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Previous: TRIMBLE NAVIGATION LTD /CA/, 10-Q, 1999-11-12 |
Next: HALLWOOD REALTY PARTNERS L P, 10-Q, 1999-11-12 |
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON NOVEMBER 12, 1999
- ------------------------------------------------------------------------------
FILE NOS. 033-35412
811-6116
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-4
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
POST-EFFECTIVE AMENDMENT NO. 22 /X/
AND/OR
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY
ACT OF 1940
AMENDMENT NO. 23/X/
NORTHBROOK VARIABLE ANNUITY ACCOUNT II
(Exact Name of Registrant)
NORTHBROOK LIFE INSURANCE COMPANY
(Name of Depositor)
NORTHBROOK LIFE INSURANCE COMPANY
3100 SANDERS ROAD
NORTHBROOK, ILLINOIS 60062
847/402-2400
(Address and Telephone Number of Depositor's Principal Offices)
MICHAEL J. VELOTTA
VICE PRESIDENT, SECRETARY AND GENERAL COUNSEL
NORTHBROOK LIFE INSURANCE COMPANY
3100 SANDERS ROAD
NORTHBROOK, ILLINOIS 60062
847/402-2400
(Name, Complete Address and Telephone Number of Agent for Service)
COPIES TO:
RICHARD T. CHOI, ESQUIRE DANIEL J. FITZPATRICK, ESQUIRE
FREEDMAN, LEVY, KROLL & SIMONDS DEAN WITTER REYNOLDS INC.
1050 CONNECTICUT AVENUE, N.W. TWO WORLD TRADE CENTER
SUITE 825 NEW YORK, NEW YORK 10048
WASHINGTON, D.C. 20036-5366
<PAGE>
Approximate date of proposed public offering: Continuous
IT IS PROPOSED THAT THIS FILING WILL BECOME EFFECTIVE
(CHECK APPROPRIATE BOX)
/ / immediately upon filing pursuant to paragraph (b) of Rule 485
/ / on (date) pursuant to paragraph (b) of Rule 485
/X/ 60 days after filing pursuant to paragraph (a)(1) of Rule 485
/ / on (date) pursuant to paragraph (a)(i) 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.
Title of Securities Being Registered: Units of Interest in the Northbrook
Variable Annuity Account II under deferred variable annuity contracts.
<PAGE>
Explanatory Note
Registrant is filing this post-effective amendment ("Amendment") for the purpose
of adding a new prospectus, a new statement of additional information ("SAI"),
and additional exhibits related to a new form of contract ("new Contract") that
Registrant intends to offer. The new Contract is essentially identical to the
Morgan Stanley Dean Witter Variable Annuity II AssetManager contract described
in the currently effective prospectus and SAI for that contract, each dated May
2, 1999, included in the Registration Statement, except that it has a lower
overall charge structure and fewer fixed account and death benefit options,
consistent with the manner in which the new Contract will be distributed. The
Amendment is not intended to amend or delete any part of the Registration
Statement, except as specifically noted herein.
<PAGE>
PREFERRED CLIENT VARIABLE ANNUITY
Northbrook Life Insurance Company Prospectus dated ________, 1999
P.O. Box 94040
Palatine, IL 60094
Telephone Number: 1-800-654-2397
Northbrook Life Insurance Company ("Northbrook") is offering the Preferred
Client Variable Annuity, an individual and group flexible premium deferred
variable annuity contract ("Contract"). This prospectus contains information
about the Contract that you should know before investing. Please keep it for
future reference.
The Contract offers 22 investment alternatives ("investment alternatives"). The
investment alternatives include a fixed account option ("Fixed Account Option")
and 21 variable sub-accounts ("Variable Sub-Accounts") of the Northbrook
Variable Annuity Account II ("Variable Account"). Each Variable Sub-Account
invests exclusively in shares of portfolios ("Portfolios") of the following
mutual funds ("Funds"):
o Morgan Stanley Dean Witter Variable Investment Series
o Morgan Stanley Dean Witter Universal Funds, Inc.
o Van Kampen Life Investment Trust
We (Northbrook) have filed a Statement of Additional Information, dated ______,
1999, with the Securities and Exchange Commission ("SEC"). It contains more
information about the Contract and is incorporated herein by reference, which
means that it is legally a part of this prospectus. Its table of contents
appears on page __ of this prospectus. For a free copy, please write or call us
at the address or telephone number above, or go to the SEC's Web site
(http://www.sec.gov). You can find other information and documents about us,
including documents that are legally a part of this prospectus, at the SEC's Web
site.
The Securities and Exchange Commission has not
approved or disapproved the securities described
in this prospectus, nor has it passed on the
accuracy or the adequacy of this prospectus. Any
one who tells you otherwise is committing
IMPORTANT a federal crime.
NOTICES
Investment in the Contracts involves investment
risks, including possible loss of principal.
<PAGE>
TABLE OF CONTENTS
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Page
<S> <C> <C>
Important Terms..................................................
The Contract At A Glance.........................................
Overview How the Contract Works...........................................
Expense Table....................................................
Financial Information............................................
The Contract.....................................................
Purchase of Contracts............................................
Contract Contract Value...................................................
Features Investment Alternatives..........................................
The Variable Sub-Accounts.....................................
The Fixed Account Option......................................
Transfers.....................................................
Expenses.........................................................
Access to Your Money.............................................
Income Payments..................................................
Death Benefits...................................................
More Information:
Northbrook..............................................
The Variable Account....................................
Other The Portfolios..........................................
Information The Contract............................................
Qualified Plans.........................................
Legal Matters...........................................
Year 2000...............................................
Taxes............................................................
Performance Information..........................................
Statement of Additional Information Table of Contents............
</TABLE>
<PAGE>
IMPORTANT TERMS
- ------------------------------------------------------------------------------
This prospectus uses a number of important terms that you may not be familiar
with. The index below identifies the page that describes each term. The first
use of each term in this prospectus appears in highlights.
Page
Accumulation Phase.............................................
Accumulation Unit..............................................
Accumulation Unit Value........................................
Annuitant......................................................
Automatic Additions Program....................................
Automatic Portfolio Rebalancing Program........................
Beneficiary....................................................
Cancellation Period............................................
*Contract.......................................................
Contract Anniversary...........................................
Contract Owner ("You").........................................
Contract Value.................................................
Contract Year..................................................
Death Benefit Anniversary......................................
Death Benefit Combination Option...............................
Dollar Cost Averaging Option...................................
Dollar Cost Averaging Program..................................
Due Proof of Death.............................................
Enhanced Death Benefit.........................................
Fixed Account Option...........................................
Funds..........................................................
Income Plan....................................................
Investment Alternatives........................................
Issue Date.....................................................
Northbrook ("We")..............................................
Payout Phase...................................................
Payout Start Date..............................................
Performance Benefit Combination Option.........................
Performance Death Benefit Option...............................
Performance Income Benefit Option..............................
Portfolios.....................................................
Qualified Contracts............................................
Right to Cancel................................................
SEC............................................................
Settlement Value...............................................
Systematic Withdrawal Program..................................
Valuation Date.................................................
Variable Account...............................................
Variable Sub-Account...........................................
* If you purchase a group Contract, we will issue you a certificate
that represents your ownership and that summarizes the provisions of
the group Contract. References to "Contract" in this prospectus include
certificates, unless the context requires otherwise. In certain states
the Contract is available only as a group Contract.
<PAGE>
THE CONTRACT AT A GLANCE
- ------------------------------------------------------------------------------
The following is a snapshot of the Contract. Please read the remainder of this
prospectus for more information.
----------------------------------- -------------------------------------
Flexible Payments
You can purchase a Contract with an
initial purchase payment of $1,000 or
more. You can add to your Contract as
often and as much as you like, but each
payment must be at least $100. You must
maintain a minimum account size of
$1,000.
----------------------------------- -------------------------------------
Right to Cancel
You may cancel your Contract within 20
days of receipt or any longer period as
your state may require ("Cancellation
Period"). Upon cancellation, we will
return your purchase payments adjusted,
to the extent state and federal law
permit, to reflect the investment
experience of any amounts allocated
to the Variable Account.
----------------------------------- -------------------------------------
Expenses
You will bear the following expenses:
o Total Variable Account annual
fees equal to 0.70% of average
daily net assets (0.83% if you
select the Performance Death
Benefit Option, or the
Performance Income Benefit
Option, and 0.94% if you select
the Performance Benefit
Combination Option or the Death
Benefit Combination Option)
o Transfer fee of $25 after 12th
transfer in any Contract Year (fee
currently waived)
o State premium tax (if your state
imposes one)
In addition, each Portfolio pays
expenses that you will bear indirectly
if you invest in a Variable
Sub-Account.
----------------------------------- -------------------------------------
Investment
Alternatives The Contract offers 22 investment
alternatives including:
o a Fixed Account Option (which
credits interest at rates we
guarantee)
o 21 Variable Sub-Accounts investing
in Portfolios offering professional
money management by these
investment advisers:
o Morgan Stanley Dean Witter
Advisors, Inc.
o Morgan Stanley Dean Witter
Investment Management, Inc.
o Van Kampen Asset Management Inc.
To find out current rates being paid on
the Fixed Account Option, or to find
out how the Variable Sub-Accounts have
performed, call us at 1-800-654-2397.
----------------------------------- -------------------------------------
<PAGE>
----------------------------------- -------------------------------------
Special Services
For your convenience, we offer these
special services:
o Automatic Additions Program
o Automatic Portfolio Rebalancing
Program
o Dollar Cost Averaging Program
o Systematic Withdrawal Program
----------------------------------- -------------------------------------
Income Payments
You can choose fixed income payments,
variable income payments, or a
combination of the two. You can receive
your income payments in one of the
following ways:
o life income with guaranteed
payments
o joint and survivor life income
o guaranteed payments for a
specified period
----------------------------------- -------------------------------------
Death Benefits
If you or the Annuitant dies before the
Payout Start Date, we will pay the
death benefit described in the
Contract. We also offer death benefit
options.
----------------------------------- -------------------------------------
Transfers
Before the Payout Start Date, you may
transfer your Contract value
("Contract Value") among the investment
alternatives, with certain
restrictions. Transfers must be at
least $100 or the total amount in the
investment alternative, whichever is
less.
We do not currently impose a fee upon
transfers. However, we reserve the
right to charge $25 per transfer after
the 12th transfer in each "Contract
Year," which we measure from the date
we issue your contract or a Contract
anniversary ("Contract Anniversary").
----------------------------------- -------------------------------------
Withdrawals You may withdraw some or all of your
Contract Value at anytime during the
Accumulation Phase. In general, you
must withdraw at least $500 at a time
or the total amount in the investment
alternative, if less. A 10% federal tax
penalty may apply if you withdraw
before you are 59 1/2 years old.
----------------------------------- -------------------------------------
The Preferred Client Variable Annuity is currently available only to
participants in the Morgan Stanley Dean Witter Choice Account Program ("Choice
Account Program"). The fees and expenses associated with the Choice Account
Program are separate from and in addition to the fees and expenses associated
with the Preferred Client Variable Annuity. These fees are fully described in
your Choice Account agreement. You should consult your Morgan Stanley Dean
Witter Financial Advisor for details.
<PAGE>
HOW THE CONTRACT WORKS
- ------------------------------------------------------------------------------
The Contract basically works in two ways.
First, the Contract can help you (we assume you are the "Contract owner")
save for retirement because you can invest in up to 22 investment alternatives
and pay no federal income taxes on any earnings until you withdraw them. You do
this during what we call the "Accumulation Phase" of the Contract. The
Accumulation Phase begins on the date we issue your Contract (we call that date
the "Issue Date") and continues until the Payout Start Date, which is the date
we apply your money to provide income payments. During the Accumulation Phase,
you may allocate your purchase payments to any combination of the Variable
Sub-Accounts and/or the Fixed Account Option. If you invest in the Fixed Account
Option, you will earn a fixed rate of interest that we declare periodically. If
you invest in any of the Variable Sub-Accounts, your investment return will vary
up or down depending on the performance of the corresponding Portfolios.
Second, the Contract can help you plan for retirement because you can use
it to receive retirement income for life and/or for a pre-set number of years,
by selecting one of the income payment options (we call these "Income Plans")
described on page __. You receive income payments during what we call the
"Payout Phase" of the Contract, which begins on the Payout Start Date and
continues until we make the last payment required by the Income Plan you select.
During the Payout Phase, if you select a fixed income payment option, we
guarantee the amount of your payments, which will remain fixed. If you select a
variable income payment option, based on one or more of the Variable
Sub-Accounts, the amount of your payments will vary up or down depending on the
performance of the corresponding Portfolios. The amount of money you accumulate
under your Contract during the Accumulation Phase and apply to an Income Plan
will determine the amount of your income payments during the Payout Phase.
The timeline below illustrates how you might use your Contract.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
Issue Payout Start
Date Accumulation Phase Date Payout Phase
- ------------------------------------------------------------------------------------------------------------------------------->
You save for retirement
| | |
You buy You elect to receive You can receive Or you can receive
a Contract Income payments or income payments income payments
Receive a lump sum for a set period for life
Payment
</TABLE>
As the Contract owner, you exercise all of the rights and privileges
provided by the Contract. If you die, any surviving Contract owner or, if there
is none, the Beneficiary will exercise the rights and privileges provided by the
Contract. See "The Contract." In addition, if you die before the Payout Start
Date, we will pay a death benefit to any surviving Contract owner, or if there
is none, to your Beneficiary. See "Death Benefits."
Please call us at 1-800-654-2397 if you have any question about how the
Contract works.
<PAGE>
EXPENSE TABLE
- ------------------------------------------------------------------------------
The table below lists the expenses that you will bear directly or indirectly
when you buy a Contract. The table and the examples that follow do not reflect
premium taxes that may be imposed by the state where you reside. For more
information about Variable Account expenses, see "Expenses," below. For more
information about Portfolio expenses, please refer to the accompanying
prospectuses for the Funds. The table and expenses also do not reflect the
expenses associated with the Choice Account Program. Please see your Morgan
Stanley Dean Witter Financial Advisor for details.
--------------------------------------------------------------------
CONTRACT OWNER TRANSACTION EXPENSES
Withdrawal Charge........................................... None
Annual Contract Maintenance Charge.......................... None
Transfer Fee................................................ None*
VARIABLE ACCOUNT ANNUAL EXPENSES
(as a percentage of average daily net asset value deducted from each
Variable Sub-Account)
Mortality and Expense Risk Charge.............................0.60%**
Administrative Expense Charge.................................0.10%
Total Variable Account Annual Expenses..........0.70%
----------
*Applies solely to the thirteenth and subsequent transfers within a
Contract Year excluding transfers due to dollar cost averaging and
automatic portfolio rebalancing. We are currently waiving the transfer
fee.
** If you select the Performance Death Benefit Option or the
Performance Income Benefit Option, the mortality and expense risk
charge is 0.73%. If you select the Performance Benefit Combination
Option, or the Death Benefit Combination Option, the mortality and
expense risk charge is 0.84%.
<PAGE>
PORTFOLIO ANNUAL EXPENSES (After Voluntary Reductions and Reimbursements) (as a
percentage of Portfolio average daily net assets)
<TABLE>
<CAPTION>
Total
Portfolio
Management Other Annual
Portfolio Fees Expenses Expenses
Morgan Stanley Dean Witter Variable
Investment Series
<S> <C> <C> <C>
Money Market 0.50% 0.02% 0.52%
Quality Income Plus 0.50% 0.02% 0.52%
Short-Term Bond(1) 0.00% 0.00% 0.00%
High Yield 0.50% 0.03% 0.53%
Utilities 0.65% 0.02% 0.67%
Income Builder 0.75% 0.06% 0.81%
Dividend Growth 0.52% 0.01% 0.53%
Aggressive Equity(1) 0.00% 0.00% 0.00%
Capital Growth 0.65% 0.05% 0.70%
Global Dividend Growth 0.75% 0.09% 0.84%
European Growth 0.99% 0.12% 1.11%
Pacific Growth 0.99% 0.52% 1.51%
Equity 0.50% 0.02% 0.52%
S&P 500 Index(2) 0.00% 0.00% 0.00%
Competitive Edge "Best Ideas"(2) 0.00% 0.00% 0.00%
Strategist 0.50% 0.02% 0.52%
Morgan Stanley Dean Witter Universal
Funds, Inc.(3)
Equity Growth 0.09% 0.76% 0.85%
U.S. Real Estate 0.17% 0.93% 1.10%
International Magnum 0.15% 1.00% 1.15%
Emerging Markets Equity 0.00% 1.95% 1.95%
Van Kampen Life Investment Trust(4)
Emerging Growth 0.32% 0.53% 0.85%
(1) The contractual management fee rate for the Short-Term Bond Portfolio is
0.45% of average daily assets and for the Aggressive Equity Portfolio is
0.75% of average daily net assets. The Short-Term Bond and Aggressive
Equity Portfolios commenced operations on May 3, 1999. Morgan Stanley Dean
Witter Advisors Inc. had undertaken to assume all expenses of the
Short-Term Bond and Aggressive Equity Portfolios (except for brokerage
fees) and to waive the compensation provided for each of these Portfolios
in its management agreement with the Fund until such time as the pertinent
Portfolio had $50 million of net assets or until May 1, 2000, whichever
occurrs first. As of November 12, 1999, neither the Short-Term Bond
Portfolio nor the Aggressive Equity Portfolio had attained $50 million of
net assets.
(2) Morgan Stanley Dean Witter Advisors Inc. had undertaken to assume all
expenses of the S&P 500 Index and Competitive Edge "Best Ideas" Portfolios
(except for brokerage fees) and to waive the compensation provided for each
of these Portfolios in its management agreement with the Fund until such
time as the pertinent Portfolio had $50 million of net assets or until
April 30, 1999, whichever occurred first. The S&P 500 Index Portfolio
attained $50 million of net assets on January 5, 1999. The Competitive Edge
"Best Ideas" Portfolio had not attained $50 million of net assets on April
30, 1999. Morgan Stanley Dean Witter Advisors Inc. has permanently
undertaken to assume all expenses of the S&P 500 Index Portfolio (except
for brokerage fees) and to waive the compensation provided in its
management agreement with the Fund to the extent that such expenses and
compensation on an annualized basis exceed .50% of the daily net assets of
the S&P 500 Index Portfolio. Absent such reductions, the management fees,
other expenses, and total annual Portfolio expenses would have been as
follows:
S&P 500 Index 0.40% 0.19% 0.59%
Competitive Edge "Best Ideas" 0.65% 0.27% 0.92%
(3) Morgan Stanley Dean Witter Investment Management Inc. has voluntarily
agreed to a reduction in its management fees and to reimburse the
Portfolios for which it acts as investment adviser for certain expenses of
the Portfolios. Absent such reductions, the management fees, other
expenses, and total annual Portfolio expenses would have been as follows:
Equity Growth 0.55% 0.76% 1.31%
U.S. Real Estate 0.80% 0.93% 1.73%
International Magnum 0.80% 1.00% 1.80%
Emerging Markets Equity 1.25% 2.20% 3.45%
(4) Van Kampen Asset Management Inc. has voluntarily agreed to a reduction in
its management fees and to reimburse the Emerging Growth Portfolio for
which it acts as investment adviser if such fees would cause "Total
Portfolio Annual Expenses" to exceed the amount set forth in the table
above. Absent such reductions, the management fees, other expenses, and
total annual Portfolio expenses would have been 0.70%, 0.53, and 1.23%,
respectively.
</TABLE>
EXAMPLE
The example below shows the dollar amount of expenses that you would bear
directly or indirectly if you:
o invested $1,000 in a Variable Sub-Account,
o earned a 5% annual return on your investment, and
o elected the Performance Benefit Combination Option or the Death Benefit
Combination Option.
The example does not include any taxes or tax penalties you may be required to
pay if you surrender your Contract.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
SUB-ACCOUNT 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- ----------- ------ ------- -------- --------
Money Market Sub-Account............................
Quality Income Plus Sub-Account.....................
Short-Term Bond Sub-Account..........................
High Yield Sub-Account...............................
Utilities Sub-Account................................
Income Builder Sub-Account...........................
Dividend Growth Sub-Account..........................
Capital Growth Sub-Account...........................
Global Dividend Growth Sub-Account...................
European Growth Sub-Account..........................
Pacific Growth Sub-Account...........................
Equity Sub-Account...................................
S&P 500 Index Sub-Account............................
Competitive Edge "Best Ideas" Sub-Account............
Strategist Sub-Account...............................
Equity Growth Sub-Account............................
Aggressive Equity Sub-Account........................
U.S. Real Estate Sub-Account.........................
International Magnum Sub-Account.....................
Emerging Markets Equity Sub-Account..................
Emerging Growth Sub-Account..........................
</TABLE>
Please remember that you are looking at an example and not a representation of
past or future expenses. Your actual expenses may be lower or greater than those
shown above. Similarly, your rate of return may be lower or greater than 5%,
which is not guaranteed. The above examples assume the election of the
Performance Benefit Combination Option, or the Death Benefit Combination Option,
with a mortality and expense risk charge of 0.84%. If those options were not
elected, the expense figures shown above would be slightly lower.
<PAGE>
FINANCIAL INFORMATION
- ------------------------------------------------------------------------------
To measure the value of your investment in the Variable Sub-Accounts during the
Accumulation Phase, we use a unit of measure we call the "Accumulation Unit."
Each Variable Sub-Account has a separate value for its Accumulation Units we
call the "Accumulation Unit Value." Accumulation Unit Value is analogous to, but
not the same as, the share price of a mutual fund.
There are no Accumulation Unit Values to report because the Contracts were first
offered as of the date of this prospectus.
The financial statements of Northbrook and the financial statements of the
Variable Account appear in the Statement of Additional Information.
<PAGE>
THE CONTRACT
- ------------------------------------------------------------------------------
CONTRACT OWNER
The Preferred Client Variable Annuity is a contract between you, the Contract
owner, and Northbrook, a life insurance company. As the Contract owner, you may
exercise all of the rights and privileges provided to you by the Contract. That
means it is up to you to select or change (to the extent permitted):
o the investment alternatives during the Accumulation and Payout Phases,
o the amount and timing of your purchase payments and withdrawals,
o the programs you want to use to invest or withdraw money,
o the income payment plan you want to use to receive retirement income,
o the Annuitant (either yourself or someone else) on whose life the income
payments will be based,
o the Beneficiary or Beneficiaries who will receive the benefits that the
Contract provides when the last surviving Contract owner or Annuitant dies,
and
o any other rights that the Contract provides.
If you die, any surviving Contract owner, or, if none, the Beneficiary will
exercise the rights and privileges provided to them by the Contract. The
Contract cannot be jointly owned by both a non-natural person and a natural
person.
You can use the Contract with or without a qualified plan. A "qualified plan" is
a retirement savings plan, such as an IRA or tax-sheltered annuity, that meets
the requirements of the Internal Revenue Code. Qualified plans may limit or
modify your rights and privileges under the Contract. We use the term "Qualified
Contract" to refer to a Contract used with a qualified plan. See "Qualified
Plans" on page __.
ANNUITANT
The Annuitant is the individual whose life determines the amount and duration of
income payments (other than under Income Plans with guaranteed payments for a
specified period). The Annuitant must be a natural person.
You initially designate an Annuitant in your application. If the Contract owner
is a natural person, you may change the Annuitant at any time prior to the
Payout Start Date. Once we receive your change request, any change will be
effective at the time you sign the written notice. We are not liable for any
payment we make or other action we take before receiving any written request
from you. Before the Payout Start Date, you may designate a joint Annuitant, who
is a second person on whose life income payments depend. If the Annuitant dies
prior to the Payout Start Date, the new Annuitant will be the youngest Contract
owner, otherwise, the youngest Beneficiary, unless the Contract owner names a
different Annuitant.
