FORM 10-Q
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
The registrant meets the conditions set forth in General Instruction H(1)(a) and
(b) of Form 10-Q and is therefore filing this Form with the reduced disclosure
format.
[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended: June 30, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission file number: 33-50884
33-84480
33-90272
NORTHBROOK LIFE INSURANCE COMPANY
(Exact name of registrant as specified in its charter)
ILLINOIS 35-300152
(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)
847/402-2400
(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 June 30, 1998; there were 25,000 shares of common capital stock
outstanding, par value $100 per share all of which shares are held by Allstate
Life Insurance Company.
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
Statements of Financial Position
June 30, 1998(Unaudited) and December 31, 1997.................. 3
Statements of Operations
Three Months Ended June 30, 1998 and June 30, 1997 and Six Months
Ended June 30, 1998 and June 30, 1997 (Unaudited)............... 4
Statements of Cash Flows
Six Months Ended June 30, 1998 and
June 30, 1997 (Unaudited)................................. 5
Notes to Financial Statements (Unaudited)....................... 6
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS.................... 9
Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT
MARKET RISK*..................................................N/A
PART II - OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS..................................................12
Item 2. CHANGES IN SECURITIES*............................................N/A
Item 3. DEFAULTS UPON SENIOR SECURITIES*..................................N/A
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS*..............N/A
Item 5. OTHER INFORMATION..................................................12
Item 6. EXHIBITS AND REPORTS ON FORM 8-K...................................12
SIGNATURE PAGE...............................................................13
*Omitted pursuant to General Instruction H(2) of Form 10-Q.
-2-
<PAGE>
NORTHBROOK LIFE INSURANCE COMPANY
STATEMENTS OF FINANCIAL POSITION
<TABLE>
<CAPTION>
June 30, December 31,
1998 1997
--------------------------------------------
($ in thousands) (Unaudited)
<S> <C> <C>
ASSETS
Investments
Fixed income securities at fair value (amortized
cost $74,837 and $72,491) $ 79,168 $ 76,402
Short-term 7,567 3,031
------------ ------------
Total investments 86,735 79,433
Reinsurance recoverable from Allstate Life
Insurance Company 2,200,416 2,293,094
Net receivable from Allstate Life Insurance Company - 1,467
Cash 15 -
Other assets 7,638 5,033
Separate Accounts 6,601,037 5,719,203
------------ ------------
Total assets $ 8,895,841 $ 8,098,230
============ ============
LIABILITIES
Reserve for life-contingent contract benefits $ 143,822 $ 144,352
Contractholder funds 2,056,679 2,148,555
Income taxes payable 467 162
Deferred income taxes 2,914 2,674
Net payable to Allstate Life Insurance Company 5,532 -
Separate Accounts 6,601,037 5,719,203
------------ ------------
Total liabilities 8,810,451 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 23,476 21,642
Accumulated other comprehensive income:
Unrealized net capital gains 2,814 2,542
------------ ------------
Total accumulated other comprehensive income 2,814 2,542
------------ ------------
Total shareholder's equity 85,390 83,284
------------ ------------
Total liabilities and shareholder's equity $ 8,895,841 $ 8,098,230
============ ============
</TABLE>
See notes to financial statements.
-3-
<PAGE>
NORTHBROOK LIFE INSURANCE COMPANY
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Three months ended Six months ended
June 30, June 30,
----------------------------------- -----------------------------------
($ in thousands) 1998 1997 1998 1997
----------------- ---------------- ---------------- -----------------
(Unaudited)
<S> <C> <C> <C> <C>
REVENUES
Net investment income $ 1,385 $ 1,256 $ 2,810 $ 2,528
Realized capital gains and losses - (70) - (69)
-------- -------- -------- --------
INCOME BEFORE INCOME
TAX EXPENSE 1,385 1,186 2,810 2,459
INCOME TAX EXPENSE 480 410 976 850
-------- -------- -------- --------
NET INCOME $ 905 $ 776 $ 1,834 $ 1,609
======== ======== ======== ========
</TABLE>
See notes to financial statements.
