SOP is required to be adopted in 1999. The
SOP provides guidance concerning when to recognize a liability for
insurance-related assessments and how those liabilities should be measured.
Specifically, insurance-related assessments should be recognized as liabilities
when all of the following criteria have been met: 1) an assessment has been
imposed or it is probable that an assessment will be imposed, 2) the event
obligating an entity to pay an assessment has occurred and 3) the amount of the
assessment can be reasonably estimated. The requirements of this SOP are not
expected to have a material impact on the results of operations, liquidity or
financial position of the Company. The Company expects to adopt the SOP as of
January 1, 1999.
Forward-Looking Statements
The statements contained in this Management's Discussion and Analysis that
are not historical information are forward-looking statements that are based on
management's estimates, assumptions and projections. The Private Securities
Litigation Reform Act of 1995 provides a safe harbor under The Securities Act of
1933 and The Securities Exchange Act of 1934 for forward-looking statements.
-13-
<PAGE>
PART II - Other Information
Item 1. Legal Proceedings
The Company and its Board of Directors know of no material legal proceedings
pending to which the Company is a party or which would materially affect the
Company. The Company is involved in pending and threatened litigation in the
normal course of its business in which claims for monetary damages are asserted.
Management, after consultation with legal counsel, does not anticipate the
ultimate liability arising from such pending or threatened litigation to have a
material effect on the financial condition of the Company.
Item 5. Other Information
Not applicable.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits required by Item 601 of Regulation S-K
(2) None
(3) (i) Articles of Incorporation*
(ii) By-laws*
(4) Form of Northbrook Life Insurance Company
Flexible Premium Deferred Annuity Contract
and Application**
(10) (i) Reinsurance Agreement between Northbrook
Life Insurance Company and Allstate Life
Insurance Company***
(ii) Modified Coinsurance Agreement between
Northbrook Life Insurance Company and Allstate
Life Insurance Company****
(11) None
(15) None
(18) None
(19) None
(22) None
(23) (a) Consent of Independent Public Accountants*****
(b) Consent of Attorneys******
(24) None
(27) Financial Data Schedule
(99) None
(b) Reports on 8-K
No reports on Form 8-K were filed during the third quarter of 1998.
* Previously filed in Form N-4 Registration Statement No. 33-35412
dated June 14, 1990 and incorporated by reference.
** Previously filed in Form S-1 Registration Statement No. 33-90272
dated March 13, 1995 and incorporated by reference. Previously filed in Form
S-1 Registration Statement No. 33-67352 dated August 12, 1993 and incorporated
by reference. Previously filed in Form S-1 Registration Statement No. 33-
50884 dated August 14, 1992 and incorporated by reference.
*** Previously filed in Form S-1 Registration Statement No. 33-39268
dated March 6, 1991 and incorporated by reference.
**** Previously filed in Form S-1 Registration Statement No. 33-84480
dated March 8, 1995 and incorporated by reference.
***** Previously filed and incorporated by reference in the following Form S-1
registration statements: 33-90272 filed April 1, 1998; 33-84480 filed April 1,
1998; and 33-50884 filed April 1, 1998.
****** Previously filed and incorporated by reference in the following Form S-1
registration statements: 33-90272 filed April 1, 1998; 33-84480 filed April 1,
1998; and 33-50884 filed April 1, 1998.
-14-
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Northbrook Life Insurance Company
(Registrant)
DATE November 13, 1998 /s/ LOUIS G. LOWER, II
------------------------ ----------------------
LOUIS G. LOWER, II
CHAIRMAN OF THE BOARD OF DIRECTORS
and CHIEF EXECUTIVE OFFICER
(Principal Executive Officer)
DATE November 13, 1998 /s/ KEITH A. HAUSCHILDT
----------------------- -----------------------
KEITH A. HAUSCHILDT
ASSISTANT VICE PRESIDENT AND CONTROLLER
(Chief Accounting Officer)
<TABLE> <S> <C>
<ARTICLE> 7
<LEGEND> THIS SCHEUDLE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
STATEMENTS OF FINANCIAL POSITION AT SEPTEMBER 30, 1998; STATEMENTS OF
OPERATIONS THREE MONTHS ENDED SEPTEMBER 30, 1998 AND SEPTEMBER 30, 1997 AND
NINE MONTHS ENDED SEPTEMBER 30, 1998 AND SEPTEMBER 30, 1997; AND STATEMENTS
OF CASH FLOWS NINE MONTHS ENDED SEPTEMBER 30, 1998.
</LEGEND>
<CIK> 0000716791
<NAME> NORTHBROOK LIFE INSURANCE COMPANY
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> SEP-30-1998
<EXCHANGE-RATE> 1
<DEBT-HELD-FOR-SALE> 87,259
<DEBT-CARRYING-VALUE> 0
<DEBT-MARKET-VALUE> 0
<EQUITIES> 0
<MORTGAGE> 0
<REAL-ESTATE> 0
<TOTAL-INVEST> 90,392
<CASH> 24
<RECOVER-REINSURE> 2,169,481
<DEFERRED-ACQUISITION> 0
<TOTAL-ASSETS> 8,473,481
<POLICY-LOSSES> 0
<UNEARNED-PREMIUMS> 0
<POLICY-OTHER> 144,680
<POLICY-HOLDER-FUNDS> 2,024,885
<NOTES-PAYABLE> 0
0
0
<COMMON> 2,500
<OTHER-SE> 85,279
<TOTAL-LIABILITY-AND-EQUITY> 8,473,481
0
<INVESTMENT-INCOME> 4,267
<INVESTMENT-GAINS> 12
<OTHER-INCOME> 0
<BENEFITS> 0
<UNDERWRITING-AMORTIZATION> 0
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</TABLE>