BENEFICIARY
The Beneficiary is the person who may elect to receive the death benefit or
become the new Contract owner if the sole surviving Contract owner dies before
the Payout Start Date. If the sole surviving Contract owner dies after the
Payout Start Date, the Beneficiary will receive any guaranteed income payments
scheduled to continue.
You may name one or more Beneficiaries when you apply for a Contract. You may
change or add Beneficiaries at any time by writing to us, unless you have
designated an irrevocable Beneficiary. We will provide a change of Beneficiary
form to be signed and filed with us. Any change will be effective at the time
you sign the written notice, whether or not the Annuitant is living when we
receive the notice. Until we receive your written notice to change a
Beneficiary, we are entitled to rely on the most recent Beneficiary information
in our files. We will not be liable as to any payment or settlement made prior
to receiving the written notice. Accordingly, if you wish to change your
Beneficiary, you should deliver your written notice to us promptly.
If you did not name a Beneficiary or, if the named Beneficiary is no longer
living and there are no other surviving Beneficiaries, the new Beneficiary will
be:
o your spouse, if he or she is still alive, otherwise
o your surviving children equally, or if you have no surviving children,
o your estate.
If more than one Beneficiary survives you, (or the Annuitant, if the Contract
owner is not a natural person) we will divide the death benefit among your
Beneficiaries according to your most recent written instructions. If you have
not given us written instructions, we will pay the death benefit in equal
amounts to the surviving Beneficiaries.
MODIFICATION OF THE CONTRACT
Only a Northbrook officer may approve a change in or waive any provision of the
Contract. Any change or waiver must be in writing. None of our agents has the
authority to change or waive the provisions of the Contract. We may not change
the terms of the Contract without your consent, except to conform the Contract
to applicable law or changes in the law. If a provision of the Contract is
inconsistent with state law, we will follow state law.
ASSIGNMENT
We will not honor an assignment of an interest in a Contract as collateral or
security for a loan. However, you may assign periodic income payments under the
Contract prior to the Payout Start Date. No Beneficiary may assign benefits
under the Contract until they are payable to the Beneficiary. We will not be
bound by any assignment until the assignor signs it and files it with us. We are
not responsible for the validity of any assignment. Federal law prohibits or
restricts the assignment of benefits under many types of retirement plans and
the terms of such plans may themselves contain restrictions on assignments. An
assignment may also result in taxes or tax penalties. You should consult with an
attorney before trying to assign your Contract.
<PAGE>
PURCHASES
- ------------------------------------------------------------------------------
MINIMUM PURCHASE PAYMENTS
Your initial purchase payment must be at least $1,000. We may increase or
decrease this minimum in the future. You may make additional purchase payments
of at least $100 at any time prior to the Payout Start Date. We reserve the
right to lower the minimum and limit the maximum amount of purchase payments we
will accept. We also reserve the right to reject any application.
AUTOMATIC ADDITIONS PROGRAM
You may make subsequent purchase payments of at least $100 by automatically
transferring amounts from your bank account or your Morgan Stanley Dean Witter
Choice Account. Please consult your Morgan Stanley Dean Witter Financial Advisor
for details.
ALLOCATION OF PURCHASE PAYMENTS
At the time you apply for a Contract, you must decide how to allocate your
purchase payments among the investment alternatives. The allocation you specify
on your application will be effective immediately. All allocations must be in
whole percentages that total 100% or in whole dollars. The minimum you may
allocate to any investment alternative is $100. You can change your allocations
by notifying us in writing.
We will allocate your purchase payments to the investment alternatives according
to your most recent instructions on file with us. Unless you notify us in
writing otherwise, we will allocate subsequent purchase payments according to
the allocation for the previous purchase payment. We will effect any change in
allocation instructions at the time we receive written notice of the change in
good order.
We will credit the initial purchase payment that accompanies your completed
application to your Contract within 2 business days after we receive the payment
at our headquarters. If your application is incomplete, we will ask you to
complete your application within 5 business days. If you do so, we will credit
your initial purchase payment to your Contract within that 5 business day
period. If you do not, we will return your purchase payment at the end of the 5
business day period unless you expressly allow us to hold it until you complete
the application. We will credit subsequent purchase payments to the Contract on
the business day that we receive the purchase payment at our headquarters.
We use the term "business day" to refer to each day Monday through Friday that
the New York Stock Exchange is open for business. We also refer to these days as
"Valuation Dates." If we receive your purchase payment after 3 p.m. Central Time
on any Valuation Date, we will credit your purchase payment using the
Accumulation Unit Values computed on the next Valuation Date.
RIGHT TO CANCEL
You may cancel the Contract within the Cancellation Period, which is the 20-day
period after you receive the Contract or such longer period as your state may
require. If you exercise this Right to Cancel, the Contract terminates and we
will pay you the full amount of your purchase payments allocated to the Fixed
Account Option. We also will return your purchase payments allocated to the
Variable Account after an adjustment, to the extent state or federal law permit,
to reflect investment gain or loss that occurred from the date of allocation
through the date of cancellation. Some states may require us to return a greater
amount to you.
<PAGE>
CONTRACT VALUE
- ------------------------------------------------------------------------------
Your Contract Value at any time during the Accumulation Phase is equal to the
sum of the value of your Accumulation Units in the Variable Sub-Accounts you
have selected, plus the value of your investment in the Fixed Account Option.
ACCUMULATION UNITS
To determine the number of Accumulation Units of each Variable Sub-Account to
allocate to your Contract, we divide (i) the amount of the purchase payment or
transfer you have allocated to a Variable Sub-Account by (ii) the Accumulation
Unit Value of that Variable Sub-Account next computed after we receive your
payment or transfer. For example, if we receive a $10,000 purchase payment
allocated to a Variable Sub-Account when the Accumulation Unit Value for the
Sub-Account is $10, we would credit 1,000 Accumulation Units of that Variable
Sub-Account to your Contract. Withdrawals and transfers from a Variable
Sub-Account would, of course, reduce the number of Accumulation Units of that
Sub-Account allocated to your Contract.
ACCUMULATION UNIT VALUE
As a general matter, the Accumulation Unit Value for each Variable Sub-Account
will rise or fall to reflect:
o changes in the share price of the Portfolio in which the Variable
Sub-Account invests, and
o the deduction of amounts reflecting the mortality and expense risk charge,
administrative expense charge, and any provision for taxes that have
accrued since we last calculated the Accumulation Unit Value.
We determine transfer fees (currently waived) separately for each Contract. They
do not affect Accumulation Unit Value. Instead, we obtain payment of those
charges and fees by redeeming Accumulation Units. For details on how we
calculate Accumulation Unit Value, please refer to the Statement of Additional
Information.
We determine a separate Accumulation Unit Value for each Variable Sub-Account on
each Valuation Date. We also determine a separate set of Accumulation Unit
Values that reflect the cost of the Performance Death Benefit Option, or the
Performance Income Benefit Option, and a third set of Accumulation Unit Values
that reflect the cost of the Performance Benefit Combination Option and Death
Benefit Combination Option.
You should refer to the prospectuses for the Funds that accompany this
prospectus for a description of how the assets of each Portfolio are valued,
since that determination directly bears on the Accumulation Unit Value of the
corresponding Variable Sub-Account and, therefore, your Contract Value.
<PAGE>
INVESTMENT ALTERNATIVES: The Variable Sub-Accounts
- ------------------------------------------------------------------------------
You may allocate your purchase payments to up to 21 Variable Sub-Accounts. Each
Variable Sub-Account invests in the shares of a corresponding Portfolio. Each
Portfolio has its own investment objective(s) and policies. We briefly describe
the Portfolios below.
For more complete information about each Portfolio, including the investment
objective(s), expenses and risks associated with the Portfolio, please refer to
the accompanying prospectuses for the Funds. You should carefully review the
Fund prospectuses before allocating amounts to the Variable Sub-Accounts.
<TABLE>
<CAPTION>
- ------------------------------------ -------------------------------------------------------------- ---------------------
<S> <C> <C>
Investment
Portfolio: Each Portfolio Seeks: Adviser:
- --------------------------------------------------------------------------------------------------- ---------------------
Morgan Stanley Dean Witter Variable Investment Series
- --------------------------------------------------------------------------------------------------- ---------------------
Money Market Portfolio High current income, preservation of capital, and liquidity
Morgan Stanley Dean
Witter Advisors,
Inc.
- ------------------------------------ -------------------------------------------------------------- ---------------------
- ------------------------------------ -------------------------------------------------------------- ---------------------
Quality Income Plus Portfolio High current income
and, as a secondary objective, capital
appreciation when consistent with its
primary objective
- ------------------------------------ -------------------------------------------------------------- ---------------------
- ------------------------------------ -------------------------------------------------------------- ---------------------
Short-Term Bond Portfolio High current income consistent with preservation of capital
- ------------------------------------ -------------------------------------------------------------- ---------------------
- ------------------------------------ -------------------------------------------------------------- ---------------------
High Yield Portfolio High current income and, as a secondary objective, capital appreciation
when consistent with its primary objective
- ------------------------------------ -------------------------------------------------------------- ---------------------
- ------------------------------------ -------------------------------------------------------------- ---------------------
Utilities Portfolio Capital appreciation and current income.
- ------------------------------------ -------------------------------------------------------------- ---------------------
- ------------------------------------ -------------------------------------------------------------- ---------------------
Income Builder Portfolio Reasonable income and, as a secondary objective, growth of
capital
- ------------------------------------ -------------------------------------------------------------- ---------------------
- ------------------------------------ -------------------------------------------------------------- ---------------------
Dividend Growth Portfolio Reasonable current income and long-term growth of income and
capital
- ------------------------------------ -------------------------------------------------------------- ---------------------
- ------------------------------------ -------------------------------------------------------------- ---------------------
Capital Growth Portfolio Long-term capital growth
- ------------------------------------ -------------------------------------------------------------- ---------------------
- ------------------------------------ -------------------------------------------------------------- ---------------------
Global Dividend Growth Portfolio Reasonable current income and long-term growth of income and
capital
- ------------------------------------ -------------------------------------------------------------- ---------------------
- ------------------------------------ -------------------------------------------------------------- ---------------------
European Growth Portfolio To maximize the capital appreciation on its investments
- ------------------------------------ -------------------------------------------------------------- ---------------------
- ------------------------------------ -------------------------------------------------------------- ---------------------
Pacific Growth Portfolio To maximize the capital appreciation on its investments
- ------------------------------------ -------------------------------------------------------------- ---------------------
- ------------------------------------ -------------------------------------------------------------- ---------------------
Aggressive Equity Portfolio Capital Growth
- ------------------------------------ -------------------------------------------------------------- ---------------------
- ------------------------------------ -------------------------------------------------------------- ---------------------
Equity Portfolio Growth of capital and, as a secondary objective, income when consistent
with its primary objective.
- ------------------------------------ -------------------------------------------------------------- ---------------------
- ------------------------------------ -------------------------------------------------------------- ---------------------
S&P 500 Index Investment results that, before expenses, correspond to the
total return of the Standard and Poor's 500 Composite Stock
Price Index
- ------------------------------------ -------------------------------------------------------------- ---------------------
- ------------------------------------ -------------------------------------------------------------- ---------------------
Competitive Edge "Best Ideas" Long-term capital growth
Portfolio
- ------------------------------------ -------------------------------------------------------------- ---------------------
- ------------------------------------ -------------------------------------------------------------- ---------------------
Strategist Portfolio High total investment return
---------------------
- -------------------------------------------------------------------------------------------------------------------------
Morgan Stanley Dean Witter Universal Funds, Inc.
- -------------------------------------------------------------------------------------------------------------------------
Equity Growth Portfolio Long-term capital appreciation
Dean Witter Investment
Management Inc.
- ------------------------------------ -------------------------------------------------------------- ---------------------
- ------------------------------------ -------------------------------------------------------------- ---------------------
U.S. Real Estate Portfolio Above-average current income and long-term capital
appreciation
- ------------------------------------ -------------------------------------------------------------- ---------------------
- ------------------------------------ -------------------------------------------------------------- ---------------------
International Magnum Portfolio Long-term capital appreciation
- ------------------------------------ -------------------------------------------------------------- ---------------------
Emerging Markets Equity Portfolio Long-term capital appreciation
- -------------------------------------------------------------------------------------------------------------------------
Van Kampen Life Investment Trust
- -------------------------------------------------------------------------------------------------------------------------
Emerging Growth Portfolio Capital appreciation Van Kampen Asset
Management Inc.
- ------------------------------------ -------------------------------------------------------------- ---------------------
</TABLE>
Amounts you allocate to Variable Sub-Accounts may grow in value, decline in
value, or grow less than you expect, depending on the investment performance of
the Portfolios in which those Variable Sub-Accounts invest. You bear the
investment risk that the Portfolios might not meet their investment objectives.
Shares of the Portfolios are not deposits, or obligations of, or guaranteed or
endorsed by any bank and are not insured by the Federal Deposit Insurance
Corporation, the Federal Reserve Board or any other agency.
<PAGE>
INVESTMENT ALTERNATIVES: The Fixed Account Option
- ------------------------------------------------------------------------------
You may allocate all or a portion of your purchase payments to the Fixed
Account. We are currently offering only a Dollar Cost Averaging Fixed Account
Option ("Dollar Cost Averaging Option"), described below. We may offer
additional Fixed Account options in the future. The Dollar Cost Averaging Option
may not be available in all states. Northbrook may also limit the availability
of the Dollar Cost Averaging Option. Please consult with your Morgan Stanley
Dean Witter Financial Advisor for current information. The Fixed Account
supports our insurance and annuity obligations. The Fixed Account consists of
our general assets other than those in segregated asset accounts. We have sole
discretion to invest the assets of the Fixed Account, subject to applicable law.
Any money you allocate to the Fixed Account does not entitle you to share in the
investment experience of the Fixed Account.
DOLLAR COST AVERAGING OPTION
You may establish a Dollar Cost Averaging Program, as described on page __, by
allocating purchase payments to the Dollar Cost Averaging Option. Purchase
payments that you allocate to the Dollar Cost Averaging Option will earn
interest for up to a 1 year period at the current rate in effect at the time of
allocation. We will credit interest daily at a rate that will compound over the
year to the annual interest rate we guaranteed at the time of allocation. You
may not transfer funds from other investment alternatives to the Dollar Cost
Averaging Option.
The crediting rates for the Dollar Cost Averaging Option will never be less than
3% annually.
We may declare more than one interest rate for different monies based upon the
date of allocation to the Dollar Cost Averaging Option. For current interest
rate information, please contact your Morgan Stanley Dean Witter Financial
Advisor or our customer support unit at 1-800-654-2397.
<PAGE>
INVESTMENT ALTERNATIVES: Transfers
- ------------------------------------------------------------------------------
TRANSFERS DURING THE ACCUMULATION PHASE
During the Accumulation Phase, you may transfer the Contract Value among the
investment alternatives. You may not transfer Contract Value into the Dollar
Cost Averaging Option. You may request transfers in writing on a form that we
provide or by telephone according to the procedure described below. The minimum
amount that you may transfer is $100 or the total amount in the investment
alternative, whichever is less. We currently do not assess, but reserve the
right to assess, a $25 charge on each transfer in excess of 12 per Contract
Year. We will notify you at least 30 days before we begin imposing the transfer
charge. We treat transfers to or from more than one Portfolio on the same day as
one transfer.
We will process transfer requests that we receive before 3:00 p.m. Central Time
on any Valuation Date using the Accumulation Unit Values for that Date. We will
process requests completed after 3:00 p.m. on any Valuation Date using the
Accumulation Unit Values for the next Valuation Date. The Contract permits us to
defer transfers from the Fixed Account Option for up to 6 months from the date
we receive your request. If we decide to postpone transfers for 30 days or more,
we will pay interest as required by applicable law. Any interest would be
payable from the date we receive the transfer request to the date we make the
transfer.
We reserve the right to limit transfers among the Variable Sub-Accounts if we
determine, in our sole discretion, that transfers by one or more Contract owners
would be to the disadvantage of other Contract owners. We may limit transfers by
taking such steps as:
o imposing a minimum time period between each transfer,
o refusing to accept transfer requests of an agent acting under a power of
attorney on behalf of more than one Contract owner, or
o limiting the dollar amount that a Contract owner may transfer between the
Variable Sub-Accounts and the Fixed Account Option at any one time.
We may apply the restrictions in any manner reasonably designed to prevent
transfers that we consider disadvantageous to other Contract owners.
We reserve the right to waive any transfer restrictions.
TRANSFERS DURING THE PAYOUT PHASE
During the Payout Phase, you may make transfers among the Variable Sub-Accounts
so as to change the relative weighting of the Variable Sub-Accounts on which
your variable income payments will be based. In addition, you will have a
limited ability to make transfers from the Variable Sub-Accounts to increase the
proportion of your income payments consisting of fixed income payments. You may
not, however, convert any portion of your right to receive fixed income payments
into variable income payments.
You may not make any transfers for the first 6 months after the Payout Start
Date. Thereafter, you may make transfers among the Variable Sub-Accounts or make
transfers from the Variable Sub-Accounts to increase the proportion of your
income payments consisting of fixed income payments. Your transfers must be at
least 6 months apart.
TELEPHONE TRANSFERS
You may make transfers by telephone by calling 1-800-654-2397 if you have on
file a completed authorization form. The cut off time for telephone transfer
requests is 3:00 p.m. Central Time. In the event that the New York Stock
Exchange closes early, i.e., before 3:00 p.m. Central Time, or in the event that
the Exchange closes early for a period of time but then reopens for trading on
the same day, we will process telephone transfer requests as of the close of the
Exchange on that particular day. We will not accept telephone requests received
at any telephone number other than the number that appears in this paragraph or
received after the close of trading on the Exchange.
We may suspend, modify or terminate the telephone transfer privilege at any time
without notice.
We use procedures that we believe provide reasonable assurance that the
telephone transfers are genuine. For example, we tape telephone conversations
with persons purporting to authorize transfers and request identifying
information. Accordingly, we disclaim any liability for losses resulting from
allegedly unauthorized telephone transfers. However, if we do not take
reasonable steps to help ensure that a telephone authorization is valid, we may
be liable for such losses.
DOLLAR COST AVERAGING PROGRAM
Through our Dollar Cost Averaging Program, you may automatically transfer a set
amount every month (or other intervals we may offer) during the Accumulation
Phase from any Variable Sub-Account or the Dollar Cost Averaging Option to any
Variable Sub-Account. Transfers made through dollar cost averaging must be $100
or more.
We will not charge a transfer fee for transfers made under this Program, nor
will such transfers count against the 12 transfers you can make each Contract
Year without paying a transfer fee.
The theory of dollar cost averaging is that if purchases of equal dollar amounts
are made at fluctuating prices, the aggregate average cost per unit will be less
than the average of the unit prices on the same purchase dates. However,
participation in this Program does not assure you of a greater profit from your
purchases under the Program nor will it prevent or necessarily reduce losses in
a declining market. Call or write us for information on how to enroll.
AUTOMATIC PORTFOLIO REBALANCING PROGRAM
Once you have allocated your money among the Variable Sub-Accounts, the
performance of each Sub-Account may cause a shift in the percentage you
allocated to each Sub-Account. If you select our Automatic Portfolio Rebalancing
Program, we will automatically rebalance the Contract Value in each Variable
Sub-Account and return it to the desired percentage allocations. We will not
include money you allocate to the Fixed Account Option in the Automatic
Portfolio Rebalancing Program.
We will rebalance your account each quarter (or other intervals that we may
offer) according to your instructions. We will transfer amounts among the
Variable Sub-Accounts to achieve the percentage allocations you specify. You can
change your allocations at any time by contacting us in writing or by telephone.
The new allocation will be effective with the first rebalancing that occurs
after we receive your request. We are not responsible for rebalancing that
occurs prior to receipt of your request.
Example:
Assume that you want your initial purchase payment split among 2
Variable Sub-Accounts. You want 40% to be in the High Yield Variable
Sub-Account and 60% to be in the Equity Growth Variable Sub-Account.
Over the next 2 months the bond market does very well while the stock
market performs poorly. At the end of the first quarter, the High
Yield Variable Sub-Account now represents 50% of your holdings because
of its increase in value. If you choose to have your holdings
rebalanced quarterly, on the first day of the next quarter, we would
sell some of your units in the High Yield Variable Sub-Account and use
the money to buy more units in the Equity Growth Variable Sub-Account
so that the percentage allocations would again be 40% and 60%
respectively.
The Automatic Portfolio Rebalancing Program is available only during the
Accumulation Phase. The transfers made under the Program do not count towards
the 12 transfers you can make without paying a transfer fee, and are not subject
to a transfer fee.
Portfolio rebalancing is consistent with maintaining your allocation of
investments among market segments, although it is accomplished by reducing your
Contract Value allocated to the better performing segments.
<PAGE>
EXPENSES
- ------------------------------------------------------------------------------
As a Contract owner, you will bear, directly or indirectly, the charges and
expenses described below.
MORTALITY AND EXPENSE RISK CHARGE
We deduct a mortality and expense risk charge daily at an annual rate of 0.60%
of the average daily net assets you have invested in the Variable Sub-Accounts
(0.73% if you select either the Performance Death Benefit Option or the
Performance Income Benefit Option, and 0.84% if you select the Performance
Benefit Combination Option or the Death Benefit Combination Option). The
mortality and expense risk charge is for all the insurance benefits available
with your Contract (including our guarantee of annuity rates and the death
benefits), for certain expenses of the Contract, and for assuming the risk
(expense risk) that the current charges will not be sufficient in the future to
cover the cost of administering the Contract. If the charges under the Contract
are not sufficient, then we will bear the loss. We charge an additional amount
for the Death Benefit Options and the Performance Income Benefit Option to
compensate us for the additional risk that we accept by providing these Options.
We guarantee the mortality and expense risk charge and we cannot increase it. We
assess the mortality and expense risk charge during both the Accumulation Phase
and the Payout Phase.
ADMINISTRATIVE EXPENSE CHARGE
We deduct an administrative expense charge daily at an annual rate of 0.10% of
the average daily net assets you have invested in the Variable Sub-Accounts. We
guarantee the administrative expense charge and we cannot increase it. We intend
this charge to cover actual administrative expenses. There is no necessary
relationship between the amount of administrative charge imposed on a given
Contract and the amount of expenses that may be attributed to that Contract. We
assess this charge each day during the Accumulation Phase and the Payout Phase.
TRANSFER FEE
We do not currently impose a fee upon transfers among the investment
alternatives. However, we reserve the right to charge a $25 per transfer after
the 12th transfer in each Contract Year. We will not charge a transfer fee on
transfers that are part of a Dollar Cost Averaging or Automatic Portfolio
Rebalancing Program.
PREMIUM TAXES
Some states and other governmental entities (e.g., municipalities) charge
premium taxes or similar taxes. We are responsible for paying these taxes and
will deduct them from your Contract Value. Some of these taxes are due when the
Contract is issued, others are due when income payments begin or upon surrender.
Our current practice is not to charge anyone for these taxes until income
payments begin or when a total withdrawal occurs including payment upon death.
At our discretion, we may discontinue this practice and deduct premium taxes
from the purchase payments. Premium taxes generally range from 0% to 4%,
depending on the state.