-4-
<PAGE>
NORTHBROOK LIFE INSURANCE COMPANY
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Six months ended
June 30,
---------------------------------------------
($ in thousands) 1998 1997
-------------------- --------------------
(Unaudited)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 1,834 $ 1,609
Adjustments to reconcile net income to net cash
provided by operating activities
Amortization and other non-cash items 305 179
Realized capital gains and losses - 69
Change in life-contingent contract benefits and
contractholder funds 272 (10)
Change in deferred income taxes 240 16
Change in other operating assets and liabilities 4,173 5
---------- ----------
Net cash provided by operating activities 6,824 1,868
---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES
Fixed income securities
Proceeds from sales - 1,606
Investment collections 5,280 2,205
Investment purchases (7,553) (10,170)
Change in short-term investments, net (4,536) 4,551
---------- ----------
Net cash used in investing activities (6,809) (1,808)
---------- ----------
NET INCREASE IN CASH 15 60
CASH AT BEGINNING OF PERIOD - -
---------- ----------
CASH AT END OF PERIOD $ 15 $ 60
========== ==========
</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 financial statements and notes as of June 30, 1998 and for the
three-month and six-month periods ended June 30, 1998 and 1997 are
unaudited. The interim 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.
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.
-6-
<PAGE>
NORTHBROOK LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
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 Six months ended
June 30, June 30,
------------------------------- -------------------------------
($ in thousands) 1998 1997 1998 1997
-------------- ------------- -------------- -------------
<S> <C> <C> <C> <C>
Premiums $ 644 $ 258 $ 1,010 $ 820
Contract charges 26,925 19,105 50,633 36,581
Credited interest, policy
benefits, and expenses 53,067 49,018 105,730 101,745
</TABLE>
3. Comprehensive Income
The components of other comprehensive income on a pretax and after-tax
basis are as follows:
<TABLE>
<CAPTION>
Three months ended June 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
(losses) arising during
the period $ 524 $ (183) $ 341 $ 1,532 $ (537) $ 995
Less: reclassification adjust-
ment for realized net
capital gains included in
net income - - - (70) 24 (46)
------ -------- -------- --------- -------- --------
Other comprehensive income $ 524 $ (183) $ 341 $ 1,602 $ (561) $ 1,041
====== ======== -------- ========= ======== --------
Net income 905 776
-------- --------
Comprehensive income $ 1,246 $ 1,817
======== ========
</TABLE>
-7-
<PAGE>
NORTHBROOK LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
<TABLE>
<CAPTION>
Six months ended June 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
(losses) arising during
the period $ 418 $ (146) $ 272 $ (296) $ 104 $ (192)
Less: reclassification adjust-
ment for realized net
capital gains included in
net income - - - (69) 24 (45)
-------- -------- -------- ---------- ---------- ----------
Other comprehensive income $ 418 $ (146) $ 272 $ (227) $ 80 $ (147)
======== ======== -------- ========== ========== ----------
Net income 1,834 1,609
-------- ----------
Comprehensive income $ 2,106 $ 1,462
======== ==========
</TABLE>
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.
-8-
<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 financial statements and notes thereto found under Part II. Item
8, with the discussion and analysis found under Part II. Item 7 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.
The Company issues flexible premium deferred variable annuity contracts
and variable life policies, the assets and liabilities of which are legally
segregated and reflected as Separate Account assets and liabilities. Separate
Account assets and liabilities 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.