At the Payout Start Date, if applicable, we deduct the charge for premium taxes
from each investment alternative in the proportion that the Contract owner's
value in the investment alternative bears to the total Contract Value.
DEDUCTION FOR VARIABLE ACCOUNT INCOME TAXES
We are not currently making a provision for taxes. In the future, however, we
may make a provision for taxes if we determine, in our sole discretion, that we
will incur a tax as a result of the operation of the Variable Account. We will
deduct for any taxes we incur as a result of the operation of the Variable
Account, whether or not we previously made a provision for taxes and whether or
not it was sufficient. Our status under the Internal Revenue Code is briefly
described in the Statement of Additional Information.
OTHER EXPENSES
Each Portfolio deducts advisory fees and other expenses from its assets. You
indirectly bear the charges and expenses of the Portfolios whose shares are held
by the Variable Sub-Accounts. These fees and expenses are described in the
accompanying prospectuses for the Funds. For a summary of current estimates of
those charges and expenses, see pages above. We may receive compensation from
the investment advisers or administrators of the Portfolios for administrative
services we provide to the Portfolios.
The Preferred Client Variable Annuity is offered only to participants in the
Choice Account Program. The fees and expenses associated with the Program are
separate from and in addition to the fees and expenses associated with the
Preferred Client Variable Annuity. You should consult your Morgan Stanley Dean
Witter Financial Advisor for details.
<PAGE>
ACCESS TO YOUR MONEY
- ------------------------------------------------------------------------------
You can withdraw some or all of your Contract Value at any time during the
Accumulation Phase. Withdrawals also are available under limited circumstances
on or after the Payout Start Date. See "Income Plans" on page __.
You can withdraw money from the Variable Account and/or the Fixed Account
Option. The amount payable upon withdrawal is the Contract Value (or portion
thereof) next computed after we receive the request for a withdrawal at our
headquarters, less any income tax withholding, penalty tax, and any premium
taxes. To complete a partial withdrawal from the Variable Account, we will
cancel Accumulation Units in an amount equal to the withdrawal and any
applicable charges and taxes. We will pay withdrawals from the Variable Account
within 7 days of receipt of the request, subject to postponement in certain
circumstances.
You must name the investment alternative from which you are taking the
withdrawal. If none is named, then the withdrawal request is incomplete and
cannot be honored. In general, you must withdraw at least $500 at a time. You
also may withdraw a lesser amount if you are withdrawing your entire interest in
a Variable Sub-Account.
We impose no withdrawal charge for withdrawals out of the Preferred Client
Variable Annuity. However, withdrawals, including withdrawals made to pay all or
part of any fee associated with the Choice Account Program, also may be subject
to income tax and a 10% penalty tax, as described in "Taxes," below. In
addition, a charge may apply if your decide to no longer participate in the
Choice Account Program. You should consult your Morgan Stanley Dean Witter
Financial advisor for details.
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.
POSTPONEMENT OF PAYMENTS
We may postpone the payment of any amounts due from the Variable Account under
the Contract if:
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 SEC; or
3) The SEC permits delay for your protection.
In addition, we may delay payments or transfers from the Fixed Account Option
for up to 6 months or shorter period if required by law. If we delay payment or
transfer for 30 days or more, we will pay interest as required by applicable
law. Any interest would be payable from the date we receive the withdrawal
request to the date we make the payment or transfer.
SYSTEMATIC WITHDRAWAL PROGRAM
You may choose to receive systematic withdrawal payments on a monthly basis at
any time prior to the Payout Start Date. The minimum amount of each systematic
withdrawal is $100. We will deposit systematic withdrawal payments into the
Contract owner's bank account or Morgan Stanley Dean Witter Account. Please
consult with your Morgan Stanley Dean Witter Financial Advisor for details.
Depending on fluctuations in the value of the Variable Sub-Accounts and the
value of the Fixed Account Option, systematic withdrawals may reduce or even
exhaust the Contract Value. Income taxes may apply to systematic withdrawals.
Please consult your tax advisor before taking any withdrawal.
We may modify or suspend the Systematic Withdrawal Program and charge a
processing fee for the service. If we modify or suspend the Systematic
Withdrawal Program, existing systematic withdrawal payments will not be
affected.
MINIMUM CONTRACT VALUE
If your request for a partial withdrawal would reduce your Contract Value to
less than $1,000, we may treat it as a request to withdraw your entire Contract
Value. Your Contract will terminate if you withdraw all of your Contract Value.
We will, however, ask you to confirm your withdrawal request before terminating
your Contract. If we terminate your Contract, we will distribute to you its
Contract Value, less any applicable charges and taxes.
<PAGE>
INCOME PAYMENTS
- ------------------------------------------------------------------------------
PAYOUT START DATE
The Payout Start Date is the day that money is applied to an Income Plan. The
Payout Start Date must be no later than:
o the Annuitant's 90th birthday, or
o the 10th Contract Anniversary, if later.
You may change the Payout Start Date at any time by notifying us in writing of
the change at least 30 days before the scheduled Payout Start Date. Absent a
change, we will use the Payout Start Date stated in your Contract.
INCOME PLANS
An "Income Plan" is a series of payments on a scheduled basis to you or to
another person designated by you. You may choose and change your choice of
Income Plan until 30 days before the Payout Start Date. If you do not select an
Income Plan, we will make income payments in accordance with Income Plan 1 with
guaranteed payments for 10 years. After the Payout Start Date, you may not make
withdrawals (except as described below) or change your choice of Income Plan.
Three Income Plans are available under the Contract. Each is available to
provide:
o fixed income payments;
o variable income payments; or
o a combination of the two.
The three Income Plans are:
Income Plan 1 - Life Income with Guaranteed Payments. Under this plan,
we make periodic income payments for at least as long as the Annuitant
lives. If the Annuitant dies before we have made all of the guaranteed
income payments, we will continue to pay the remainder of the
guaranteed income payments as required by the Contract.
Income Plan 2 -- Joint and Survivor Life Income. Under this plan, we
make periodic income payments for as long as either the Annuitant or
the joint Annuitant is alive.
Income Plan 3 -- Guaranteed Payments for a Specified Period (5 to 30
Years). Under this plan, we make periodic income payments for the
period you have chosen. These payments do not depend on the Annuitant's
life. We will deduct the mortality and expense risk charge from the
assets of the Variable Account supporting this Income Plan even though
we may not bear any mortality risk.
The length of any guaranteed payment period under your selected Income Plan
generally will affect the dollar amounts of each income payment. As a general
rule, longer guarantee periods result in lower income payments, all other things
being equal. For example, if you choose an Income Plan with payments that depend
on the life of the Annuitant but with no minimum specified period for guaranteed
payments, the income payments generally will be greater than the income payments
made under the same Income Plan with a minimum specified period for guaranteed
payments.
We may make other Income Plans available including ones that you and we agree
upon. You may obtain information about them by writing or calling us.
If you choose Income Plan 1 or 2, or, if available, another Income Plan with
payments that continue for the life of the Annuitant or joint Annuitant, we may
require proof of age and sex of the Annuitant or joint Annuitant before starting
income payments, and proof that the Annuitant or joint Annuitant is still alive
before we make each payment. Please note that under such Income Plans, if you
elect to take no minimum guaranteed payments, it is possible that the payee
could receive only 1 income payment if the Annuitant and any joint Annuitant
both die before the second income payment, or only 2 income payments if they die
before the third income payment, and so on.
Generally, you may not make withdrawals after the Payout Start Date. One
exception to this rule applies if you are receiving variable income payments
that do not depend on the life of the Annuitant (such as under Income Plan 3).
In that case you may terminate the Variable Account portion of the income
payments at any time and receive a lump sum equal to the present value of the
remaining variable payments due.
You may apply your Contract Value to an Income Plan. If you elected the
Performance Income Benefit Option, you may be able to apply an amount greater
than your Contract Value to an Income Plan. You must apply at least the Contract
Value in the Fixed Account Option on the Payout Start Date to fixed income
payments. If you wish to apply any portion of your Fixed Account Option balance
to provide variable income payments, you should plan ahead and transfer that
amount to the Variable Sub-Accounts prior to the Payout Start Date. If you do
not tell us how to allocate your Contract Value among fixed and variable income
payments, we will apply your Contract Value in the Variable Account to variable
income payments and your Contract Value in the Fixed Account Option to fixed
income payments.
We will apply your Contract Value, less applicable taxes, to your Income Plan on
the Payout Start Date. If the amount available to apply under an Income Plan is
less than $2,000, or not enough to provide an initial payment of at least $20,
and state law permits, we may:
o terminate the Contract and pay you the Contract Value, less any applicable
taxes, in a lump sum instead of the periodic payments you have chosen, or
o we may reduce the frequency of your payments so that each payment will be
at least $20.
VARIABLE INCOME PAYMENTS
The amount of your variable income payments depends upon the investment results
of the Variable Sub-Accounts you select, the premium taxes you pay, the age and
sex of the Annuitant, and the Income Plan you choose. We guarantee that the
payments will not be affected by (a) actual mortality experience and (b) the
amount of our administration expenses.
We cannot predict the total amount of your variable income payments. Your
variable income payments may be more or less than your total purchase payments
because (a) variable income payments vary with the investment results of the
underlying Portfolios, and (b) the Annuitant could live longer or shorter than
we expect based on the tables we use.
In calculating the amount of the periodic payments in the annuity tables in the
Contract, we assumed an annual investment rate of 3%. If the actual net
investment return of the Variable Sub-Accounts you choose is less than this
assumed investment rate, then the dollar amount of your variable income payments
will decrease. The dollar amount of your variable income payments will increase,
however, if the actual net investment return exceeds the assumed investment
rate. The dollar amount of the variable income payments stays level if the net
investment return equals the assumed investment rate. Please refer to the
Statement of Additional Information for more detailed information as to how we
determine variable income payments.
FIXED INCOME PAYMENTS
We guarantee income payment amounts derived from any Fixed Account Option for
the duration of the Income Plan. We calculate the fixed income payments by:
1) deducting any applicable premium tax; and
2) applying the resulting amount to the greater of (a) the appropriate
value from the income payment table in your Contract or (b) such
other value as we are offering at that time.
We may defer making fixed income payments for a period of up to 6 months or such
shorter time state law may require. If we defer payments for 30 days or more, we
will pay interest as required by law from the date we receive the withdrawal
request to the date we make payment.
PERFORMANCE INCOME BENEFIT
The Performance Income Benefit is an optional benefit that you may elect. On the
date we issue the rider for this benefit ("Rider Date"), the Performance Income
Benefit is equal to the Contract Value. On each Contract Anniversary, we will
recalculate your Performance Income Benefit to equal the greater of your
Contract Value on that date or the most recently calculated Performance Income
Benefit. We will also recalculate your Performance Income Benefit whenever you
make an additional purchase payment or a partial withdrawal. Additional purchase
payments will increase the Performance Income Benefit dollar-for-dollar.
Withdrawals will reduce the Performance Income Benefit by an amount equal to:
(i) the Performance Income Benefit just before the withdrawal, multiplied by
(ii) the ratio of the withdrawal amount to the Contract Value just before the
withdrawal.
In the absence of any withdrawals or purchase payments, the Performance Income
Benefit will be the greatest of the Contract Value on the Rider Date and all
Contract Anniversary Contract Values on or prior to the Payout Start Date.
We will recalculate the Performance Income Benefit as described above until the
oldest Contract owner or Annuitant (if the Contract owner is not a natural
person) attains age 85. After age 85, we will only recalculate the Performance
Income Benefit to reflect additional purchase payments and withdrawals. You must
exercise the benefit by age 90.
To exercise your Performance Income Benefit, you must apply it to an Income
Plan. The Payout Start Date you select must begin on or after your tenth
Contract Anniversary, after electing the benefit, and within 30 days after a
Contract Anniversary. In addition, you must apply your Performance Income
Benefit to an Income Plan that provides guaranteed payments for either a single
or joint life for at least:
1) 10 years, if the youngest Annuitant's age is 80 or less on the date you
apply the Benefit, or
2) 5 years, if the youngest Annuitant's age is greater than 80 on the date you
apply the Benefit.
If your current Contract Value is higher than the Performance Income Benefit,
you can apply the Contract Value to any Income Plan. The Performance Income
Benefit may not be available in all states.
At present, we do not permit you to simultaneously elect the Performance Income
Benefit and the Death Benefit Combination Option. We do, however, reserve the
right to do so in the future.
CERTAIN EMPLOYEE BENEFIT PLANS
The Contracts offered by this prospectus contain income payment tables that
provide for different payments to men and women of the same age, except in
states that require unisex tables. We reserve the right to use income payment
tables that do not distinguish on the basis of sex to the extent permitted by
law. In certain employment-related situations, employers are required by law to
use the same income payment tables for men and women. Accordingly, if the
Contract is to be used in connection with an employment-related retirement or
benefit plan and we do not offer unisex annuity tables in your state, you should
consult with legal counsel as to whether the purchase of a Contract is
appropriate.
<PAGE>
DEATH BENEFITS
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We will pay a death benefit if, prior to the Payout Start Date:
1) any Contract owner dies, or
2) the Annuitant dies.
We will pay the death benefit to the new Contract owner as determined
immediately after the death. The new Contract owner would be a surviving
Contract owner or, if none, the Beneficiary. In the case of the death of an
Annuitant, we will pay the death benefit to the current Contract owner.
A request for payment of the death benefit must include "Due Proof of Death." We
will accept the following documentation as Due Proof of Death:
o a certified copy of a death certificate,
o a certified copy of a decree of a court of competent jurisdiction as to the
finding of death, or
o any other proof acceptable to us.
Death Benefit Amount
Prior to the Payout Start Date, the death benefit is equal to the greatest of:
1) the Contract Value as of the date we determine the death benefit, or
2) the sum of all purchase payments made less any amounts deducted in
connection with partial withdrawals (including any applicable premium
taxes), or
3) the Contract Value on the most recent Death Benefit Anniversary prior
to the date we determine the death benefit, plus any purchase payments
and less any amounts deducted in connection with any partial
withdrawals since that Death Benefit Anniversary.
A "Death Benefit Anniversary" is every 6th Contract Anniversary beginning with
the 6th Contract Anniversary. For example, the 6th, 12th and 18th Contract
Anniversaries are the first three Death Benefit Anniversaries.
We will determine the value of the death benefit as of the end of the Valuation
Date on which we receive a complete request for payment of the death benefit. If
we receive a request after 3 p.m. Central Time on a Valuation Date, we will
process the request as of the end of the following Valuation Date.
Death Benefit Options
The Performance Death Benefit, the Performance Benefit Combination, and the
Death Benefit Combination Options are optional benefits that you may elect. If
the Contract owner is a natural person, these Options apply only on the death of
the Contract owner. If the Contract owner is not a natural person, these Options
apply only on the death of the Annuitant. For Contracts with a death benefit
option, the death benefit will be the greater of (1) through (3) above, or (4)
the death benefit option you selected. The death benefit options may not be
available in all states.
Performance Death Benefit Option. The Performance Death Benefit on the date we
issue the rider for this option ("Rider Date") is equal to the Contract Value.
On each Contract Anniversary, we will recalculate your Performance Death Benefit
to equal the greater of your Contract Value on that date, or the most recently
calculated Performance Death Benefit. We also will recalculate your Performance
Death Benefit whenever you make an additional purchase payment or a partial
withdrawal. Additional purchase payments will increase the Performance Death
Benefit dollar-for-dollar. Withdrawals will reduce the Performance Death Benefit
by an amount equal to: (i) the Performance Death Benefit immediately before the
withdrawal, multiplied by (ii) the ratio of the withdrawal amount to the
Contract Value just before the withdrawal. In the absence of any withdrawals or
purchase payments, the Performance Death Benefit will be the greatest of the
Contract Value on the Rider Date and all Contract Anniversary Contract Values on
or before the date we calculate the death benefit.
We will recalculate the Performance Death Benefit as described above until the
oldest Contract owner (the Annuitant, if the owner is not a natural person),
attains age 85. After age 85, we will recalculate the Performance Death Benefit
only to reflect additional purchase payments and withdrawals.
Death Benefit Combination Option. If you select the Death Benefit Combination
Option, the death benefit payable will be the greater of the death benefits
provided by the Performance Death Benefit or the Enhanced Death Benefit
described below. The Enhanced Death Benefit is only available through the Death
Benefit Combination Option. We sometimes refer to the Death Benefit Combination
Option as the "Best of the Best" death benefit option.
Enhanced Death Benefit. The Enhanced Death Benefit on the date we issue
the rider for this option ("Rider Date") is equal to the Contract
Value. On the first Contract anniversary after the Rider Date, the
Enhanced Death Benefit is equal to the Contract Value on the Rider Date
plus interest at an annual rate of 5% per year for the portion of the
year since the Rider Date. On each subsequent Contract Anniversary, we
will multiply the Enhanced Death Benefit as of the prior Contract
Anniversary by 1.05. This results in an increase of 5% annually.
We will recalculate the Enhanced Death Benefit as described above, but
not beyond the Contract Anniversary preceding the oldest Contract
owner's (the Annuitant, if the owner is not a natural person), 85th
birthday. For all ages, we will recalculate the Enhanced Death Benefit
on each Contract Anniversary, or upon receipt of a death claim, as
follows:
o We will reduce the Enhanced Death Benefit by the percentage of any Contract
Value withdrawn since the prior Contract Anniversary; and
o We will increase the Enhanced Death Benefit by any additional purchase
payments since the prior Contract Anniversary.
Performance Benefit Combination Option. You may elect the Performance Death
Benefit in combination with the Performance Income Benefit. We call this the
"Performance Benefit Combination Option."
None of the Enhanced Death Benefit, the Performance Death Benefit, the
Performance Benefit Combination, or the Death Benefit Combination will ever be
greater than the maximum death benefit allowed by any nonforfeiture laws which
govern the Contract.
Death Benefit Payments
If the new Contract owner is a natural person, the new Contract owner may elect
to:
1) receive the death benefit in a lump sum, or
2) apply the death benefit to an Income Plan. Payments from the Income
Plan must begin within 1 year of the date of death and must be payable
throughout:
o the life of the new Contract owner; or
o for a guaranteed number of payments from 5 to 30 years, but not
to exceed the life expectancy of the [new] Contract owner.
Options 1 and 2 above are only available if the new Contract owner elects one of
these options within 180 days of the date of death. Otherwise, the new Contract
owner will receive the Settlement Value. The "Settlement Value" is the Contract
Value, less premium tax. The Settlement Value paid will be the Settlement Value
next computed on or after the requested distribution date for payment, or on the
mandatory distribution date of 5 years after the date of your death, whichever
is earlier. We are currently waiving the 180 day limit, but we reserve the right
to enforce the limitation in the future.
In any event, the entire value of the Contract must be distributed within 5
years after the date of death unless an Income Plan is elected or a surviving
spouse continues the Contract in accordance with the provisions described below.
If the new Contract owner is your spouse, then he or she may elect one of the
options listed above or may continue the Contract in the Accumulation Phase as
if the death had not occurred. On the date the Contract is continued, the
Contract Value will equal the amount of the death benefit as determined as of
the Valuation Date on which we received Due Proof of Death (the next Valuation
Date, if we receive Due Proof of Death after 3 p.m. Central Time). The Contract
may only be continued once.
If the new Contract owner is corporation, trust, or other non-natural person,
then the new Contract owner may elect, within 180 days of your death, to receive
the death benefit in lump sum or may elect to receive the Settlement Value in a
lump sum within 5 years of death. We are currently waiving the 180 day limit,
but we reserve the right to enforce the limitation in the future.
Death of Annuitant. If any Annuitant who is not also the Contract owner dies
prior to the Payout Start Date, the Contract owner must elect one of the
applicable options described below.
If the Contract owner is a natural person, the Contract owner may elect to
continue the Contract as if the death had not occurred, or, if we receive Due
Proof of Death within 180 days of the date of the Annuitant's death, the
Contract owner may choose to:
1) receive the death benefit in a lump sum; or
2) apply the death benefit to an Income Plan that must begin within 1
year of the date of death and must be for a guaranteed number of
payments for a period from 5 to 30 years but not to exceed the life
expectancy of the Contract owner.
If the Contract owner elects to continue the Contract or to apply the death
benefit to an Income Plan, the new Annuitant will be the youngest Contract
owner, unless the Contract owner names a different Annuitant.
If the Contract owner is a non-natural person, the non-natural Contract owner
may elect, within 180 days of the Annuitant's date of death, to receive the
death benefit in a lump sum or may elect to receive the Settlement Value payable
in a lump sum within 5 years of the Annuitant's date of death. If the
non-natural Contract owner does not make one of the above described elections,
the Settlement Value must be withdrawn by the non-natural Contract owner on or
before the mandatory distribution date 5 years after the Annuitant's death.
We are currently waiving the 180 day limit, but we reserve the right to enforce
the limitation in the future.
<PAGE>
MORE INFORMATION
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NORTHBROOK
Northbrook is the issuer of the Contract. Northbrook is an Arizona stock life
insurance company organized in 1978. Northbrook is currently licensed to operate
in all states (except New York), the District of Columbia, and Puerto Rico. We
intend to offer the Contract in those jurisdictions in which we are licensed.
Our headquarters are located at 3100 Sanders Road, Northbrook, Illinois, 60062.
Northbrook is a wholly owned subsidiary of Allstate Life Insurance Company
("Allstate Life"), an Illinois stock life insurance company. Allstate Life is a
wholly owned subsidiary of Allstate Insurance Company, an Illinois stock
property-liability insurance company. All of the outstanding capital stock of
Allstate Insurance Company is owned by The Allstate Corporation.
Northbrook and Allstate Life entered into a reinsurance agreement effective
December 31, 1987. Under the reinsurance agreement, Allstate Life reinsures all
of Northbrook's liabilities under the Contracts. The reinsurance agreement
provides us with financial backing from Allstate Life. However, it does not
create a direct contractual relationship between Allstate Life and you. In other
words, the obligations of Allstate Life under the reinsurance agreement are to
Northbrook; Northbrook remains the sole obligor under the Contract to you.
Several independent rating agencies regularly evaluate life insurers'
claims-paying ability, quality of investments, and overall stability. A.M. Best
Company assigns A+ (Superior) to Allstate Life which automatically reinsures all
net business of Northbrook. A.M. Best Company also assigns Northbrook the rating
of A+(r) because Northbrook automatically reinsures all net business with
Allstate Life. Standard & Poor's Insurance Rating Services assigns an AA+ (Very
Strong) financial strength rating and Moody's assigns an Aa2 (Excellent)
financial strength rating to Northbrook. Northbrook shares the same ratings of
its parent, Allstate Life. These ratings do not reflect the investment
performance of the Variable Account. We may from time to time advertise these
ratings in our sales literature.
THE VARIABLE ACCOUNT
Northbrook established the Northbrook Variable Annuity Account II on May 8,
1990. We have registered the Variable Account with the SEC as a unit investment
trust. The SEC does not supervise the management of the Variable Account or
Northbrook.
We own the assets of the Variable Account. The Variable Account is a segregated
asset account under Arizona insurance law. That means we account for the
Variable Account's income, gains, and losses separately from the results of our
other operations. It also means that only the assets of the Variable Account
that are in excess of the reserves and other Contract liabilities with respect
to the Variable Account are subject to liabilities relating to our other
operations. Our obligations arising under the Contracts are general corporate
obligations of Northbrook.
The Variable Account consists of 21 Variable Sub-Accounts, each of which invests
in a corresponding Portfolio. We may add new Variable Sub-Accounts or eliminate
one or more of them, if we believe marketing, tax, or investment conditions so
warrant. We do not guarantee the investment performance of the Variable Account,
its Sub-Accounts or the Portfolios. We may use the Variable Account to fund our
other annuity contracts. We will account separately for each type of annuity
contract funded by the Variable Account.
THE PORTFOLIOS
Dividends and Capital Gain Distributions. We automatically reinvest all
dividends and capital gains distributions from the Portfolios in shares of the
distributing Portfolio at their net asset value.
Voting Privileges. As a general matter, you do not have a direct right to vote
the shares of the Portfolios held by the Variable Sub-Accounts to which you have
allocated your Contract Value. Under current law, however, you are entitled to
give us instructions on how to vote those shares on certain matters. Based on
our present view of the law, we will vote the shares of the Portfolios that we
hold directly or indirectly through the Variable Account in accordance with
instructions that we receive from Contract owners entitled to give such
instructions.
As a general rule, before the Payout Start Date, the Contract owner or anyone
with a voting interest is the person entitled to give voting instructions. The
number of shares that a person has a right to instruct will be determined by
dividing the Contract Value allocated to the applicable Variable Sub-Account by
the net asset value per share of the corresponding Portfolio as of the record
date of the meeting. After the Payout Start Date the person receiving income
payments has the voting interest. The payee's number of votes will be determined
by dividing the reserves for such Contract allocated to the applicable Variable
Sub-Account by the net asset value per share of the corresponding Portfolio as
of the record date of the meeting. The votes decrease as income payments are
made and as the reserves for the Contract decrease.
We will vote shares attributable to Contracts for which we have not received
instructions, as well as shares attributable to us, in the same proportion as we
vote shares for which we have received instructions, unless we determine that we
may vote such shares in our own discretion. We will apply voting instructions to
abstain on any item to be voted upon on a pro rata basis to reduce the votes
eligible to be cast.
We reserve the right to vote Portfolio shares as we see fit without regard to
voting instructions to the extent permitted by law. If we disregard voting
instructions, we will include a summary of that action and our reasons for that
action in the next semi-annual financial report we send to you.
Changes in Portfolios. We reserve the right, subject to any applicable law, to
make additions to, deletions from or substitutions for the Portfolio shares held
by any Variable Sub-Account. If the shares of any of the Portfolios are no
longer available for investment by the Variable Account or if, in our judgment,
further investment in such shares is no longer desirable in view of the purposes
of the Contract, we may eliminate that Portfolio and substitute shares of
another eligible investment fund. Any substitution of securities will comply
with the requirements of the Investment Company Act of 1940. We also may add new
Variable Sub-Accounts that invest in additional mutual funds. We will notify you
in advance of any change.
Conflicts of Interest. Certain of the Portfolios sell their shares to separate
accounts underlying both variable life insurance and variable annuity contracts.
It is conceivable that in the future it may be unfavorable for variable life
insurance separate accounts and variable annuity separate accounts to invest in
the same Portfolio. The boards of directors or trustees of these Portfolios
monitor for possible conflicts among separate accounts buying shares of the
Portfolios. Conflicts could develop for a variety of reasons. For example,
differences in treatment under tax and other laws or the failure by a separate
account to comply with such laws could cause a conflict. To eliminate a
conflict, a Portfolio's board of directors or trustees may require a separate
account to withdraw its participation in a Portfolio. A Portfolio's net asset
value could decrease if it had to sell investment securities to pay redemption
proceeds to a separate account withdrawing because of a conflict.
THE CONTRACT
The Contracts are distributed exclusively by their principal underwriter, Dean
Witter Reynolds Inc. ("Dean Witter"). Dean Witter, a wholly owned subsidiary of
Morgan Stanley Dean Witter & Co., is located at Two World Trade Center, New
York, New York 10048. Dean Witter is a member of the New York Stock Exchange and
the National Association of Securities Dealers.
Administration. We have primary responsibility for all administration of the
Contracts and the Variable Account. We provide the following administrative
services, among others:
o issuance of the Contracts;
o maintenance of Contract owner records;
o Contract owner services;
o calculation of unit values;
o maintenance of the Variable Account; and
o preparation of Contract owner reports.
We will send you Contract statements at least annually prior to the Payout Start
Date. You should notify us promptly in writing of any address change. You should
read your statements and confirmations carefully and verify their accuracy. You
should contact us promptly if you have a question about a periodic statement. We
will investigate all complaints and make any necessary adjustments
retroactively, but you must notify us of a potential error within a reasonable
time after the date of the questioned statement. If you wait too long, we will
make the adjustment as of the date that we receive notice of the potential
error.
We also will provide you with additional periodic and other reports, information
and prospectuses as may be required by federal securities laws.
QUALIFIED PLANS
If you use the Contract with a qualified plan, the plan may impose different or
additional conditions or limitations on withdrawals, death benefits, Payout
Start Dates, income payments, and other Contract features. In addition, adverse
tax consequences may result if qualified plan limits on distributions and other
conditions are not met. Please consult your qualified plan administrator for
more information.
LEGAL MATTERS
Freedman, Levy, Kroll & Simonds, Washington, D.C., has advised Northbrook on
certain federal securities law matters. All matters of state law pertaining to
the Contracts, including the validity of the Contracts and Northbrook's right to
issue such Contracts under state insurance law, have been passed upon by Michael
J. Velotta, General Counsel of Northbrook.
YEAR 2000
Northbrook is heavily dependent upon complex computer systems for all phases of
its operations, including customer service, and policy and contract
administration. Since many of Northbrook'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 or replaced ("Year 2000 Issue"). Northbrook believes that many of
its counterparties and suppliers also have Year 2000 Issues which could affect
Northbrook. In 1995, Allstate Insurance Company 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 Northbrook actively working with its major external counterparties
and suppliers to assess their compliance efforts and Northbrook's exposure to
them. Northbrook 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. Year 2000 costs are and will be
expensed as incurred.
<PAGE>
TAXES
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The following discussion is general and is not intended as tax advice.
Northbrook 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 your individual circumstances.
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, you are not taxed on increases in the Contract Value
until a distribution occurs. This rule applies only where:
1) the Contract owner is a natural person,
2) the investments of the Variable Account are "adequately diversified"
according to Treasury Department regulations, and
3) Northbrook 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 non-natural
persons such as corporations, trusts, or other entities are not treated as
annuity contracts for federal income tax purposes. The income on such contracts
is taxed as ordinary income received or accrued by the owner during the taxable
year. Please see the Statement of Additional Information for a discussion of
several exceptions to the general rule for Contracts owned by non-natural
persons.
Diversification Requirements. For a Contract to be treated as an annuity for
federal income tax purposes, the investments in the Variable Account must be
"adequately diversified" consistent with standards under Treasury Department
regulations. If the investments in the Variable Account are not adequately
diversified, the Contract will not be treated as an annuity contract for federal
income tax purposes. As a result, the income on the Contract will be taxed as
ordinary income received or accrued by the Contract owner during the taxable
year. Although Northbrook does not have control over the Portfolios or their
investments, we expect the Portfolios to meet the diversification requirements.
Ownership Treatment. The IRS has stated that you will be considered the owner of
Variable Account assets if you possess incidents of ownership in those assets,
such as the ability to exercise investment control over the assets. At the time
the diversification regulations were issued, the Treasury Department announced
that the regulations do not provide guidance concerning circumstances in which
investor control of separate account investments may cause an investor to be
treated as the owner of the separate account. The Treasury Department also
stated that future guidance would be issued regarding the extent that owners
could direct sub-account investments without being treated as owners of the
underlying assets of the separate account.
Your rights under the Contract are different than those described by the IRS in
rulings in which it found that contract owners were not owners of separate
account assets. For example, you have the choice to allocate premiums and
Contract Values among more investment alternatives. Also, you may be able to
transfer among investment alternatives more frequently than in such rulings.
These differences could result in you being treated as the owner of the Variable
Account. If this occurs, income and gain from the Variable Account assets would
be includible in your gross income. Northbrook does not know what standards will
be set forth in any regulations or rulings which the Treasury Department may
issue. It is possible that future standards announced by the Treasury Department
could adversely affect the tax treatment of your Contract. We reserve the right
to modify the Contract as necessary to attempt to prevent you from being
considered the federal tax owner of the assets of the Variable Account. However,
we make no guarantee that such modification to the Contract will be successful.
Taxation of Partial and Full Withdrawals. If you make a partial withdrawal under
a non-Qualified Contract, amounts received are taxable to the extent the
Contract Value, without regard to surrender charges, exceeds the investment in
the Contract. The investment in the Contract is the gross premium paid for the
Contract minus any amounts previously received from the Contract if such amounts
were properly excluded from your gross income. If you make a partial withdrawal
under a Qualified Contract, the portion of the payment that bears the same ratio
to the total payment that the investment in the Contract (i.e., nondeductible
IRA contributions, after tax contributions to qualified plans) bears to the
Contract Value, is excluded from your income. If you make a full withdrawal
under a non-Qualified Contract or a Qualified Contract, the amount received will
be taxable only to the extent it exceeds the investment in the Contract.
"Nonqualified distributions" from Roth IRAs are treated as made from
contributions first and are included in gross income only to the extent that
distributions exceed contributions. "Qualified distributions" from Roth IRAs are
not included in gross income. "Qualified distributions" are any distributions
made more than 5 taxable years after the taxable year of the first contribution
to any Roth IRA and which are:
o made on or after the date the individual attains age 59 1/2,
o made to a Beneficiary after the Contract owner's death,
o attributable to the Contract owner being disabled, or
o for a first time home purchase (first time home purchases are subject to a
lifetime limit of $10,000).
If you transfer a non-Qualified Contract without full and adequate consideration
to a person other than your spouse (or to a former spouse incident to a
divorce), you will be taxed on the difference between the Contract Value and the
investment in the Contract at the time of transfer. Except for certain Qualified
Contracts, any amount you receive as a loan under a Contract, and any assignment
or pledge (or agreement to assign or pledge) of the Contract Value is treated as
a withdrawal of such amount or portion.
Taxation of Annuity Payments. Generally, the rule for income taxation of annuity
payments received from a non-Qualified Contract provides for the return of your
investment in the Contract in equal tax-free amounts over the payment period.
The balance of each payment received is taxable. For fixed annuity payments, the
amount excluded from income is determined by multiplying the payment by the
ratio of the investment in the Contract (adjusted for any refund feature or
period certain) to the total expected value of annuity payments for the term of
the Contract. If you elect variable annuity payments, the amount excluded from
taxable income is determined by dividing the investment in the Contract by the
total number of expected payments. The annuity payments will be fully taxable
after the total amount of the investment in the Contract is excluded using these
ratios. If you die, and annuity payments cease before the total amount of the
investment in the Contract is recovered, the unrecovered amount will be allowed
as a deduction for your last taxable year.
Taxation of Annuity Death Benefits. Death of a Contract owner, or death of the
Annuitant if the Contract is owned by a non-natural person, will cause a
distribution of death benefits from a Contract. Generally, such amounts are
included in income as follows:
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. Please see the Statement of
Additional Information for more detail on distribution at death
requirements.
Penalty Tax on Premature Distributions. A 10% penalty tax applies to the taxable
amount of any premature distribution from a non-Qualified Contract. The penalty
tax generally applies to any distribution made prior to the date you attain age
59 1/2. However, no penalty tax is incurred on distributions:
1) made on or after the date the Contract owner attains age 59 1/2;
2) made as a result of the Contract owner's death or disability;
3) made in substantially equal periodic payments over the Contract
owner's life or life expectancy,
4) made under an immediate annuity, or
5) attributable to investment in the Contract before August 14, 1982.
You should consult a competent tax advisor to determine if any other exceptions
to the penalty apply to your situation. Similar exceptions may apply to
distributions from Qualified Contracts.
Aggregation of Annuity Contracts. All non-qualified deferred annuity contracts
issued by Northbrook (or its affiliates) to the same Contract 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
Contracts may be used as investments with certain qualified plans such as:
o Individual Retirement Annuities or Accounts (IRAs) under Section 408 of the
Internal Revenue Code ("Code");
o Roth IRAs under Section 408A of the Code;
o Simplified Employee Pension Plans under Section 408(k) of the Code;
o Savings Incentive Match Plans for Employees (SIMPLE) Plans under Section
408(p) of the Code;
o Tax Sheltered Annuities under Section 403(b) of the Code;
o Corporate and Self Employed Pension and Profit Sharing Plans; and
o State and Local Government and Tax-Exempt Organization Deferred
Compensation Plans.
Northbrook reserves the right to limit the availability of the Contract for use
with any of the qualified plans listed above.
In the case of certain qualified plans, the terms of the plans may govern the
right to benefits, regardless of the terms of the Contract.
Restrictions Under Section 403(b) Plans. Section 403(b) of the Code provides
tax-deferred retirement savings plans for employees of certain non-profit and
educational organizations. Under Section 403(b), any Contract used for a 403(b)
plan must provide that distributions attributable to salary reduction
contributions made after December 31, 1988, and all earnings on salary reduction
contributions, may be made only:
1) on or after the date of employee
o attains age 59 1/2,
o separates from service,
o dies,
o becomes disabled, or
2) on account of hardship (earnings on salary reduction contributions may
not be distributed on the account of hardship).
These limitations do not apply to withdrawals where Northbrook is directed to
transfer some or all of the Contract Value to another 403(b) plan.
Income Tax Withholding
Northbrook is required to withhold federal income tax at a rate of 20% on all
"eligible rollover distributions" unless you elect to make a "direct rollover"
of such amounts to an IRA or eligible retirement plan. Eligible rollover
distributions generally include all distributions from Qualified Contracts,
excluding IRAs, with the exception of:
1) required minimum distributions, or
2) a series of substantially equal periodic payments made over a period
of at least 10 years, or,
3) over the life (joint lives) of the participant (and beneficiary).
Northbrook may be required to withhold federal and state income taxes on any
distributions from non-Qualified Contracts or Qualified Contracts that are not
eligible rollover distributions, unless you notify us of your election to not
have taxes withheld.
<PAGE>
PERFORMANCE INFORMATION
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We may advertise the performance of the Variable Sub-Accounts, including yield
and total return information. Yield refers to the income generated by an
investment in a Variable Sub-Account over a specified period. Total return
represents the change, over a specified period of time, in the value of an
investment in a Variable Sub-Account after reinvesting all income distributions.
All performance advertisements will include, as applicable, standardized yield
and total return figures that reflect the deduction of insurance charges.
Performance advertisements also may include aggregate, average, year-by-year, or
other types of total return figures.
Performance information for periods prior to the inception date of the Variable
Sub-Accounts will be based on the historical performance of the corresponding
Portfolios for the periods beginning with the inception dates of the Portfolios
and adjusted to reflect current Contract expenses. You should not interpret
these figures to reflect actual historical performance of the Variable Account.
We may include in advertising and sales materials tax deferred compounding
charts and other hypothetical illustrations that compare currently taxable and
tax deferred investment programs based on selected tax brackets. Our
advertisements also may compare the performance of our Variable Sub-Accounts
with: (a) certain unmanaged market indices, including but not limited to the Dow
Jones Industrial Average, the Standard & Poor's 500, and the Shearson Lehman
Bond Index; and/or (b) other management investment companies with investment
objectives similar to the underlying funds being compared. In addition, our
advertisements may include the performance ranking assigned by various
publications, including the Wall Street Journal, Forbes, Fortune, Money,
Barron's, Business Week, USA Today, and statistical services, including Lipper
Analytical Services Mutual Fund Survey, Lipper Annuity and Closed End Survey,
the Variable Annuity Research Data Survey, and SEI.
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
TABLE OF CONTENTS
Description Page
Additions, Deletions or Substitutions of Investments..................
The Contract..........................................................
Purchase of Contracts..........................................
Tax-free Exchanges (1035 Exchanges, Rollovers and
Transfers)...................................................
Performance Information...............................................
Calculation of Accumulation Unit Values...............................
Calculation of Variable Income Payments...............................
General Matters.......................................................
Incontestability.............................................
Settlements..................................................
Safekeeping of the Variable Account's Assets.................
Premium Taxes................................................
Tax Reserves.................................................
Federal Tax Matters...................................................
Qualified Plans.......................................................
Experts...............................................................
Financial Statements..................................................
This prospectus does not constitute an offering in any jurisdiction in which
such offering may not lawfully be made. We do not authorize anyone to provide
any information or representations regarding the offering described in this
prospectus other than as contained in this prospectus.
[back cover]
<PAGE>
PREFERRED CLIENT VARIABLE ANNUITY
Northbrook Life and Annuity Company Statement of Additional Information
Northbrook Variable Annuity Account II dated __, 1999
Post Office Box 94040
Palatine, IL 60094-4040
1 (800) 654 - 2397
This Statement of Additional Information supplements the information in the
prospectus for the Preferred Client Variable Annuity Contracts that we offer.
This Statement of Additional Information is not a prospectus. You should read it
with the prospectus, dated __, 1999, for the Contract. You may obtain a
prospectus by calling or writing us at the address or telephone number listed
above, or by calling or writing your Morgan Stanley Dean Witter Financial
Advisor.
Except as otherwise noted, this Statement of Additional Information uses the
same defined terms as the prospectus for the Morgan Stanley Dean Witter Choice
Variable Annuity Contracts.
TABLE OF CONTENTS
Description Page
Additions, Deletions or Substitutions of Investments
The Contract
Purchase of Contracts
Tax-free Exchanges (1035 Exchanges, Rollovers and
Transfers)
Performance Information
Calculation of Accumulation Unit Values
Calculation of Variable Income Payments
General Matters
Incontestability
Settlements
Safekeeping of the Variable Account's Assets
Premium Taxes
Tax Reserves
Federal Tax Matters
Qualified Plans
Experts
Financial Statements
<PAGE>
ADDITIONS, DELETIONS OR SUBSTITUTIONS OF INVESTMENTS
- ------------------------------------------------------------------------------
We may add, delete, or substitute the Portfolio shares held by any Variable
Sub-Account to the extent the law permits. We may substitute shares of any
Portfolio with those of another Portfolio of the same or different mutual
Portfolio if the shares of the Portfolio are no longer available for investment,
or if we believe investment in any Portfolio would become inappropriate in view
of the purposes of the Variable Account.
We will not substitute shares attributable to a Contract owner's interest in a
Variable Sub-Account until we have notified the Contract owner of the change,
and until the Securities and Exchange Commission has approved the change, to the
extent such notification and approval are required by law. 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 Contract owners.
We also may establish additional Variable Sub-Accounts or series of Variable
Sub-Accounts. Each additional Variable Sub-Account would purchase shares in a
new Portfolio of the same or different mutual fund. We may establish new
Variable Sub-Accounts when we believe marketing needs or investment conditions
warrant. We determine the basis on which we will offer any new Variable
Sub-Accounts in conjunction with the Contract to existing Contract owners. We
may eliminate one or more Variable Sub-Accounts if, in our sole discretion,
marketing, tax or investment conditions so warrant.
We may, by appropriate endorsement, change the Contract as we believe necessary
or appropriate to reflect any substitution or change in the Portfolios. If we
believe the best interests of persons having voting rights under the Contracts
would be served, we may operate the Variable Account as a management company
under the Investment Company Act of 1940 or we may withdraw its registration
under such Act if such registration is no longer required.
<PAGE>
THE CONTRACT
- ------------------------------------------------------------------------------
The Contract is primarily designed to aid individuals in long-term financial
planning. You can use it for retirement planning regardless of whether the
retirement plan qualifies for special federal income tax treatment.
PURCHASE OF CONTRACTS
Dean Witter Reynolds Inc., is the principal underwriter and distributor of the
Contracts. The offering of the Contracts is continuous. We do not anticipate
discontinuing the offering of the Contracts, but we reserve the right to do so
at any time.
TAX-FREE EXCHANGES (1035 EXCHANGES, ROLLOVERS AND TRANSFERS)
We accept purchase payments that are the proceeds of a Contract in a transaction
qualifying for a tax-free exchange under Section 1035 of the Internal Revenue
Code ("Code"). Except as required by federal law in calculating the basis of the
Contract, we do not differentiate between Section 1035 purchase payments and
non-Section 1035 purchase payments.
We also accept "rollovers" and transfers from Contracts qualifying as
tax-sheltered annuities ("TSAs"), individual retirement annuities or accounts
("IRAs"), or any other Qualified Contract that is eligible to "rollover" into an
IRA. We differentiate among non-Qualified Contracts, TSAs, IRAs and other
Qualified Contracts to the extent necessary to comply with federal tax laws. For
example, we restrict the assignment, transfer, or pledge of TSAs and IRAs so the
Contracts will continue to qualify for special tax treatment. A Contract owner
contemplating any such exchange, rollover or transfer of a Contract should
contact a competent tax adviser with respect to the potential effects of such a
transaction.
<PAGE>
PERFORMANCE INFORMATION
- ------------------------------------------------------------------------------
From time to time we may advertise the "standardized," "non-standardized," and
"adjusted historical" total returns of the Variable Sub-Accounts, as described
below. Please remember that past performance is not an estimate or guarantee of
future performance and does not necessarily represent the actual experience of
amounts invested by a particular Contract owner.
STANDARDIZED TOTAL RETURNS
A Variable Sub-Account's standardized total return represents the average annual
total return of that Sub-Account over a particular period. We compute
standardized total return by finding the annual percentage rate that, when
compounded annually, will accumulate a hypothetical $1,000 purchase payment to
the redeemable value at the end of the one, five or ten year period, or for a
period from the date of commencement of the Variable Sub-Account's operations,
if shorter than any of the foregoing. We use the following formula prescribed by
the SEC for computing standardized total return:
1000(1 + T)n = ERV
where:
T = average annual total return
ERV = ending redeemable value of a hypothetical $1,000 payment
made at the beginning of 1, 5, or 10 year periods or
shorter period
n = number of years in the period
1000 = hypothetical $1,000 investment
The standardized total returns for the Variable Sub-Accounts available under the
Contract for the periods ended December 31, 1998 are set out below. No
standardized total returns are shown for Money Market Variable Sub-Account.
The Preferred Client Variable Annuity Contracts were first offered to the public
as of the date of this Statement of Additional Information. Accordingly,
performance figures for Variable Sub-Accounts prior to those dates reflect the
historical performance of the Variable Sub-Accounts, adjusted to reflect the
current level of charges that apply to the Variable Sub-Accounts under the
Preferred Client Contracts.
Variable Sub-Account Inception Dates: The Money Market, Quality Income Plus,
High Yield, Utilities, Dividend Growth, Equity and Strategist Variable
Sub-Accounts commenced operations on October 25, 1990. The Capital Growth and
European Growth Variable Sub-Accounts commenced operations on March 1, 1991. The
Global Dividend Growth and Pacific Growth Variable Sub-Accounts commenced
operations on February 23, 1994. The Income Builder Variable Sub-Account
commenced operation on January 21, 1997. The Equity Growth, International
Magnum, Emerging Markets Equity, and Emerging Growth Variable Sub-Accounts
commenced operation on March 16, 1998. The S&P 500 Index, Competitive Edge
("Best Ideas") and U.S. Real Estate Variable Sub-Accounts commenced operations
of May 18, 1998. The Short-Term Bond and Aggressive Equity Sub-Accounts
commenced operation on May 2, 1999.