Results of Operations
- ---------------------
($ in thousands)
<TABLE>
<CAPTION>
Three months ended Six months ended
June 30, June 30,
--------------------------------- ---------------------------------
1998 1997 1998 1997
--------------- -------------- ---------------- -------------
<S> <C> <C> <C> <C>
Net investment income $ 1,385 $ 1,256 $ 2,810 $ 2,528
======== ======== ======== ========
Realized capital gains and
losses, after-tax $ - $ (45) $ - $ (44)
======== ======== ======== ========
Net income $ 905 $ 776 $ 1,834 $ 1,609
======== ======== ======== ========
Investments $ 86,735 $ 75,648 $ 86,735 $ 75,648
======== ======== ======== ========
</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 six-month periods ended June 30, 1998
increased $129 thousand and $225 thousand, respectively, compared with the same
periods in 1997. The increase in net income was primarily due to increased
investment income partially offset by increased federal income taxes.
Pretax net investment income increased 10.3% and 11.2% in the second
quarter and the first six months of 1998, respectively, from the comparable 1997
periods. Additional investment income was earned on higher investment balances
arising primarily from positive cash flows from operating activities.
-9-
<PAGE>
Northbrook Life Insurance Company
Management's Discussion and Analysis
of Financial Condition and Results of Operations
Financial Position
- ------------------
<TABLE>
<CAPTION>
($ in thousands)
June 30, December 31,
1998 1997
-------------- ----------------
<S> <C> <C>
Fixed income securities (1) $ 79,168 $ 76,402
Short-term investments 7,567 3,031
-------------- ----------------
Total investments $ 86,735 $ 79,433
============== ================
Reinsurance recoverable from ALIC $ 2,200,416 $ 2,293,094
============== ================
Separate Account assets and liabilities $ 6,601,037 $ 5,719,203
============== ================
Contractholder funds $ 2,056,679 $ 2,148,555
============== ================
</TABLE>
(1) Fixed income securities are carried at fair value. Amortized cost for these
securities was $74,837 and $72,491 at June 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
tax-exempt 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 $86.7 million at June 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 June 30,
1998, unrealized net capital gains on fixed income securities were $4.3 million
compared to $3.9 million at December 31, 1997.
At June 30, 1998, all of 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 Company's short-term investment portfolio was $7.6 million and $3.0
million at June 30, 1998 and December 31, 1997, respectively. The Company
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 six months ended June 30, 1998, contractholder funds decreased
by $91.9 million and reinsurance recoverable from ALIC under reinsurance
agreements decreased by $92.7 million. Interest credited to contractholders and
sales of fixed annuity contracts were more than offset by fixed annuity
surrenders, withdrawals, policyholder transfers from fixed annuity contracts to
flexible premium deferred 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 $881.8 million,
primarily attributable to sales of flexible premium deferred 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 and withdrawals.
-10-
<PAGE>
Northbrook Life Insurance Company
Management's Discussion and Analysis
of Financial Condition and Results of Operations
Liquidity and Capital Resources
Under the terms of reinsurance agreements, premiums and deposits on
universal life 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 a 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 and investment processing. 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 Issue").
The Company believes that many of its counterparties and suppliers also have
Year 2000 Issues which could affect the Company. In 1995, the Corporation
commenced a plan intended to mitigate and/or prevent the adverse effects of Year
2000 Issues. These strategies include normal development and enhancement of new
and existing systems, upgrades to operating systems already covered by
maintenance agreements and modifications to existing systems to make them Year
2000 compliant. The plan also includes the Company actively working with its
major external counterparties and suppliers to assess their compliance efforts
and the Company's exposure to them. The Company is in the process of developing
a contingency plan that will address possibly adverse scenarios. The Company
presently believes that it will resolve the Year 2000 Issue in a timely manner,
and the financial impact will not materially affect its results of operations,
liquidity or financial position. The Company is working closely with its
business partners, counterparties and suppliers in an effort to bring all
communications, facilities, software and systems into Year 2000 compliance. Year
2000 costs are expensed as incurred.