(WITHOUT AN OPTIONAL DEATH BENEFIT PROVISION OR
PERFORMANCE INCOME BENEFIT OPTION)
10 Years or
Variable Sub-Account One Year Five Years Since Inception
---------------------------------------------
Money Market 4.11% 21.83% 53.96%
High Yield -6.85% 52.23% 82.72%
Equity 28.69% 159.80% 480.12%
Quality Income Plus -0.86% 36.64% 104.93%
Strategist 16.73% 74.57% 205.97%
Dividend Growth 12.85% 132.03% 323.10%
Utilities 18.59% 75.09% 230.75%
European Growth -0.03% 212.09% 266.46%
Capital Growth 10.68% 116.24% 168.50%
Pacific Growth 49.42% N/A -28.13%
Global Dividend Growth 12.32% N/A 92.69%
Income Builder 6.45% N/A 35.34%
Equity Growth 18.12% N/A 79.94%
International Magnum -3.27% N/A 21.33%
Emerging Markets Equity 22.26% N/A 0.26%
Emerging Growth 36.38% N/A 168.40%
U.S. Real Estate -1.57% N/A 9.62%
Competitive Edge ("Best Ideas") 4.94% N/A 3.39%
S&P 500 Index 20.87% N/A 24.03%
Short-Term Bond N/A N/A -0.38%
Aggressive Equity N/A N/A 2.15%
<PAGE>
(WITH PERFORMANCE DEATH BENEFIT OPTION OR
PERFORMANCE INCOME BENEFIT OPTION )
10 Years or
Variable Sub-Account One Year Five Years Since Inception
------------------------------------------------
Money Market 3.98% 23.30% 51.97%
High Yield -6.97% 30.76% 80.36%
Equity 28.53% 239.20% 472.63%
Quality Income Plus -0.99% 40.69% 102.29%
Strategist 16.57% 93.87% 202.02%
Dividend Growth 12.70% 161.72% 318.36%
Utilities 18.43% 130.05% 227.04%
European Growth -0.16% 148.69% 262.51%
Capital Growth 10.53% 136.34% 165.61%
Pacific Growth 49.23% -23.69% -28.63%
Global Dividend Growth 12.18% 91.31% 91.36%
Income Builder 6.32% N/A 34.92%
Equity Growth 17.96% N/A 79.36%
International Magnum -3.40% N/A 20.94%
Emerging Markets Equity 22.10% N/A -0.09%
Emerging Growth 36.20% N/A 167.01%
U.S. Real Estate -1.70% N/A 9.29%
Competitive Edge ("Best 4.81% N/A 3.24%
Ideas")
S&P 500 Index 20.71% N/A 23.85%
Short-Term Bond N/A N/A -0.40%
Aggressive Equity N/A N/A 2.13%
<PAGE>
(WITH PERFORMANCE BENEFIT COMBINATION OPTION OR
DEATH BENEFIT COMBINATION OPTION)
10 Years or
Variable Sub-Account One Year Five Years Since Inception
-----------------------------------------------------
Money Market 3.86% 22.63% 50.31%
High Yield -7.08% 30.04% 78.39%
Equity 28.39% 237.34% 466.37%
Quality Income Plus -1.10% 39.92% 100.08%
Strategist 16.45% 92.81% 198.72%
Dividend Growth 12.58% 160.28% 314.39%
Utilities 18.30% 128.79% 223.94%
European Growth -0.27% 147.33% 259.21%
Capital Growth -0.27% 147.33% 259.21%
Pacific Growth 49.06% -24.11% -29.05%
Global Dividend Growth 12.05% 90.26% 90.24%
Income Builder 6.20% N/A 34.56%
Equity Growth 17.83% N/A 78.87%
International Magnum -3.50% N/A 20.61%
Emerging Markets Equity 21.97% N/A -0.39%
Emerging Growth 36.05% N/A 165.84%
U.S. Real Estate -1.80% N/A 9.01%
Competitive Edge ("Best 4.69% N/A 3.11%
Ideas")
S&P 500 Index 20.58% N/A 23.70%
Short-Term Bond N/A N/A -0.42%
Aggressive Equity N/A N/A 2.11%
<PAGE>
NON-STANDARDIZED TOTAL RETURNS
From time to time, we 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. The formula for computing such total return quotations involves a per
unit change calculation. This calculation is based on 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 are "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"; " 'n' most recent
Calendar Years"; and "Inception (commencement of the Variable Sub-Account's
operation) to date" (day of the advertisement).
ADJUSTED HISTORICAL TOTAL RETURNS
We may advertise the total return for periods prior to the date that the
Variable Sub-Accounts commenced operations. We will calculate such "adjusted
historical total returns" using the historical performance of the underlying
Portfolios and adjusting such performance to reflect the current level of
charges that apply to the Variable Sub-Accounts under the Contract.
The adjusted historical total returns for the Variable Sub-Accounts for the
periods ended December 31, 1998 are set out below. No adjusted historical total
returns are shown for the Money Market Variable Sub-Account.
The following list provides the inception date for the Portfolio corresponding
to each of the Variable Sub-Accounts included in the tables.
Inception Date of
Corresponding
Variable Sub-Account Portfolio
High Yield March 9, 1984
Equity March 9, 1984
Quality Income Plus March 1, 1987
Strategist March 1, 1987
Dividend Growth March 1, 1990
Utilities March 1, 1990
European Growth March 1, 1991
Capital Growth March 1, 1991
Pacific Growth February 24, 1994
Global Dividend Growth February 24, 1994
Income Builder January 21, 1997
Equity Growth January 2, 1997
International Magnum January 2, 1997
Emerging Markets Equity October 1,1996
Emerging Growth July 3, 1995
U.S. Real Estate March 4, 1997
Competitive Edge ("Best May 18, 1998
Ideas")
S&P 500 Index May 18, 1998
Short-Term Bond May 2, 1999
Aggressive Equity May 2, 1999
(WITHOUT AN OPTIONAL DEATH BENEFIT PROVISION OR
PERFORMANCE INCOME BENEFIT OPTION )
10 Years or
Variable Sub-Account One Year Five Years Since Inception
-----------------------------------------------------
Money Market 4.11% 26.84% 53.96%
High Yield -6.85% 41.79% 82.72%
Equity 28.69% 234.35% 480.12%
Quality Income Plus -0.86% 35.47% 104.93%
Strategist 16.73% 103.77% 205.97%
Dividend Growth 12.85% 161.84% 250.95%
Utilities 18.59% 107.64% 227.85%
European Growth -0.03% 212.01% 266.46%
Capital Growth 10.68% 139.33% 168.50%
Pacific Growth 49.42% N/A -28.13%
Global Dividend Growth 12.32% N/A 92.69%
Income Builder 6.45% N/A 35.34%
Equity Growth 18.12% N/A 79.94%
International Magnum -3.27% N/A 21.33%
Emerging Markets Equity 22.26% N/A 0.26%
Emerging Growth 36.38% N/A 168.40%
U.S. Real Estate -1.57% N/A 9.62%
Competitive Edge ("Best 4.94% N/A 3.39%
Ideas")
S&P 500 Index 20.87% N/A 24.03%
Short-Term Bond N/A N/A -0.38%
Aggressive Equity N/A N/A 2.15%
<PAGE>
(WITH PERFORMANCE DEATH BENEFIT OPTION OR
PERFORMANCE INCOME BENEFIT OPTION)
10 Years or
Variable Sub-Account One Year Five Years Since Inception
-----------------------------------------------------
Money Market 3.98% 23.30% 51.97%
High Yield -6.97% 30.76% 80.36%
Equity 28.53% 239.20% 472.63%
Quality Income Plus -0.99% 40.69% 102.29%
Strategist 16.57% 93.87% 202.02%
Dividend Growth 12.70% 161.72% 245.72%
Utilities 18.43% 130.05% 223.90%
European Growth -0.16% 148.69% 262.51%
Capital Growth 10.53% 136.34% 165.61%
Pacific Growth 49.23% -23.69% -28.63%
Global Dividend Growth 12.18% 91.31% 91.36%
Income Builder 6.32% N/A 34.92%
Equity Growth 17.96% N/A 79.36%
International Magnum -3.40% N/A 20.94%
Emerging Markets Equity 22.10% N/A -0.09%
Emerging Growth 36.20% N/A 167.01%
U.S. Real Estate -1.70% N/A 9.29%
Competitive Edge ("Best 4.81% N/A 3.24%
Ideas")
S&P 500 Index 20.71% N/A 23.85%
Short-Term Bond N/A N/A -0.40%
Aggressive Equity N/A N/A 2.13%
<PAGE>
(WITH PERFORMANCE BENEFIT COMBINATION OPTION OR
DEATH BENEFIT COMBINATION OPTION)
10 Years or
Variable Sub-Account One Year Five Years Since Inception
----------------------------------------------------
Money Market 3.86% 22.63% 50.31%
High Yield -7.08% 30.04% 78.39%
Equity 28.39% 237.34% 466.37%
Quality Income Plus -1.10% 39.92% 100.08%
Strategist 16.45% 92.81% 198.72%
Dividend Growth 12.58% 160.28% 243.19%
Utilities 18.30% 128.79% 220.60%
European Growth -0.27% 147.33% 259.21%
Capital Growth -0.27% 147.33% 259.21%
Pacific Growth 49.06% -24.11% -29.05%
Global Dividend Growth 12.05% 90.26% 90.24%
Income Builder 6.20% N/A 34.56%
Equity Growth 17.83% N/A 78.87%
International Magnum -3.50% N/A 20.61%
Emerging Markets Equity 21.97% N/A -0.39%
Emerging Growth 36.05% N/A 165.84%
U.S. Real Estate -1.80% N/A 9.01%
Competitive Edge ("Best 4.69% N/A 3.11%
Ideas")
S&P 500 Index 20.58% N/A 23.70%
Short-Term Bond N/A N/A -0.42%
Aggressive Equity N/A N/A 2.11%
<PAGE>
Calculation of Accumulation Unit Values
- ------------------------------------------------------------------------------
The value of Accumulation Units will change each Valuation Period according to
the investment performance of the Portfolio shares purchased by each Variable
Sub-Account and the deduction of certain expenses and charges. A "Valuation
Period" is the period from the end of one Valuation Date and continues to the
end of the next Valuation Date. A Valuation Date ends at the close of regular
trading on the New York Stock Exchange (currently 3:00 p.m. Central Time).
The Accumulation Unit Value of a Variable Sub-Account for any Valuation Period
equals the Accumulation Unit Value as of the immediately preceding Valuation
Period, multiplied by the Net Investment Factor (described below) for that
Variable Sub-Account for the current Valuation Period.
NET INVESTMENT FACTOR
The Net Investment Factor for a Valuation Period is a number representing the
change, since the last Valuation Period, in the value of Variable Sub-Account
assets per Accumulation Unit due to investment income, realized or unrealized
capital gain or loss, deductions for taxes, if any, and deductions for the
mortality and expense risk charge and administrative expense charge. We
determine the Net Investment Factor for each Variable Sub-Account for any
Valuation Period by dividing (A) by (B) and subtracting (C) from the result,
where:
(A) is the sum of:
(1) the net asset value per share of the Portfolio underlying the
Variable 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 underlying the Variable
Sub-Account during the current Valuation Period;
(B) is the net asset value per share of the Portfolio underlying the
Variable Sub-Account determined as of the end of the immediately
preceding Valuation Period; and
(C) is the annualized mortality and expense risk and administrative
expense charges divided by the number of days in the current calendar
year and then multiplied by the number of calendar days in the current
Valuation Period.
<PAGE>
CALCULATION OF VARIABLE INCOME PAYMENTS
- ------------------------------------------------------------------------------
We calculate the amount of the first variable income payment under an Income
Plan by applying the Contract Value allocated to each Variable Sub-Account less
any applicable premium tax charge deducted at the time, to the income payment
tables in the Contract. We divide the amount of the first variable annuity
income payment by the Variable Sub-Account's then current Annuity Unit value to
determine the number of annuity units ("Annuity Units") upon which later income
payments will be based. To determine income payments after the first, we simply
multiply the number of Annuity Units determined in this manner for each Variable
Sub-Account by the then current Annuity Unit value ("Annuity Unit Value") for
that Variable Sub-Account.
CALCULATION OF ANNUITY UNIT VALUES
Annuity Units in each Variable Sub-Account are valued separately and Annuity
Unit Values will depend upon the investment experience of the particular
Portfolio in which the Variable Sub-Account invests. We calculate the Annuity
Unit Value for each Variable Sub-Account at the end of any Valuation Period by:
o multiplying the Annuity Unit Value at the end of the immediately preceding
Valuation Period by the Variable Sub-Account's Net Investment Factor
(described in the preceding section) for the Period; and then
o dividing the product by the sum of 1.0 plus the assumed investment rate for
the Valuation Period.
The assumed investment rate adjusts for the interest rate assumed in the
income payment tables used to determine the dollar amount of the first variable
income payment, and is at an effective annual rate which is disclosed in the
Contract.
We determine the amount of the first variable income payment paid under an
Income Plan using the income payment tables set out in the Contracts. The
Contracts include tables that differentiate on the basis of sex, except in
states that require the use of unisex tables.
<PAGE>
GENERAL MATTERS
- ------------------------------------------------------------------------------
INCONTESTABILITY
We will not contest the Contract after we issue it.
SETTLEMENTS
The Contract must be returned to us prior to any settlement. We must receive due
proof of the Contract owner(s) death (or Annuitant's death if there is a
non-natural Contract owner) before we will settle a death claim.
SAFEKEEPING OF THE VARIABLE ACCOUNT'S ASSETS
We hold title to the assets of the Variable Account. We keep the assets
physically segregated and separate and apart from our general corporate assets.
We maintain records of all purchases and redemptions of the Portfolio shares
held by each of the Variable Sub-Accounts.
The Portfolios do not issue stock certificates. Therefore, we hold the Variable
Account's assets in open account in lieu of stock certificates. See the
Portfolios' prospectuses for a more complete description of the custodian of the
Portfolios.
PREMIUM TAXES
Applicable premium tax rates depend on the Contract owner's state of residency
and the insurance laws and our status in those states where premium taxes are
incurred. Premium tax rates may be changed by legislation, administrative
interpretations, or judicial acts.
TAX RESERVES
We do not establish capital gains tax reserves for any Variable Sub-Account nor
do we deduct charges for tax reserves because we believe that capital gains
attributable to the Variable Account will not be taxable. However, we reserve
the right to deduct charges to establish tax reserves for potential taxes on
realized or unrealized capital gains.
<PAGE>
FEDERAL TAX MATTERS
- ------------------------------------------------------------------------------
THE FOLLOWING DISCUSSION IS GENERAL AND IS NOT INTENDED AS TAX ADVICE. WE MAKE
NO GUARANTEE REGARDING THE TAX TREATMENT OF ANY CONTRACT OR TRANSACTION
INVOLVING A CONTRACT.
Federal, state, local and other tax consequences of ownership or receipt of
distributions under an annuity contract depend on 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
Northbrook is taxed as a life insurance company under Part I of Subchapter L of
the Internal Revenue Code. Since the Variable Account is not an entity separate
from Northbrook, and its operations form a part of Northbrook, it will not be
taxed separately as a "Regulated Investment Company" under Subchapter M of the
Code. Investment income and realized capital gains of the Variable Account are
automatically applied to increase reserves under the contract. Under existing
federal income tax law, Northbrook believes that the Variable Account investment
income and capital gains will not be taxed to the extent that such income and
gains are applied to increase the reserves under the contract. Accordingly,
Northbrook does not anticipate that it will incur any federal income tax
liability attributable to the Variable Account, and therefore Northbrook does
not intend to make provisions for any such taxes. If Northbrook is taxed on
investment income or capital gains of the Variable Account, then Northbrook may
impose a charge against the Variable Account in order to make provision for such
taxes.
EXCEPTIONS TO THE NON-NATURAL OWNER RULE
There are several exceptions to the general rule that annuity 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 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.
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.
<PAGE>
QUALIFIED PLANS
- ------------------------------------------------------------------------------
The Contract may be used with several types of qualified plans. Northbrook
reserves the right to limit the availability of the contract for use with any of
the qualified plans listed below. 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. Contract 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.
IRAs
Section 408 of the Code permits eligible individuals to contribute to an
individual retirement program known as an IRA. IRAs are subject to limitations
on the amount that can be contributed and on the time when distributions may
commence. Certain distributions from other types of qualified plans may be
"rolled over" on a tax-deferred basis into an IRA. An IRA generally may not
provide life insurance, but it may provide a death benefit that equals the
greater of the premiums paid and the Contract's Cash Value. The Contract
provides a death benefit that in certain circumstances may exceed the greater of
the payments and the Contract Value. It is possible that the death benefit could
be viewed as violating the prohibition on investment in life insurance contracts
with the result that the Contract would not be viewed as satisfying the
requirements of an IRA.
ROTH IRAs
Section 408A of the Code permits eligible individuals to make nondeductible
contributions to an individual retirement program known as a Roth IRA. Roth IRAs
are subject to limitations on the amount that can be contributed and on the time
when distributions may commence. "Qualified distributions" from Roth IRAs are
not includible in gross income. "Qualified distributions" are any distributions
made more than five taxable years after the taxable year of the first
contribution to the Roth IRA, and which are made on or after the date the
individual attains age 59 1/2, made to a beneficiary after the owner's death,
attributable to the owner being disabled or for a first time home purchase
(first time home purchases are subject to a lifetime limit of $10,000).
"Nonqualified distributions" are treated as made from contributions first and
are includible in gross income to the extent such distributions exceed the
contributions made to the Roth IRA. The taxable portion of a "nonqualified
distribution" may be subject to the 10% penalty tax on premature distributions.
Subject to certain limitations, a traditional Individual Retirement Account or
Annuity may be converted or "rolled over" to a Roth IRA. The taxable portion of
a conversion or rollover distribution is includible in gross income, but is
exempted from the 10% penalty tax on premature distributions.
SIMPLIFIED EMPLOYEE PENSION PLANS
Section 408(k) of the Code allows employers to establish simplified employee
pension plans for their employees using the employees' IRAs 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. Employers intending to use the Contract in connection with
such plans should seek competent advice. In particular, employers should
consider that an IRA generally may not provide life insurance, but it may
provide a death benefit that equals the greater of the premiums paid and the
contract's cash value. The Contract provides a death benefit that in certain
circumstances may exceed the greater of the payments and the Contract Value.
SAVINGS INCENTIVE MATCH PLANS FOR EMPLOYEES (SIMPLE PLANS)
Sections 408(p) and 401(k) of the Code allow employers with 100 or fewer
employees to establish SIMPLE retirement plans for their employees. SIMPLE plans
may be structured as a SIMPLE retirement account using an employee's IRA to hold
the assets or as a Section 401(k) qualified cash or deferred arrangement. In
general, a SIMPLE plan consists of a salary deferral program for eligible
employees and matching or nonelective contributions made by employers. Employers
intending to use the Contract in conjunction with SIMPLE plans should seek
competent tax and legal advice.
TAX SHELTERED ANNUITIES
Section 403(b) of the 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
on or after the date 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 for hardship). These limitations
do not apply to withdrawals where Northbrook is directed to transfer some or all
of the Contract Value to another 403(b) plan.
CORPORATE AND SELF-EMPLOYED PENSION AND PROFIT SHARING PLANS
Sections 401(a) and 403(a) of the 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. To the extent the Contracts are used in connection with an
eligible plan, employees are considered general creditors of the employer and
the employer as owner of the contract has the sole right to the proceeds of the
contract. Generally, under the non-natural owner rules, such Contracts are not
treated as annuity contracts for federal income tax purposes. Under these plans,
contributions made for the benefit of the employees will not be includible in
the employees' gross income until distributed from the plan. However, under a
Section 457 plan all the compensation deferred under the plan must remain solely
the property of the employer, subject only to the claims of the employer's
general creditors, until such time as made available to the employee or a
beneficiary.
<PAGE>
EXPERTS
- ------------------------------------------------------------------------------
The financial statements of Northbrook Life Insurance Company as of December 31,
1998 and 1997 and for each of the three years in the period ended December 31,
1998 and the financial statements of Northbrook Variable annuity Account II as
of December 31, 1998 and for the periods denoted in the table of contents to the
financial statements appearing in this Statement of Additional Information
(which is incorporated by reference in the prospectus of Northbrook Variable
Annuity Account II of Northbrook Life Insurance Company) have been audited by
Deloitte & Touche LLP, 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.
<PAGE>
FINANCIAL STATEMENTS
- ------------------------------------------------------------------------------
The financial statements of the Variable Account and Northbrook and the
accompanying Reports of Independent Auditors appear on the pages that follow.
The financial statements of Northbrook included herein should be considered only
as bearing upon the ability of Northbrook to meet its obligations under the
Contracts.
<PAGE>
Financial Statements
Index
-----
Page
----
Independent Auditors' Report............................................... F-1
Financial Statements:
Statements of Financial Position
December 31, 1998 and 1997........................................... F-2
Statements of Operations and Comprehensive Income for the Years Ended
December 31, 1998, 1997 and 1996..................................... F-3
Statements of Shareholder's Equity for the Years Ended
December 31, 1998, 1997 and 1996..................................... F-4
Statements of Cash Flows for the Years Ended
December 31, 1998, 1997 and 1996..................................... F-5
Notes to Financial Statements......................................... F-6
Schedule IV - Reinsurance for the Years Ended
December 31, 1998, 1997 and 1996..................................... F-17
15
<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 (the "Company", an affiliate of The Allstate Corporation)
as of December 31, 1998 and 1997, and the related Statements of Operations and
Comprehensive Income, Shareholder's Equity and Cash Flows for each of the three
years in the period ended December 31, 1998. 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 the Company as of December 31, 1998 and
1997, and the results of its operations and its cash flows for each of the three
years in the period ended December 31, 1998 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.
/s/ Deloitte & Touche LLP
Chicago, Illinois
February 19, 1999
F-1
<PAGE>
F-2
<TABLE>
<CAPTION>
NORTHBROOK LIFE INSURANCE COMPANY
STATEMENTS OF FINANCIAL POSITION
December 31,
------------
($ in thousands) 1998 1997
---- ----
<S> <C> <C>
ASSETS
Investments
Fixed income securities, at fair value
(amortized cost $81,156 and $72,491) $ 86,336 $ 76,402
Short-term 5,083 3,031
---------- ----------
Total investments 91,419 79,433
Reinsurance recoverable from Allstate Life
Insurance Company 2,148,091 2,293,094
Receivable from affiliates, net -- 1,467
Other assets 8,206 5,033
Separate Accounts 7,031,083 5,719,203
---------- ----------
TOTAL ASSETS $9,278,799 $8,098,230
========== ==========
LIABILITIES
Reserve for life-contingent contract benefits $ 145,055 $ 144,352
Contractholder funds 2,003,122 2,148,555
Current income taxes payable 1,830 162
Deferred income taxes 3,316 2,674
Payable to affiliates, net 6,586 --
Separate Accounts 7,031,083 5,719,203
---------- ----------
TOTAL LIABILITIES 9,190,992 8,014,946
---------- ----------
COMMITMENTS AND CONTINGENT LIABILITIES (NOTE 10)
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 25,340 21,642
Accumulated other comprehensive income:
Unrealized net capital gains 3,367 2,542
---------- ----------
Total accumulated other comprehensive income 3,367 2,542
---------- ----------
TOTAL SHAREHOLDER'S EQUITY 87,807 83,284
---------- ----------
TOTAL LIABILITIES AND SHAREHOLDER'S EQUITY $9,278,799 $8,098,230
========== ==========
<FN>
See notes to financial statements.
</FN>
</TABLE>
<PAGE>
F-3
<TABLE>
<CAPTION>
NORTHBROOK LIFE INSURANCE COMPANY
STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
Year Ended December 31,
-----------------------
($ in thousands) 1998 1997 1996
---- ---- ----
<S> <C> <C> <C>
REVENUES
Net investment income $ 5,691 $ 5,146 $ 4,888
Realized capital gains and losses 2 (68) (20)
------- ------- -------
INCOME FROM OPERATIONS BEFORE INCOME TAX EXPENSE 5,693 5,078 4,868
Income tax expense 1,995 1,756 1,666
------- ------- -------
NET INCOME 3,698 3,322 3,202
------- ------- -------
OTHER COMPREHENSIVE INCOME, AFTER-TAX
Change in unrealized net capital gains and losses 825 1,256 (1,371)
------- ------- -------
COMPREHENSIVE INCOME $ 4,523 $ 4,578 $ 1,831
======= ======= =======
<FN>
See notes to financial statements.
</FN>
</TABLE>
<PAGE>
F-4
<TABLE>
<CAPTION>
NORTHBROOK LIFE INSURANCE COMPANY
STATEMENTS OF SHAREHOLDER'S EQUITY
December 31,
------------
($ in thousands) 1998 1997 1996
---- ---- ----
<S> <C> <C> <C>
COMMON STOCK $ 2,500 $ 2,500 $ 2,500
-------- -------- --------
ADDITIONAL CAPITAL PAID-IN 56,600 56,600 56,600
-------- -------- --------
RETAINED INCOME
Balance, beginning of year 21,642 18,320 15,118
Net income 3,698 3,322 3,202
-------- -------- --------
Balance, end of year 25,340 21,642 18,320
-------- -------- --------
ACCUMULATED OTHER COMPREHENSIVE INCOME
Balance, beginning of year 2,542 1,286 2,657
Change in unrealized net capital gains and losses 825 1,256 (1,371)
-------- -------- --------
Balance, end of year 3,367 2,542 1,286
-------- -------- --------
Total shareholder's equity $ 87,807 $ 83,284 $ 78,706
======== ======== ========
<FN>
See notes to financial statements.
</FN>
</TABLE>
<PAGE>
F-5
<TABLE>
<CAPTION>
NORTHBROOK LIFE INSURANCE COMPANY
STATEMENTS OF CASH FLOWS
Year Ended December 31,
-----------------------
($ in thousands) 1998 1997 1996
---- ---- ----
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 3,698 $ 3,322 $ 3,202
Adjustments to reconcile net income to net
cash provided by operating activities
Depreciation, amortization and
other non-cash items 518 516 782
Realized capital gains and losses (2) 68 20
Changes in:
Life-contingent contract benefits and
contractholder funds 273 205 (198)
Income taxes payable 1,866 (480) 346
Other operating assets and liabilities 4,126 (264) 542
-------- -------- --------
Net cash provided by operating activities 10,479 3,367 4,694
-------- -------- --------
CASH FLOWS FROM INVESTING ACTIVITIES
Fixed income securities
Proceeds from sales 1,922 1,606 3,522
Investment collections 10,253 10,036 5,770
Investment purchases (20,690) (18,568) (15,532)
Change in short-term investments, net (1,964) 3,559 1,459
-------- -------- --------
Net cash used in investing activities (10,479) (3,367) (4,781)
-------- -------- --------
NET DECREASE IN CASH -- -- (87)
CASH AT THE BEGINNING OF YEAR -- -- 87
-------- -------- --------
CASH AT END OF YEAR $ -- $ -- $ --
======== ======== ========
<FN>
See notes to financial statements.
</FN>
</TABLE>
<PAGE>
F-6
NORTHBROOK LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS
($ IN THOUSANDS)
1. GENERAL
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
("AIC"), a wholly owned subsidiary of The Allstate Corporation (the
"Corporation"). These financial statements have been prepared in conformity with
generally accepted accounting principles.
To conform with the 1998 presentation, certain amounts in the prior years'
financial statements and notes have been reclassified.
NATURE OF OPERATIONS
The Company markets savings products and life insurance exclusively through Dean
Witter Reynolds Inc. ("Dean Witter") (see Note 4), a wholly owned subsidiary of
Morgan Stanley Dean Witter. Savings products include deferred annuities, such as
variable annuities and fixed rate single and flexible premium annuities, and
immediate annuities. Life insurance includes universal life and variable life
products. In 1998, substantially all of the Company's statutory premiums and
deposits were from annuities. The Company re-domesticated its operations from
Illinois to Arizona in 1998.
Annuity contracts and life insurance policies issued by the Company are subject
to discretionary surrenders or withdrawal by customers, subject to applicable
surrender charges. These policies and contracts are reinsured primarily with
ALIC (see Note 3), which invests premiums and deposits to provide cash flows
that will be used to fund future benefits and expenses.
The Company monitors economic and regulatory developments which have the
potential to impact its business. There continues to be proposed federal and
state regulation and legislation that, if passed, would allow banks greater
participation in securities and insurance businesses. Such events would present
an increased level of competition for sales of the Company's products.
Furthermore, the market for deferred annuities and interest-sensitive life
insurance is enhanced by the tax incentives available under current law. Any
legislative changes which lessen these incentives are likely to negatively
impact the demand for these products.
Additionally, traditional demutualizations of mutual insurance companies and
enacted and pending state legislation to permit mutual insurance companies to
convert to a hybrid structure known as a mutual holding company could have a
number of significant effects on the Company by (1) increasing industry
competition through consolidation caused by mergers and acquisitions related to
the new corporate form of business; and (2) increasing competition in the
capital markets.
The Company is authorized to sell life and savings products in all states except
New York, as well as in the District of Columbia and Puerto Rico. The top
geographic locations for statutory premiums and deposits for the Company are
California, Florida and Texas for the year ended December 31, 1998. No other
jurisdiction accounted for more than 5% of statutory premiums and deposits.
Substantially all premiums and deposits are ceded to ALIC under reinsurance
agreements.
<PAGE>
F-7
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
INVESTMENTS
Fixed income securities include bonds and mortgage-backed securities. All fixed
income securities are carried at fair value and may be sold prior to their
contractual maturity ("available for sale"). The difference between amortized
cost and fair value, net of deferred income taxes, is reflected as a component
of shareholder's equity. Provisions are recognized for declines in the value of
fixed income securities that are other than temporary. Such writedowns are
included in realized capital gains and losses. Short-term investments are
carried at cost or amortized cost, which approximates fair value.
Investment income consists primarily of interest and dividends on short-term
investments. Interest is recognized on an accrual basis and dividends are
recorded at the ex-dividend date. Interest income on mortgage-backed securities
is determined on the effective yield method, based on the estimated principal
repayments. Accrual of income is suspended for fixed income securities that are
in default or when the receipt of interest payments is in doubt. Realized
capital gains and losses are determined on a specific identification basis.
REINSURANCE
The Company has reinsurance agreements whereby substantially all premiums,
contract charges, credited interest, policy benefits and certain expenses are
ceded to ALIC. Such amounts are reflected net of such reinsurance in the
statements of operations and comprehensive income. The amounts shown in the
Company's statements of operations and comprehensive income relate to the
investment of those assets of the Company that are not transferred 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.
RECOGNITION OF PREMIUM REVENUES AND CONTRACT CHARGES
Revenues on universal life-type contracts are comprised of contract charges and
fees, and are recognized when assessed against the policyholder account balance.
Revenues on investment contracts include contract charges and fees for contract
administration and surrenders. These revenues are recognized when levied against
the contract balance. All premium revenues and contract charges are primarily
reinsured with ALIC.
INCOME TAXES
The income tax provision is calculated under the liability method and presented
net of reinsurance. Deferred tax assets and liabilities are recorded based on
the difference between the financial statement and tax bases of assets and
liabilities at the enacted tax rates. Deferred income taxes arise from
unrealized capital gains and losses on fixed income securities carried at fair
value and differences in the tax bases of investments.
<PAGE>
F-8
SEPARATE ACCOUNTS
The Company issues flexible premium deferred variable annuity and variable life
policies, 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. The Company's Separate Accounts consist
of: Northbrook Variable Annuity Account, Northbrook Variable Annuity Account II
and Northbrook Life Variable Life Separate Account A. Each of the Separate
Accounts are 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 capital gains and losses of the Separate Accounts accrue directly
to the contractholders and, therefore, are not included in the Company's
statements of operations and comprehensive income. Revenues to the Company from
the Separate Accounts consist of contract maintenance fees, administration fees,
mortality and expense risk charges and cost of insurance charges, all of which
are reinsured with ALIC.
RESERVE FOR LIFE-CONTINGENT CONTRACT BENEFITS
The reserve for life-contingent contract benefits, which relates to structured
settlement annuities with life contingencies, is computed on the basis of
assumptions as to future investment yields, mortality, morbidity, terminations
and expenses. These assumptions include provisions for adverse deviation and
generally vary by such characteristics as type of coverage, year of issue and
policy duration. Reserve interest rates ranged from 4.00% to 11.00% during 1998.
CONTRACTHOLDER FUNDS
Contractholder funds arise from the issuance of individual or group policies and
contracts that include an investment component, including most fixed annuities
and universal life policies. Payments received are recorded as interest-bearing
liabilities. Contractholder funds are equal to deposits received and interest
credited to the benefit of the contractholder less withdrawals, mortality
charges and administrative expenses. During 1998, credited interest rates on
contractholder funds ranged from 3.46% to 11.00% for those contracts with fixed
interest rates and from 3.25% to 6.50% for those with flexible rates.
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.
NEW ACCOUNTING STANDARDS
In 1998, the Company adopted Statement of Financial Accounting Standards
("SFAS") 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 (See Note 9).
In 1998, the Company adopted 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
interim financial reporting. The Company has identified itself as a single
operating segment.
<PAGE>
F-9
PENDING ACCOUNTING STANDARDS
In December 1997, the Accounting Standards Executive Committee of the American
Institute of Certified Public Accountants ("AICPA") 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 Company is currently evaluating the
effects of this SOP on its accounting for insurance-related assessments. Certain
information required for compliance is not currently available and therefore the
Company is studying alternatives for estimating the accrual. In addition,
industry groups are working to improve the information available. Adoption of
this standard is not expected to be material to the results of operations or
financial position of the Company.
3. RELATED PARTY TRANSACTIONS
REINSURANCE
The Company has reinsurance agreements whereby substantially all premiums,
contract charges, credited interest, policy benefits and certain expenses are
ceded to ALIC and reflected net of such reinsurance in the statements of
operations and comprehensive income. The amounts shown in the Company's
statements of operations and comprehensive income relate to the investment of
those assets of the Company that are not transferred under reinsurance
agreements. Reinsurance recoverable and the related reserve for life-contingent
contract benefits and contracholder 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 under the
terms of reinsurance agreements. The following amounts were ceded to ALIC under
reinsurance agreements.
YEAR ENDED DECEMBER 31,
-----------------------
($ in thousands) 1998 1997 1996
---- ---- ----
Premiums $ 2,528 $ 1,979 $ 3,775
Contract charges 102,218 83,559 60,744
Credited interest, policy benefits,
and certain expenses 217,428 201,526 218,088
BUSINESS OPERATIONS
The Company utilizes services provided by AIC and ALIC and business facilities
owned or leased, and operated by AIC in conducting its business activities. The
Company reimburses AIC and ALIC for the operating expenses incurred on behalf of
the Company. 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 $26,230, $23,978 and $26,583 in 1998, 1997 and 1996,
respectively. Of these costs, the Company retains investment related expenses.
All other costs are ceded to ALIC under reinsurance agreements.
<PAGE>
F-10
4. EXCLUSIVE DISTRIBUTION AGREEMENT
The Company and ALIC have a strategic alliance with Dean Witter to develop,
market and distribute proprietary annuity and life insurance products through
Morgan Stanley Dean Witter Financial Advisors. Affiliates of Dean Witter are the
investment managers for the Morgan Stanley Dean Witter Variable Investment
Series, Morgan Stanley Universal Funds, Inc. and the Van Kampen American Capital
Life Investment Trust, the funds in which the assets of the Separate Accounts
are invested.
Under the terms of the strategic alliance, the Company has agreed to use Dean
Witter as an exclusive distribution channel for the Company's products. In
addition to the Company's products, Dean Witter markets other products which
compete with those of the Company. The strategic alliance is cancelable by
either party, however, the Company believes the benefits derived by Dean Witter
will preserve the alliance. If Dean Witter would choose to cancel the alliance,
existing contracts and policies would not be affected.
5. INVESTMENTS
FAIR VALUES
The amortized cost, gross unrealized gains and losses, and fair value for fixed
income securities are as follows:
<TABLE>
<CAPTION>
GROSS UNREALIZED
--------------------
AMORTIZED FAIR
COST GAINS LOSSES VALUE
---------- ------- ------- -------
<S> <C> <C> <C> <C>
AT DECEMBER 31, 1998
U.S. government and agencies $ 8,648 $ 1,469 $ -- $10,117
Municipal 590 11 -- 601
Corporate 33,958 1,634 (16) 35,576
Mortgage-backed securities 37,960 2,250 (168) 40,042
------- ------- ------- -------
Total fixed income securities $81,156 $ 5,364 $ (184) $86,336
======= ======= ======= =======
AT DECEMBER 31, 1997
U.S. government and agencies $ 8,638 $ 823 $ -- $ 9,461
Municipal 1,143 28 -- 1,171
Corporate 25,913 897 (12) 26,798
Mortgage-backed securities 36,797 2,315 (140) 38,972
------- ------- ------- -------
Total fixed income securities $72,491 $ 4,063 $ (152) $76,402
======= ======= ======= =======
</TABLE>
<PAGE>
F-11
SCHEDULED MATURITIES
The scheduled maturities for fixed income securities are as follows at December
31, 1998:
AMORTIZED FAIR
COST VALUE
Due in one year or less $ 1,443 $ 1,452
Due after one year through five years 7,546 7,950
Due after five years through ten years 26,008 27,429
Due after ten years 8,199 9,463
------- -------
43,196 46,294
Mortgage-backed securities 37,960 40,042
------- -------
Total $81,156 $86,336
======= =======
Actual maturities may differ from those scheduled as a result of prepayments by
the issuers.
NET INVESTMENT INCOME
YEAR ENDED DECEMBER 31, 1998 1997 1996
---- ---- ----
Fixed income securities $ 5,616 $ 5,364 $ 4,675
Short-term investments 190 84 390
------- ------- -------
Investment income, before expense 5,806 5,448 5,065
Investment expense 115 302 177
------- ------- -------
Net investment income $ 5,691 $ 5,146 $ 4,888
======= ======= =======
REALIZED CAPITAL GAINS AND LOSSES
YEAR ENDED DECEMBER 31, 1998 1997 1996
---- ---- ----
Fixed income securities $ 2 $ (70) $ (22)
Short-term investments -- 2 2
------- ------- -------
Realized capital gains and losses 2 (68) (20)
Income tax (1) 24 7
------- ------- -------
Realized capital gains and losses, after tax $ 1 $ (44) $ (13)
======= ======= =======
Excluding calls and prepayments, gross losses of $9, $70 and $32 were realized
on sales of fixed income securities during 1998, 1997 and 1996, respectively.
<PAGE>
F-12
UNREALIZED NET CAPITAL GAINS
Unrealized net capital gains on fixed income securities included in
shareholder's equity at December 31, 1998 are as follows:
<TABLE>
<CAPTION>
COST/
AMORTIZED FAIR GROSS UNREALIZED UNREALIZED
COST VALUE GAINS LOSSES NET GAINS
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Fixed income securities $ 81,156 $ 86,336 $ 5,364 $ (184) $ 5,180
======== ======== ======== ========
Deferred income taxes (1,813)
--------
Unrealized net capital gains $ 3,367
========
</TABLE>
CHANGE IN UNREALIZED NET CAPITAL GAINS
YEAR ENDED DECEMBER 31, 1998 1997 1996
------- ------- -------
Fixed income securities $ 1,269 $ 1,932 $(2,108)
Deferred income taxes (444) (676) 737
------- ------- -------
Increase (decrease) in unrealized net
capital gains $ 825 $ 1,256 $(1,371)
======= ======= =======
SECURITIES ON DEPOSIT
At December 31, 1998, fixed income securities with a carrying value of $9,188
were on deposit with regulatory authorities as required by law.
6. FINANCIAL INSTRUMENTS
In the normal course of business, the Company invests in various financial
assets and incurs various financial liabilities. The fair value estimates of
financial instruments presented below are not necessarily indicative of the
amounts the Company might pay or receive in actual market transactions.
Potential taxes and other transaction costs have not been considered in
estimating fair value. The disclosures that follow do not reflect the fair value
of the Company as a whole since a number of the Company's significant assets
(including reinsurance recoverable) and liabilities (including universal
life-type insurance reserves and deferred income taxes) are not considered
financial instruments and are not carried at fair value. Other assets and
liabilities considered financial instruments, such as accrued investment income,
are generally of a short-term nature. Their carrying values are assumed to
approximate fair value.
FINANCIAL ASSETS
The carrying value and fair value of financial assets at December 31, are as
follows:
1998 1997
---- ----
CARRYING FAIR CARRYING FAIR
VALUE VALUE VALUE VALUE
----- ----- ----- -----
Fixed income securities $ 86,336 $ 86,336 $ 76,402 $ 76,402
Short-term investments 5,083 5,083 3,031 3,031
Separate Accounts 7,031,083 7,031,083 5,719,203 5,719,203
<PAGE>
F-13
Fair values for fixed income securities are based on quoted market prices where
available. Non-quoted securities are valued based on discounted cash flows using
current interest rates for similar securities. Short-term investments are highly
liquid investments with maturities of less than one year whose carrying value
approximates fair value. Separate Accounts assets are carried in the statements
of financial position at fair value based on quoted market prices.
FINANCIAL LIABILITIES
The carrying value and fair value of financial liabilities at December 31, are
as follows:
1998 1997
---- ----
CARRYING FAIR CARRYING FAIR
VALUE VALUE VALUE VALUE
----- ----- ----- -----
Contractholder funds on
investment contracts $1,839,114 $1,814,684 $1,977,479 $1,951,214
Separate Accounts 7,031,083 7,031,083 5,719,203 5,719,203
The fair value of contractholder funds on 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 account balance less surrender charges. The fair value of
immediate annuities and annuities without life contingencies with fixed terms is
estimated using discounted cash flow calculations based on interest rates
currently offered for contracts with similar terms and durations. Separate
Accounts liabilities are carried at the fair value of the underlying assets.
7. INCOME TAXES
The Company joins the Corporation and its other eligible domestic subsidiaries
(the "Allstate Group") in the filing of a consolidated federal income tax return
and is party to a federal income tax allocation agreement (the "Allstate Tax
Sharing Agreement"). Under the Allstate Tax Sharing Agreement, the Company pays
to or receives from the Corporation the amount, if any, by which the Allstate
Group's federal income tax liability is affected by virtue of inclusion of the
Company in the consolidated federal income tax return. Effectively, this results
in the Company's annual income tax provision being computed, with adjustments,
as if the Company filed a separate return.
Prior to Sears, Roebuck and Co.'s ("Sears") distribution ("Sears distribution")
on June 30, 1995 of its 80.3% ownership in the Corporation to Sears
shareholders, 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"). 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 Company in the
consolidated federal income tax return.
<PAGE>
F-14
As a result of the Sears distribution, the Allstate Group was no longer included
in the Sears Tax Group, and the Tax Sharing Agreement was terminated.
Accordingly, the Allstate Group and Sears Group entered into a new tax sharing
agreement, which adopts many of the principles of the Tax Sharing Agreement and
governs their respective rights and obligations with respect to federal income
taxes for all periods prior to the Sears distribution, including the treatment
of audits of tax returns for such periods.
The Internal Revenue Service ("IRS") has completed its review of the Allstate
Group's federal income tax returns through the 1993 tax year. Any adjustment
that may result from IRS examinations of tax returns are not expected to have a
material impact on the financial position, liquidity or results of operations of
the Company.
The components of the deferred income tax assets and liabilities at December 31,
are as follows:
1998 1997
---- ----
DEFERRED ASSETS
Separate Accounts $ -- $ 149
------- -------
DEFERRED LIABILITIES
Difference in tax bases of investments (1,503) (1,454)
Unrealized net capital gains (1,813) (1,369)
------- -------
Total deferred liabilities (3,316) (2,823)
------- -------
Net deferred liability $(3,316) $(2,674)
======= =======
The components of income tax expense for the year ended December 31, are as
follows:
1998 1997 1996
---- ---- ----
Current $ 1,797 $ 1,843 $ 1,642
Deferred 198 (87) 24
------- ------- -------
Total income tax expense $ 1,995 $ 1,756 $ 1,666
======= ======= =======
The Company paid income taxes of $129, $2,236 and $2,308 in 1998, 1997 and 1996,
respectively. The Company had a current income tax liability of $1,830 and $162
at December 31, 1998 and 1997, respectively.
<PAGE>
F-15
A reconciliation of the statutory federal income tax rate to the effective
income tax rate on income from operations for the year ended December 31, is as
follows:
1998 1997 1996
------ ------ ------
Statutory federal income tax rate 35.0% 35.0% 35.0%
Tax-exempt income (0.2) (0.4) (0.6)
Other 0.2 -- (0.2)
------ ------ ------
Effective income tax rate 35.0% 34.6% 34.2%
====== ====== ======
Prior to January 1, 1984, the Company was entitled to exclude certain amounts
from taxable income and accumulate such amounts in a "policyholder surplus"
account. The balance in this account at December 31, 1998, approximately $16,
will result in federal income taxes payable of $6 if distributed by the Company.
No provision for taxes has been made as the Company has no plan to distribute
amounts from this account. No further additions to the account have been
permitted since the Tax Reform Act of 1984.
8. STATUTORY FINANCIAL INFORMATION
PERMITTED STATUTORY ACCOUNTING PRACTICES
The Company prepares its statutory financial statements in accordance with
accounting principles and practices prescribed or permitted by the Arizona
Department of Insurance. Prescribed statutory accounting practices include a
variety of publications of the National Association of Insurance Commissioners
("NAIC"), as 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 significant impact on statutory surplus or statutory net
income.
The NAIC's codification initiative has produced a comprehensive guide of revised
statutory accounting principles. While the NAIC has approved a January 1, 2001
implementation date for the newly developed guidance, companies must adhere to
the implementation date adopted by their state of domicile. The Company's state
of domicile, Arizona, is continuing its comparison of codification and current
statutory accounting requirements to determine necessary revisions to existing
state laws and regulations. The requirements are not expected to have a material
impact on the statutory surplus of the Company.
<PAGE>
F-16
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 the Company 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 1999 without prior approval of the Arizona Department of Insurance is
$3,518.
9. OTHER COMPREHENSIVE INCOME
The components of other comprehensive income on a pretax and after-tax basis for
the year ended December 31, are as follows:
<TABLE>
<CAPTION>
1998 1997 1996
-------------------------------- ---------------------------- -----------------------------
After- After- After-
Pretax Tax tax Pretax Tax tax Pretax Tax tax
------ --- --- ------ --- --- ------ --- ---
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Unrealized capital gains
and losses:
- ---------------------------------
Unrealized holding gains
(losses) arising during
the period $ 1,271 $ (445) $ 826 $ 1,862 $ (652) $ 1,210 $(2,130) $ 745 $(1,385)
Less: reclassification
adjustment for realized
net capital gains
included in net income 2 (1) 1 (70) 24 (46) (22) 8 (14)
------- ------- ------- ------- ------- ------- ------- ------- -------
Unrealized net capital
gains (losses) 1,269 (444) 825 1,932 (676) 1,256 (2,108) 737 (1,371)
------- ------- ------- ------- ------- ------- ------- ------- -------
Other comprehensive
income $ 1,269 $ (444) $ 825 $ 1,932 $ (676) $ 1,256 $(2,108) $ 737 $(1,371)
======= ======= ======= ======= ======= ======= ======= ======= =======
</TABLE>
10. COMMITMENTS AND CONTINGENT LIABILITIES
REGULATION AND LEGAL PROCEEDINGS
The Company's business is subject to the effects of a changing social, economic
and regulatory environment. Public and regulatory initiatives have varied and
have included employee benefit regulations, removal of barriers preventing banks
from engaging in the securities and insurance business, tax law changes
affecting the taxation of insurance companies, the tax treatment of insurance
products and its impact on the relative desirability of various personal
investment vehicles, and proposed legislation to prohibit the use of gender in
determining insurance rates and benefits. The ultimate changes and eventual
effects, if any, of these initiatives are uncertain.