Pending Accounting Standards
In June 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards ("SFAS") No. 131, "Disclosures about Segments of
an Enterprise and Related Information." SFAS No. 131 redefines how segments are
determined and requires additional segment disclosures for both annual and
quarterly reporting. Under this Statement, segments are determined using the
"management approach" for financial statement reporting. The management approach
is based on the way an enterprise makes operating decisions and assesses
performance of its businesses. The Company is currently reviewing the
requirements of this Statement and has not determined the impact on its current
reporting. The requirements of this statement will be adopted effective December
31, 1998.
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 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 standard are expected to be adopted in 1999 and are not
expected to have a material impact on the results of operations, cash flows or
financial position of the Company.
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.
-11-
<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 second 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 in Form S-1 Registration Statement No. 33-90272 dated
April 1, 1997 and incorporated by reference. Previously filed in Form S-1
Registration Statement No. 33-84480 dated April 1, 1997 and incorporated by
reference. Previously filed in Form S-1 Registration Statement No. 33-50884
dated April 1, 1997 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. 33-50884 dated August 14, 1992 and incorporated by
reference. Previously filed in Form S-1 Registration Statement No. 33-84480
dated September 28, 1994 and incorporated by reference.
-12-
<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, on the 14th day of August 1998.
NORTHBROOK LIFE INSURANCE COMPANY
---------------------------------
(Registrant)
/s/ LOUIS G. LOWER, II CHAIRMAN OF THE BOARD OF DIRECTORS
- ------------------------ AND CHIEF EXECUTIVE OFFICER
LOUIS G. LOWER, II (Principal Executive Officer)
/s/ KEITH A. HAUSCHILDT ASSISTANT VICE PRESIDENT AND CONTROLLER
- ------------------------ (Chief Accounting Officer)
KEITH A. HAUSCHILDT
<TABLE> <S> <C>
<ARTICLE> 7
<LEGEND> THIS SCHEUDLE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
STATEMENTS OF FINANCIAL POSITION AT JUNE 30, 1998; STATEMENTS OF OPERATIONS
THREE MONTHS ENDED JUNE 30, 1998 AND JUNE 30, 1997 AND SIX MONTHS ENDED
JUNE 30, 1998 AND JUNE 30, 1997; AND STATEMENTS OF CASH FLOWS SIX MONTHS
ENDED JUNE 30, 1998.
</LEGEND>
<CIK> 0000716791
<NAME> NORTHBROOK LIFE INSURANCE COMPANY
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> JUN-30-1998
<EXCHANGE-RATE> 1
<DEBT-HELD-FOR-SALE> 79,168
<DEBT-CARRYING-VALUE> 0
<DEBT-MARKET-VALUE> 0
<EQUITIES> 0
<MORTGAGE> 0
<REAL-ESTATE> 0
<TOTAL-INVEST> 86,735
<CASH> 15
<RECOVER-REINSURE> 2,200,416
<DEFERRED-ACQUISITION> 0
<TOTAL-ASSETS> 8,895,841
<POLICY-LOSSES> 0
<UNEARNED-PREMIUMS> 0
<POLICY-OTHER> 143,822
<POLICY-HOLDER-FUNDS> 2,056,679
<NOTES-PAYABLE> 0
0
0
<COMMON> 2,500
<OTHER-SE> 82,890
<TOTAL-LIABILITY-AND-EQUITY> 8,895,841
0
<INVESTMENT-INCOME> 2,810
<INVESTMENT-GAINS> 0
<OTHER-INCOME> 0
<BENEFITS> 0
<UNDERWRITING-AMORTIZATION> 0
<UNDERWRITING-OTHER> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 976
<INCOME-CONTINUING> 1,834
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,834
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
<RESERVE-OPEN> 0
<PROVISION-CURRENT> 0
<PROVISION-PRIOR> 0
<PAYMENTS-CURRENT> 0
<PAYMENTS-PRIOR> 0
<RESERVE-CLOSE> 0
<CUMULATIVE-DEFICIENCY> 0
</TABLE>