From time to time the Company is involved in pending and threatened litigation
in the normal course of its business in which claims for monetary damages are
asserted. In the opinion of management, the ultimate liability, if any, arising
from such pending or threatened litigation is not expected to have a material
effect on the results of operations, liquidity or financial position of the
Company.
<PAGE>
F-17
NORTHBROOK LIFE INSURANCE COMPANY
SCHEDULE IV--REINSURANCE
($ IN THOUSANDS)
GROSS NET
YEAR ENDED DECEMBER 31, 1998 AMOUNT CEDED AMOUNT
- ---------------------------- ------ ----- ------
Life insurance in force $ 494,256 $ 494,256 $ --
========= ========= =========
Premiums and contract charges:
Life and annuities $ 104,746 $ 104,746 $ --
========= ========= =========
GROSS NET
YEAR ENDED DECEMBER 31, 1998 AMOUNT CEDED AMOUNT
- ---------------------------- ------ ----- ------
Life insurance in force $ 515,890 $ 515,890 $ --
========= ========= =========
Premiums and contract charges:
Life and annuities $ 85,538 $ 85,538 $ --
========= ========= =========
GROSS NET
YEAR ENDED DECEMBER 31, 1998 AMOUNT CEDED AMOUNT
- ---------------------------- ------ ----- ------
Life insurance in force $ 556,242 $ 556,242 $ --
========= ========= ==========
Premiums and contract charges:
Life and annuities $ 64,519 $ 64,519 $ --
========= ========= ==========
<PAGE>
-------------------------------------------------------------------------------
NORTHBROOK VARIABLE ANNUITY ACCOUNT II
Financial Statements as of December 31, 1998
and for the periods ended December 31, 1998
and December 31, 1997, and
Independent Auditors' Report
<PAGE>
NORTHBROOK VARIABLE ANNUITY ACCOUNT II
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
Page
Independent Auditors' Report 1
Statements of Net Assets as of December 31, 1998 for the following:
Investments in the Morgan Stanley Dean Witter Variable Investment
Series Portfolios: 2
Money Market
High Yield
Equity
Quality Income Plus
Strategist
Dividend Growth
Utilities
European Growth
Capital Growth
Global Dividend Growth
Pacific Growth
Capital Appreciation
Income Builder
Competitive Edge "Best Ideas"
S&P 500 Index
Investments in the Morgan Stanley Dean Witter Universal Funds, Inc.
Portfolios:
International Magnum
Emerging Markets Equity
Equity Growth
U.S. Real Estate
Investment in the Van Kampen Life Investment Trust Portfolio:
Emerging Growth
<PAGE>
NORTHBROOK VARIABLE ANNUITY ACCOUNT II
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
Page
Statements of Operations for the following:
For the Year Ended December 31, 1998
Investments in the Morgan Stanley Dean Witter Variable Investment
Series Portfolios: 3,4,5
Money Market
High Yield
Equity
Quality Income Plus
Strategist
Dividend Growth
Utilities
European Growth
Capital Growth
Global Dividend Growth
Pacific Growth
Capital Appreciation
Income Builder
For the Period May 18, 1998 to December 31, 1998 5
Investments in the Morgan Stanley Dean Witter Variable Investment
Series Portfolios:
Competitive Edge "Best Ideas"
S&P 500 Index
For the Period March 16, 1998 to December 31, 1998 5
Investments in the Morgan Stanley Dean Witter Universal Funds,
Inc. Portfolios:
International Magnum
Emerging Markets Equity
Equity Growth
For the Period May 18, 1998 to December 31, 1998 5
Investments in the Morgan Stanley Dean Witter Universal Funds,
Inc. Portfolios:
U.S. Real Estate
For the Period March 16, 1998 to December 31, 1998 5
Investment in the Van Kampen Life Investment Trust Portfolio:
Emerging Growth
<PAGE>
NORTHBROOK VARIABLE ANNUITY ACCOUNT II
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
Page
Statements of Changes in Net Assets for the following:
For the Years Ended December 31, 1998, and 1997
Investments in the Morgan Stanley Dean Witter Variable Investment
Series Portfolios: 6,7,9,10
Money Market
High Yield
Equity
Quality Income Plus
Strategist
Dividend Growth
Utilities
European Growth
Capital Growth
Global Dividend Growth
Pacific Growth
For the Year Ended December 31, 1998, and for the Period
January 21, 1997 to December 31, 1997
Investments in the Morgan Stanley Dean Witter Variable
Investment Series Portfolios:
Capital Appreciation
Income Builder 8, 10
For the Period May 18, 1998 to December 31, 1998
Investments in the Morgan Stanley Dean Witter Variable Investment
Series Portfolios: 8
Competitive Edge "Best Ideas"
S&P 500 Index
For the Period March 16, 1998 to December 31, 1998
Investments in the Morgan Stanley Dean Witter Universal Funds,
Inc. Portfolios:
International Magnum
Emerging Markets Equity
Equity Growth
For the Period May 18, 1998 to December 31, 1998
Investment in the Morgan Stanley Dean Witter Universal Funds, Inc. Portfolio:
U.S. Real Estate
For the Period March 16, 1998 to December 31, 1998
Investment in the Van Kampen Life Investment Trust Portfolio:
Emerging Growth
Notes to Financial Statements 11-17
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Board of Directors and Shareholder of
Northbrook Life Insurance Company:
We have audited the accompanying statements of net assets of each of the
sub-accounts ("portfolios" for purposes of this report), listed in the table of
contents, that comprise Northbrook Variable Annuity Account II (the "Account"),
a Separate Account of Northbrook Life Insurance Company, an affiliate of The
Allstate Corporation, as of December 31, 1998, and the related statements of
operations and changes in net assets for the applicable periods indicated in the
table of contents. 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 audits 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, 1998. 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 each of the portfolios, listed in the table
of contents, that comprise the Account as of December 31, 1998, and the results
of their operations, and the changes in their net assets for each of the
periods, indicated in the table of contents, in conformity with generally
accepted accounting principles.
/s/ Deloitte & Touche LLP
Chicago, Illinois
March 18, 1999
<PAGE>
NORTHBROOK VARIABLE ANNUITY ACCOUNT II
STATEMENTS OF NET ASSETS
DECEMBER 31, 1998
- --------------------------------------------------------------------------------
($ and shares in thousands)
ASSETS
Investments in the Morgan Stanley Dean Witter Variable
Investment Series Portfolios:
Money Market, 401,023 shares (cost $401,023) $ 401,023
High Yield, 66,497 shares (cost $407,839) 337,140
Equity, 26,919 shares (cost $761,382) 1,038,517
Quality Income Plus, 45,087 shares (cost $481,586) 495,962
Strategist, 33,442 shares (cost $456,197) 556,471
Dividend Growth, 94,314 shares (cost $1,606,539) 2,087,163
Utilities, 23,911 shares (cost $353,913) 508,112
European Growth, 17,375 shares (cost $353,686) 472,241
Capital Growth, 6,310 shares (cost $100,444) 128,471
Global Dividend Growth, 32,832 shares (cost $405,572) 454,072
Pacific Growth, 9,197 shares (cost $66,760) 47,365
Capital Appreciation, 3,020 shares (cost $33,114) 31,290
Income Builder, 7,319 shares (cost $83,510) 83,874
Competitive Edge "Best Ideas", 3,599 shares (cost $34,032) 35,309
S&P 500 Index, 4,143 shares (cost $41,873) 46,487
Investments in the Morgan Stanley Dean Witter Universal Funds,
Inc. Portfolios:
International Magnum, 308 shares (cost $3,639) 3,463
Emerging Markets Equity, 205 shares (cost $1,636) 1,459
Equity Growth, 1,701 shares (cost $24,283) 25,683
U.S. Real Estate, 202 shares (cost $2,036) 1,980
Investments in the Van Kampen Life Investment Trust Portfolio:
Emerging Growth, 426 shares (cost $8,141) 9,640
------------
Total assets 6,765,722
LIABILITIES
Payable to Northbrook Life Insurance Company:
Accrued contract maintenance charges 1,499
------------
Net assets $ 6,764,223
============
See notes to financial statements.
2
<PAGE>
<TABLE>
<CAPTION>
NORTHBROOK VARIABLE ANNUITY ACCOUNT II
STATEMENTS OF OPERATIONS
- ---------------------------------------------------------------------------------------------------------------------------------
($ in thousands)
Morgan Stanley Dean Witter Variable Investment Series Portfolios
--------------------------------------------------------------------------
For the Year Ended December 31, 1998
--------------------------------------------------------------------------
Quality
Money High Income Dividend
Market Yield Equity Plus Strategist Growth
--------- --------- --------- --------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C>
INVESTMENT INCOME
Dividends $ 17,397 $ 43,535 $ 109,635 $ 28,193 $ 56,397 $ 209,394
Charges from Northbrook Life Insurance
Company:
Mortality and expense risk (4,498) (4,678) (11,173) (5,781) (6,152) (25,103)
Administrative expense (350) (360) (862) (455) (480) (1,944)
--------- --------- --------- --------- --------- ---------
Net investment income (loss) 12,549 38,497 97,600 21,957 49,765 182,347
--------- --------- --------- --------- --------- ---------
REALIZED AND UNREALIZED GAINS
(LOSSES) ON INVESTMENTS
Realized gains (losses) from sales of investments:
Proceeds from sales 239,277 154,402 95,654 59,783 60,552 184,605
Cost of investments sold 239,277 164,118 73,762 58,900 51,539 133,624
--------- --------- --------- --------- --------- ---------
Net realized gains (losses) -- (9,716) 21,892 883 9,013 50,981
--------- --------- --------- --------- --------- ---------
Change in unrealized gains (losses) -- (58,495) 101,407 7,935 48,208 (11,845)
--------- --------- --------- --------- --------- ---------
Net gains (losses) on investments - -- (68,211) 123,299 8,818 57,221 39,136
--------- --------- --------- --------- --------- ---------
CHANGE IN NET ASSETS RESULTING
FROM OPERATIONS $ 12,549 $ (29,714) $ 220,899 $ 30,775 $ 106,986 $ 221,483
========= ========= ========= ========= ========= =========
<FN>
See notes to financial statements.
</FN>
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
NORTHBROOK VARIABLE ANNUITY ACCOUNT II
STATEMENTS OF OPERATIONS
- ---------------------------------------------------------------------------------------------------------------------------------
($ in thousands)
Morgan Stanley Dean Witter Variable Investment Series Portfolios
--------------------------------------------------------------------------
For the Year Ended December 31, 1998
--------------------------------------------------------------------------
Global Capital
European Capital Dividend Pacific Appreci-
Utilities Growth Growth Growth Growth ation
--------- --------- --------- -------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
INVESTMENT INCOME
Dividends $ 34,513 $ 32,912 $ 9,336 $ 56,581 $ 2,661 $ 200
Charges from Northbrook Life Insurance
Company:
Mortality and expense risk (5,586) (5,623) (1,586) (5,960) (645) (420)
Administrative expense (439) (436) (123) (462) (50) (32)
--------- --------- --------- --------- --------- ---------
Net investment income (loss) 28,488 26,853 7,627 50,159 1,966 (252)
--------- --------- --------- --------- --------- ---------
REALIZED AND UNREALIZED GAINS
(LOSSES) ON INVESTMENTS
Realized gains (losses) from sales of investments:
Proceeds from sales 67,310 104,720 26,648 87,138 69,894 10,850
Cost of investments sold 47,924 80,227 22,224 77,300 93,611 10,897
--------- --------- --------- --------- --------- ---------
Net realized gains (loss) 19,386 24,493 4,424 9,838 (23,717) (47)
--------- --------- --------- --------- --------- ---------
Change in unrealized gains (losses) 41,969 25,370 6,985 (15,619) 14,937 (2,968)
--------- --------- --------- --------- --------- ---------
Net gains (losses) on investments 61,355 49,863 11,409 (5,781) (8,780) (3,015)
--------- --------- --------- --------- --------- ---------
CHANGE IN NET ASSETS RESULTING
FROM OPERATIONS $ 89,843 $ 76,716 $ 19,036 $ 44,378 $ (6,814) $ (3,267)
========= ========= ========= ========= ========= =========
See notes to financial statements.
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
NORTHBROOK VARIABLE ANNUITY ACCOUNT II
STATEMENTS OF OPERATIONS
- -------------------------------------------------------------------------------------------------------------------------------
($ in thousands)
Van Kampen
Life
Investment
Morgan Stanley Dean Witter Morgan Stanley Dean Witter Univeral Trust
Variable Investment Series Funds, Inc. Portfolios Portfolio
------------------------------ ----------------------------------------- ----------
For the For the
For the Period Period
Year May 18, March 16,
Ended For the Period 1998 to 1998 to
December May 18, 1998 to For the Period March 16, December December
31, 1998 December 31, 1998 1998 to December 31, 1998 31, 1998 31, 1998
-------- ------------------- ------------------------------ --------- ---------
Compet-
itive
Edge Inter- Emerging U.S.
Income "Best S&P 500 national Markets Equity Real Emerging
Builder Ideas" Index Magnum Equity Growth Estate Growth
-------- -------- -------- --------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
INVESTMENT INCOME
Dividends $ 4,591 $ -- $ -- $ 20 $ 7 $ 106 $ 54 $ --
Charges from Northbrook Life Insurance
Company:
Mortality and expense risk (1,007) (199) (159) (25) (9) (172) (10) (44)
Administrative expense (76) (15) (12) (2) (1) (13) (1) (3)
-------- -------- -------- -------- -------- -------- -------- --------
Net investment income (loss) 3,508 (214) (171) (7) (3) (79) 43 (47)
-------- -------- -------- -------- -------- -------- -------- --------
REALIZED AND UNREALIZED GAINS
(LOSSES) ON INVESTMENTS
Realized gains (losses) from sales of
investments:
Proceeds from sales 9,687 9,230 1,921 1,007 603 2,815 298 1,422
Cost of investments sold 9,828 9,577 1,955 1,082 669 3,027 328 1,474
-------- -------- -------- -------- -------- -------- -------- --------
Net realized gains (losses) (141) (347) (34) (75) (66) (212) (30) (52)
-------- -------- -------- -------- -------- -------- -------- --------
Change in unrealized gains (losses) (3,234) 1,277 4,614 (176) (177) 1,400 (56) 1,499
-------- -------- -------- -------- -------- -------- -------- --------
Net gains (losses) on investments (3,375) 930 4,580 (251) (243) 1,188 (86) 1,447
-------- -------- -------- -------- -------- -------- -------- --------
CHANGE IN NET ASSETS RESULTING
FROM OPERATIONS $ 133 $ 716 $ 4,409 $ (258) $ (246) $ 1,109 $ (43) $ 1,400
======== ======== ======== ======== ======== ======== ======== ========
<FN>
See notes to financial statements.
</FN>
</TABLE>
5
<PAGE>
<TABLE>
<CAPTION>
NORTHBROOK VARIABLE ANNUITY ACCOUNT II
STATEMENTS OF CHANGES IN NET ASSETS
- -----------------------------------------------------------------------------------------------------------------------------
($ in thousands)
Morgan Stanley Dean Witter Variable Investment Series Portfolios
--------------------------------------------------------------------------------------
For the Year Ended December 31, 1998
--------------------------------------------------------------------------------------
Quality
Money High Income Dividend
Market Yield Equity Plus Strategist Growth
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
FROM OPERATIONS
Net investment income (loss) $ 12,549 $ 38,497 $ 97,600 $ 21,957 $ 49,765 $ 182,347
Net realized gains (losses) -- (9,716) 21,892 883 9,013 50,981
Change in unrealized gains (losses) -- (58,495) 101,407 7,935 48,208 (11,845)
----------- ----------- ----------- ----------- ----------- -----------
Change in net assets resulting
from operations 12,549 (29,714) 220,899 30,775 106,986 221,483
FROM CAPITAL TRANSACTIONS
Deposits 129,304 89,840 172,406 61,783 73,193 365,505
Benefit payments (10,995) (6,105) (8,144) (7,285) (6,681) (20,960)
Payments on termination (87,147) (37,591) (87,507) (51,273) (53,776) (208,790)
Contract maintenance charges (141) (129) (381) (199) (221) (878)
Transfers among the portfolios and
with the Fixed Account - net 56,130 (15,774) 4,500 38,984 13,210 (16,301)
----------- ----------- ----------- ----------- ----------- -----------
Change in net assets resulting
from capital transactions 87,151 30,241 80,874 42,010 25,725 118,576
----------- ----------- ----------- ----------- ----------- -----------
INCREASE (DECREASE) IN NET ASSETS 99,700 527 301,773 72,785 132,711 340,059
NET ASSETS AT BEGINNING OF YEAR 301,234 336,538 736,514 423,067 423,637 1,746,643
----------- ----------- ----------- ----------- ----------- -----------
NET ASSETS AT END OF YEAR $ 400,934 $ 337,065 $1,038,287 $ 495,852 $ 556,348 $ 2,086,702
=========== =========== =========== =========== =========== ===========
<FN>
See notes to financial statements.
</FN>
</TABLE>
6
<PAGE>
<TABLE>
<CAPTION>
NORTHBROOK VARIABLE ANNUITY ACCOUNT II
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------------------------------------------------
($ in thousands)
Morgan Stanley Dean Witter Variable Investment Series Portfolios
----------------------------------------------------------------------------
For the Year Ended December 31, 1998
----------------------------------------------------------------------------
Global
European Capital Dividend Pacific Capital
Utilities Growth Growth Growth Growth Appreciation
---------- ----------- ----------- ----------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
FROM OPERATIONS
Net investment income (loss) $ 28,488 $ 26,853 $ 7,627 $ 50,159 $ 1,966 $ (252)
Net realized gains (losses) 19,386 24,493 4,424 9,838 (23,717) (47)
Change in unrealized gains (losses) 41,969 25,370 6,985 (15,619) 14,937 (2,968)
----------- ----------- ----------- ----------- ----------- -----------
Change in net assets resulting
from operations 89,843 76,716 19,036 44,378 (6,814) (3,267)
FROM CAPITAL TRANSACTIONS
Deposits 58,091 77,756 17,878 54,785 5,414 12,585
Benefit payments (7,223) (4,658) (965) (4,783) (481) (278)
Payments on termination (56,603) (44,010) (15,021) (45,080) (5,343) (2,047)
Contract maintenance charges (207) (197) (51) (209) (24) (13)
Transfers among the portfolios and with the
Fixed Account - net 14,560 8,524 (10,068) (45,404) (7,740) (6,494)
----------- ----------- ----------- ----------- ----------- -----------
Change in net assets resulting from
capital transactions 8,618 37,415 (8,227) (40,691) (8,174) 3,753
----------- ----------- ----------- ----------- ----------- -----------
INCREASE (DECREASE) IN NET ASSETS 98,461 114,131 10,809 3,687 (14,988) 486
NET ASSETS AT BEGINNING OF YEAR 409,538 358,005 117,633 450,284 62,342 30,797
----------- ----------- ----------- ----------- ----------- -----------
NET ASSETS AT END OF YEAR $ 507,999 $ 472,136 $ 128,442 $ 453,791 $ 47,354 $ 31,283
=========== =========== =========== =========== =========== ===========
<FN>
See notes to financial statements.
</FN>
</TABLE>
7
<PAGE>
<TABLE>
<CAPTION>
NORTHBROOK VARIABLE ANNUITY ACCOUNT II
STATEMENTS OF CHANGES IN NET ASSETS
- ----------------------------------------------------------------------------------------------------------------------------------
($ in thousands)
Van Kampen
Life
Morgan Stanley Dean Witter Investment
Variable Investment Series Morgan Stanley Dean Witter Trust
Portfolio Universal Funds, Inc. Portfolio Portfolio
---------------------------------- --------------------------------------------- ----------
For the For the
Period Period
For the May 18, March 16,
Year Ended For the Period For the Period 1998 to 1998 to
December May 18, 1998 to March 16, 1998 to December December
31, 1998 December 31, 1998 December 31, 1998 31, 1998 31, 1998
---------- --------------------- --------------------------------- --------- ---------
Competi-
tive Edge Inter- Emerging U.S.
Income "Best S&P 500 national Markets Equity Real Emerging
Builder Ideas" Index Magnum Equity Growth Estate Growth
--------- --------- --------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
FROM OPERATIONS
Net investment income (loss) $ 3,508 $ (214) $ (171) $ (7) $ (3) $ (79) $ 43 $ (47)
Net realized gains (losses) (141) (347) (34) (75) (66) (212) (30) (52)
Change in unrealized gains (losses) (3,234) 1,277 4,614 (176) (177) 1,400 (56) 1,499
--------- --------- --------- --------- --------- --------- --------- ---------
Change in net assets resulting
from operations 133 716 4,409 (258) (246) 1,109 (43) 1,400
FROM CAPITAL TRANSACTIONS
Deposits 34,230 19,127 20,590 2,610 1,114 21,346 1,559 5,514
Benefit payments (920) (168) (60) (11) -- (354) -- --
Payments on termination (5,563) (423) (593) (168) (7) (594) (35) (272)
Contract maintenance charges (31) (10) (12) (1) -- (7) (1) (3)
Transfers among the portfolios and
with the Fixed Account - net 3,008 16,059 22,143 1,291 598 4,177 500 2,999
--------- --------- --------- --------- --------- --------- --------- ---------
Change in net assets resulting
from capital transactions 30,724 34,585 42,068 3,721 1,705 24,568 2,023 8,238
--------- --------- --------- --------- --------- --------- --------- ---------
INCREASE (DECREASE) IN NET ASSETS 30,857 35,301 46,477 3,463 1,459 25,677 1,980 9,638
NET ASSETS AT BEGINNING OF PERIOD 52,998 -- -- -- -- -- -- --
--------- --------- --------- --------- --------- --------- --------- ---------
NET ASSETS AT END OF PERIOD $ 83,855 $ 35,301 $ 46,477 $ 3,463 $ 1,459 $ 25,677 $ 1,980 $ 9,638
========= ========= ========= ========= ========= ========= ========= =========
<FN>
See notes to financial statements.
</FN>
</TABLE>
8
<PAGE>
<TABLE>
<CAPTION>
NORTHBROOK VARIABLE ANNUITY ACCOUNT II
STATEMENTS OF CHANGES IN NET ASSETS
- ----------------------------------------------------------------------------------------------------------------------------------
($ and units in thousands, except value per unit)
Morgan Stanley Dean Witter Variable Investment Series Portfolios
---------------------------------------------------------------------------------------------
For the Year Ended December 31, 1997
---------------------------------------------------------------------------------------------
Quality
Money High Income Dividend
Market Yield Equity Plus Strategist Growth Utilities
----------- ----------- ----------- ---------- ----------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
FROM OPERATIONS
Net investment income (loss) $ 12,015 $ 30,441 $ 33,669 $ 21,868 $ 15,247 $ 79,397 $ 12,658
Net realized gains (losses) -- (164) 14,161 (1,005) 6,525 27,352 15,934
Change in unrealized gains (losses) -- (2,116) 125,556 16,518 21,328 191,096 56,029
----------- ----------- ----------- ---------- ----------- ----------- ----------
Change in net assets resulting
from operations 12,015 28,161 173,386 37,381 43,100 297,845 84,621
FROM CAPITAL TRANSACTIONS
Deposits 149,402 104,526 162,502 50,521 85,569 446,039 30,744
Benefit payments (9,812) (3,029) (4,642) (7,406) (4,738) (13,976) (6,217)
Payments on termination (82,460) (34,243) (76,080) (55,141) (53,102) (185,959) (53,999)
Contract maintenance charges (101) (123) (296) (182) (184) (748) (192)
Transfers among the portfolios and
with the Fixed Account - net (68,644) 13,062 30,461 (17,577) 6,753 59,898 (32,932)
----------- ----------- ----------- ---------- ----------- ----------- ----------
Change in net assets resulting
from capital transactions (11,615) 80,193 111,945 (29,785) 34,298 305,254 (62,596)
----------- ----------- ----------- ---------- ----------- ----------- ----------
INCREASE (DECREASE) IN NET ASSETS 400 108,354 285,331 7,596 77,398 603,099 22,025
NET ASSETS AT BEGINNING OF PERIOD 300,834 228,184 451,183 415,471 346,239 1,143,544 387,513
NET ASSETS AT END OF PERIOD $ 301,234 $ 336,538 $ 736,514 $ 423,067 $ 423,637 $ 1,746,643 $ 409,538
=========== =========== =========== ========== =========== =========== ==========
CONTRACTS WITHOUT THE
DEATH BENEFIT OPTIONS
Net asset value per unit at end
of period $ 12.55 $ 26.65 $ 38.87 $ 17.98 $ 21.54 $ 32.59 $ 24.21
=========== =========== =========== ========== =========== =========== ==========
Units outstanding at end of period 18,622 8,795 13,509 20,834 16,149 39,665 15,170
=========== =========== =========== ========== =========== =========== ==========
CONTRACTS WITH THE
DEATH BENEFIT OPTIONS
Net asset value per unit at
end of period $ 12.51 $ 26.57 $ 38.76 $ 17.93 $ 21.48 $ 32.50 $ 24.14
=========== =========== =========== ========== =========== =========== ==========
Units outstanding at end
of period 5,407 3,844 5,455 2,701 3,529 13,970 1,754
=========== =========== =========== ========== =========== =========== ==========
<FN>
See notes to the financial statements.
</FN>
</TABLE>
9
<PAGE>
<TABLE>
<CAPTION>
NORTHBROOK VARIABLE ANNUITY ACCOUNT II
STATEMENTS OF CHANGES IN NET ASSETS
- ----------------------------------------------------------------------------------------------------------------------
($ and units in thousands, except value per unit)
Morgan Stanley Dean Witter Variable Investment Series Portfolios
---------------------------------------------------------------------------------
For the Period January 21,
For the Year Ended December 31, 1997 to December 31, 1997
----------------------------------------------------- --------------------------
Global
European Capital Dividend Pacific Capital Income
Growth Growth Growth Growth Appreciation Builder
---------- ----------- ----------- ----------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C>
FROM OPERATIONS
Net investment income (loss) $ 15,664 $ 9,696 $ 17,676 $ 231 $ (214) $ 934
Net realized gains (losses) 12,290 3,189 3,995 (8,369) 158 34
Change in unrealized gains (losses) 15,432 4,657 12,263 (35,707) 1,144 3,598
----------- ----------- ----------- ----------- ----------- -----------
Change in net assets resulting
from operations 43,386 17,542 33,934 (43,845) 1,088 4,566
FROM CAPITAL TRANSACTIONS
Deposits 87,645 24,982 128,566 15,672 18,352 31,208
Benefit payments (2,725) (910) (3,466) (1,262) (109) (165)
Payments on termination (37,732) (11,218) (41,571) (11,743) (944) (1,458)
Contract maintenance charges (148) (49) (199) (37) (12) (15)
Transfers among the portfolios and
with the Fixed Account - net (3,726) 8,692 25,556 (26,769) 12,422 18,862
----------- ----------- ----------- ----------- ----------- -----------
Change in net assets resulting
from capital transactions 43,314 21,497 108,886 (24,139) 29,709 48,432
----------- ----------- ----------- ----------- ----------- -----------
INCREASE (DECREASE) IN NET ASSETS 86,700 39,039 142,820 (67,984) 30,797 52,998
NET ASSETS AT BEGINNING OF PERIOD 271,305 78,594 307,464 130,326 -- --
NET ASSETS AT END OF PERIOD $ 358,005 $ 117,633 $ 450,284 $ 62,342 $ 30,797 $ 52,998
=========== =========== =========== =========== =========== ===========
CONTRACTS WITHOUT THE
DEATH BENEFIT OPTIONS
Net asset value per unit at end
of period $ 27.87 $ 20.18 $ 15.30 $ 6.06 $ 11.18 $ 12.08
=========== =========== =========== =========== =========== ===========
Units outstanding at end of period 9,762 4,469 21,656 8,190 1,609 2,363
=========== =========== =========== =========== =========== ===========
CONTRACTS WITH THE
DEATH BENEFIT OPTIONS
Net asset value per unit at end
of period $ 27.79 $ 20.12 $ 15.26 $ 6.04 $ 11.16 $ 12.07
=========== =========== =========== =========== =========== ===========
Units outstanding at end of period 3,091 1,365 7,789 2,105 1,148 2,025
=========== =========== =========== =========== =========== ===========
<FN>
See notes to the financial statements.
</FN>
</TABLE>
10
<PAGE>
NORTHBROOK VARIABLE ANNUITY ACCOUNT II
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
1. ORGANIZATION
Northbrook Variable Annuity Account II (the "Account"), a unit investment
trust registered with the Securities and Exchange Commission under the
Investment Company Act of 1940, is a Separate Account of Northbrook Life
Insurance Company ("Northbrook Life"). The assets of the Account are
legally segregated from those of Northbrook Life. Northbrook Life is wholly
owned by Allstate Life Insurance Company, a wholly owned subsidiary of
Allstate Insurance Company, which is wholly owned by The Allstate
Corporation.
Northbrook Life issues two variable annuity contracts, the Northbrook
Variable Annuity II and the Morgan Stanley Dean Witter Variable Annuity II
Asset Manager, the deposits of which are invested at the direction of the
contractholder in the sub-accounts ("portfolios" for the purposes of this
report) that comprise the Account. Contractholders bear all investment risk
for amounts allocated to the Account. The portfolios invest in the Morgan
Stanley Dean Witter Variable Investment Series, Morgan Stanley Dean Witter
Universal Funds, Inc., and Van Kampen Life Investment Trust (collectively,
the "Funds").
Northbrook Life provides insurance and administrative services to the
contractholders for a fee.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
VALUATION OF INVESTMENTS - Investments consist of shares of the Funds and
are stated at fair value based on quoted market prices at December 31,
1998.
INVESTMENT INCOME - Investment income consists of dividends declared by the
Funds and is recognized on the date of record.
REALIZED GAINS AND LOSSES - Realized gains and losses represent the
difference between the proceeds from sales of portfolio shares by the
Account and the cost of such shares, which is determined on a weighted
average basis.
FEDERAL INCOME TAXES - The Account intends to qualify as a segregated asset
account as defined in the Internal Revenue Code ("Code"). As such, the
operations of the Account are included in the tax return of Northbrook
Life. Northbrook Life is taxed as a life insurance company under the Code.
No federal income taxes are payable by the Account in 1998 as the Account
did not generate taxable income.
11
<PAGE>
3. CONTRACT CHARGES
Northbrook Life charges each contractholder daily at a per annum rate as
follows:
Mortality and Administrative
expense risk expense
------------ -------
Northbrook Variable Annuity II 1.25% (a) .10%
Morgan Stanley Dean Witter Variable
Annuity II Asset Manager 1.49% (b) .10%
(a) Two optional death benefit provisions (enhanced death benefit and
performance death benefit) and an optional performance income benefit
are available at an additional charge of .13% for each, bringing the
mortality and expense risk charge to 1.38% when one of these options
has been selected. When both the performance income benefit and the
performance death benefit are selected, an additional charge of .24%
is assessed for a total mortality and expense risk charge of 1.49%.
(b) Two optional death benefit provisions (enhanced death benefit and
performance death benefit) and an optional performance income benefit
are available at an additional charge of .13% for each, bringing the
mortality and expense risk charge to 1.62% when one of these options
has been selected. When both the performance income benefit and the
performance death benefit are selected, an additional charge of .24%
is assessed for a total mortality and expense risk charge of 1.73%.
Northbrook Life charges an annual contract maintenance fee of $30 for each
Northbrook Variable Annuity II contract. If aggregate deposits are less
than $50,000 in the Morgan Stanley Dean Witter Variable Annuity II Asset
Manager contract, Northbrook Life will deduct an annual maintenance fee of
$35 on each contract anniversary.
4. FINANCIAL INSTRUMENTS
The investments of the Account are carried at fair value, based on quoted
market prices. Accrued contract maintenance charges are of a short-term
nature. It is assumed that their carrying value approximates fair value.
12
<PAGE>
<TABLE>
<CAPTION>
5. UNITS ISSUED AND REDEEMED
(Units in whole amounts)
Northbrook Variable Annuity II
Unit activity during 1998:
--------------------------------------
Units Units Accumulation
Outstanding Outstanding Unit Value
December Units Units December December
31, 1997 Issued Redeemed 31, 1998 31, 1998
----------- ----------- ----------- ----------- ------------
<S> <C> <C> <C> <C> <C>
Investments in the Morgan Stanley Dean Witter Variable
Investment Series Portfolios:
Money Market 18,622,471 29,618,231 (27,081,671) 21,159,031 $ 12.98
High Yield 8,795,791 2,662,861 (3,259,510) 8,199,142 24.66
Equity 13,509,402 2,779,303 (3,679,964) 12,608,741 50.02
Quality Income Plus 20,834,557 4,548,681 (5,071,041) 20,312,197 19.27
Strategist 16,149,246 2,137,422 (3,712,656) 14,574,012 26.88
Dividend Growth 39,664,627 5,856,411 (9,186,865) 36,334,173 36.73
Utilities 15,169,533 2,081,739 (3,709,730) 13,541,542 29.46
European Growth 9,762,952 3,453,911 (4,248,976) 8,967,887 34.08
Capital Growth 4,468,723 591,637 (1,397,402) 3,662,958 23.81
Global Dividend Growth 21,656,308 2,154,837 (6,176,673) 17,634,472 16.99
Pacific Growth 8,189,699 5,896,210 (7,759,942) 6,325,967 5.36
Capital Appreciation 1,609,271 675,388 (843,723) 1,440,936 10.15
Income Builder 2,364,018 1,697,157 (1,081,195) 2,979,980 12.30
Competitive Edge "Best Ideas" -- 2,229,816 (797,071) 1,432,745 9.73
S&P 500 Index -- 2,077,746 (355,037) 1,722,709 11.13
Investments in the Morgan Stanley Dean Witter
Universal Funds, Inc. Portfolios:
International Magnum -- 200,313 (63,685) 136,628 9.79
Emerging Markets Equity -- 133,597 (51,595) 82,002 7.10
Equity Growth -- 986,727 (164,689) 822,038 10.10
U.S. Real Estate -- 104,232 (24,503) 79,729 9.06
Investments in the Van Kampen Life Investment
Trust Portfolios:
Emerging Growth -- 343,599 (88,895) 254,704 12.00
</TABLE>
Units relating to accrued contract maintenance charges are included in units
redeemed.
13
<PAGE>
<TABLE>
<CAPTION>
5. UNITS ISSUED AND REDEEMED
(Units in whole amounts)
Northbrook Variable Annuity II with Death Benefit or
Peformance Income Benefit Option
Unit activity during 1998:
--------------------------------------
Units Units Accumulation
Outstanding Outstanding Unit Value
December Units Units December December
31, 1997 Issued Redeemed 31, 1998 31, 1998
----------- ----------- ----------- ----------- ------------
<S> <C> <C> <C> <C> <C>
Investments in the Morgan Stanley Dean Witter Variable
Investment Series Portfolios:
Money Market 5,406,811 21,513,035 (17,980,986) 8,938,860 $ 12.96
High Yield 3,843,598 3,574,266 (2,113,354) 5,304,510 24.56
Equity 5,455,102 4,060,420 (1,584,262) 7,931,260 49.82
Quality Income Plus 2,701,037 3,748,051 (1,339,495) 5,109,593 19.20
Strategist 3,529,251 2,975,852 (865,951) 5,639,152 26.78
Dividend Growth 13,969,794 9,295,313 (3,328,670) 19,936,437 36.59
Utilities 1,754,323 2,529,566 (773,386) 3,510,503 29.44
European Growth 3,091,241 3,420,945 (1,843,647) 4,668,539 33.94
Capital Growth 1,365,100 814,201 (491,454) 1,687,847 23.72
Global Dividend Growth 7,788,524 3,158,171 (2,016,791) 8,929,904 16.92
Pacific Growth 2,105,010 8,584,871 (8,233,030) 2,456,851 5.33
Capital Appreciation 1,147,553 1,051,403 (671,619) 1,527,337 10.12
Income Builder 2,025,367 2,373,888 (747,044) 3,652,211 12.27
Competitive Edge "Best Ideas" -- 2,682,216 (716,848) 1,965,368 9.72
S&P 500 Index -- 2,152,754 (149,453) 2,003,301 11.12
Investments in the Morgan Stanley Dean Witter
Universal Funds, Inc. Portfolios:
International Magnum -- 228,450 (57,553) 170,897 9.78
Emerging Markets Equity -- 147,831 (53,231) 94,600 7.09
Equity Growth -- 1,868,415 (337,596) 1,530,819 10.09
U.S. Real Estate -- 92,318 (11,536) 80,782 9.05
Investments in the Van Kampen Life Investment
Trust Portfolios:
Emerging Growth -- 502,151 (100,069) 402,082 11.98
</TABLE>
Units relating to accrued contract maintenance charges are included in units
redeemed.
14
<PAGE>
<TABLE>
<CAPTION>
5. UNITS ISSUED AND REDEEMED (Continued)
(Units in whole amounts)
Northbrook Variable Annuity II with Performance Income Benefit
and Performance Death Benefit
Morgan Stanley Dean Witter Variable Annuity II Asset Manager
Unit activity during 1998:
--------------------------------------
Units Units Accumulation
Outstanding Outstanding Unit Value
December Units Units December December
31, 1997 Issued Redeemed 31, 1998 31, 1998
----------- ----------- ----------- ----------- ------------
<S> <C> <C> <C> <C> <C>
Investments in the Morgan Stanley Dean Witter Variable
Investment Series Portfolios:
Money Market -- 1,644,566 (889,826) 754,740 $ 12.48
High Yield -- 273,602 (42,100) 231,502 17.98
Equity -- 278,757 (22,594) 256,163 43.83
Quality Income Plus -- 391,268 (43,470) 347,798 14.53
Strategist -- 564,092 (21,225) 542,867 24.30
Dividend Growth -- 729,569 (54,057) 675,512 30.37
Utilities -- 221,861 (15,643) 206,218 24.92
European Growth -- 234,177 (36,757) 197,420 30.72
Capital Growth -- 57,773 (9,695) 48,078 21.61
Global Dividend Growth -- 189,638 (17,977) 171,661 16.18
Pacific Growth -- 82,742 (28,808) 53,934 5.45
Capital Appreciation -- 98,642 (13,164) 85,478 9.96
Income Builder -- 213,958 (31,274) 182,684 11.99
Competitive Edge "Best Ideas" -- 236,351 (40,019) 196,332 9.70
S&P 500 Index -- 360,475 (41,570) 318,905 11.03
Investments in the Morgan Stanley Dean Witter
Universal Funds, Inc. Portfolios:
International Magnum -- 49,175 (10,653) 38,522 9.60
Emerging Markets Equity -- 29,155 (9,532) 19,623 7.09
Equity Growth -- 195,673 (27,114) 168,559 10.33
U.S. Real Estate -- 45,915 (5,428) 40,487 9.05
Investments in the Van Kampen Life Investment
Trust Portfolios:
Emerging Growth -- 115,373 (21,999) 93,374 12.35
</TABLE>
Units relating to accrued contract maintenance charges are included in units
redeemed.
15
<PAGE>
<TABLE>
<CAPTION>
5. UNITS ISSUED AND REDEEMED (Continued)
(Units in whole amounts)
Morgan Stanley Dean Witter Variable Annuity II Asset Manager
with Death Benefit or Performance Income Benefit Option
Unit activity during 1998:
--------------------------------------
Units Units Accumulation
Outstanding Outstanding Unit Value
December Units Units December December
31, 1997 Issued Redeemed 31, 1998 31, 1998
----------- ----------- ----------- ----------- ------------
<S> <C> <C> <C> <C> <C>
Investments in the Morgan Stanley Dean Witter Variable
Investment Series Portfolios:
Money Market -- 589,224 (503,397) 85,827 $ 10.15
High Yield -- 401,477 (363,262) 38,215 8.86
Equity -- 85,082 (4,965) 80,117 10.27
Quality Income Plus -- 56,800 (4,022) 52,778 10.35
Strategist -- 38,941 (14,885) 24,056 10.34
Dividend Growth -- 173,319 (7,329) 165,990 10.10
Utilities -- 35,912 (2,623) 33,289 10.90
European Growth -- 497,082 (290,652) 206,430 9.01
Capital Growth -- 5,156 (3) 5,153 9.70
Global Dividend Growth -- 39,005 (694) 38,311 9.88
Pacific Growth -- 299,447 (297,824) 1,623 10.99
Capital Appreciation -- 30,193 (1,781) 28,412 8.52
Income Builder -- 17,665 (833) 16,832 9.68
Competitive Edge "Best Ideas" -- 25,339 (532) 24,807 9.56
S&P 500 Index -- 109,657 (4,705) 104,952 10.38
Investments in the Morgan Stanley Dean Witter
Universal Funds, Inc. Portfolios:
International Magnum -- 9,577 (2) 9,575 8.76
Emerging Markets Equity -- 5,918 (1,993) 3,925 8.11
Equity Growth -- 18,569 (644) 17,925 9.88
U.S. Real Estate -- 17,480 (17) 17,463 9.11
Investments in the Van Kampen Life Investment
Trust Portfolios:
Emerging Growth -- 31,848 (797) 31,051 10.50
</TABLE>
Units relating to accrued contract maintenance charges are included in units
redeemed.
16
<PAGE>
<TABLE>
<CAPTION>
5. UNITS ISSUED AND REDEEMED (Continued)
(Units in whole amounts)
Morgan Stanley Dean Witter Variable Annuity II Asset Manager
with Performance Income Benefit and Performance Death Benefit
Unit activity during 1998:
--------------------------------------
Units Units Accumulation
Outstanding Outstanding Unit Value
December Units Units December December
31, 1997 Issued Redeemed 31, 1998 31, 1998
----------- ----------- ----------- ----------- ------------
<S> <C> <C> <C> <C> <C>
Investments in the Morgan Stanley Dean Witter Variable
Investment Series Portfolios:
Money Market -- 67,944 (52,888) 15,056 $ 10.14
High Yield -- 12,539 (1,140) 11,399 8.86
Equity -- 62,407 (31,801) 30,606 10.26
Quality Income Plus -- 81,104 (33) 81,071 10.35
Strategist -- 18,099 (10) 18,089 10.33
Dividend Growth -- 74,673 (15,719) 58,954 10.09
Utilities -- 19,656 (12) 19,644 10.89
European Growth -- 10,229 (8) 10,221 9.00
Capital Growth -- 12,471 (7) 12,464 9.70
Global Dividend Growth -- 14,658 (6) 14,652 9.88
Pacific Growth -- 4,550 -- 4,550 10.98
Capital Appreciation -- 11,988 (3) 11,985 8.51
Income Builder -- 3,159 (1) 3,158 9.67
Competitive Edge "Best Ideas" -- 12,372 (3) 12,369 9.56
S&P 500 Index -- 41,707 (10) 41,697 10.37
Investments in the Morgan Stanley Dean Witter
Universal Funds, Inc. Portfolios:
International Magnum -- -- -- -- --
Emerging Markets Equity -- 4,236 (1) 4,235 8.11
Equity Growth -- -- -- -- --
U.S. Real Estate -- -- -- -- --
Investments in the Van Kampen Life Investment
Trust Portfolios:
Emerging Growth -- 27,037 (7) 27,030 10.50
</TABLE>
Units relating to accrued contract maintenance charges are included in units
redeemed.
17
<PAGE>
PART C
OTHER INFORMATION
24. FINANCIAL STATEMENTS AND EXHIBITS
(a) FINANCIAL STATEMENTS
Northbrook Life Insurance Company Financial Statements and Financial Schedule
and Northbrook Variable Annuity Account II Financial Statements are included in
Part B of this Registration Statement.
(b) EXHIBITS
(1) Resolution of the Board of Directors of Northbrook Life Insurance Company
authorizing establishment of the Variable Annuity Account II (Previously
filed in Post-Effective Amendment No. 13 to this Registration Statement
(File No. 033-35412) dated December 31, 1996.)
(2) Not applicable
(3)(a) Form of Underwriting Agreement (Previously filed in Post-Effective
Amendment No. 13 to this Registration Statement (File No. 033-35412) dated
December 31, 1996.)
(b) Form of General Agency Agreement (Previously filed in Post-Effective
Amendment No. 13 to this Registration Statement (File No. 033-35412) dated
December 31, 1996.)
(4)(a) Form of Contract and Certificate Amendments for the Morgan Stanley Dean
Witter Variable Annuity II (Previously filed in Post-Effective Amendment
Nos. 13, 14 and 20 to this Registration Statement (File No. 033-35412)
dated December 31, 1996 and February 28, 1997 and March 3, 1999
respectively.)
(b) Form of Contract and Certificate Amendments for the Morgan Stanley Dean
Witter Variable Annuity II AssetManager (Previously filed in Post-Effective
Amendment Nos. 19 and 20 to this Registration Statement (File No.
033-35412) dated June 5, 1998 and March 3, 1999 respectively.)
(c) Form of Contract and Certificate Amendments for the Preferred Client
Variable Annuity filed herewith.
(5)(a) Form of Application for the Morgan Stanley Dean Witter Variable Annuity
II(Previously filed in Post-Effective Amendment No. 13 to this
Registration Statement (File No. 033-35412) dated December 31, 1996.
(b) Form of Application for a the Morgan Stanley Dean Witter Variable
Annuity II AssetManager (Previously filed in Post-Effective Amendment
No. 19 to this Registration Statement (File No. 033-35412) dated
June 5, 1998.)
(c) Form of Application for the Morgan Stanley Dean Witter Preferred Client
Variable Annuity, filed herewith.
(6)(a) Amended and Restated Articles of Incorporation and Articles of
Redomestication of Northbrook Life Insurance Company (Incorporated herein
by reference to Depositor's Form 10-K dated March 30, 1999.)
(b) Amended and Restated By-laws of Northbrook Life Insurance Company
(Incorporated herein by reference to Depositor's Form 10-K dated March 30,
1999.)
(7) Not applicable
(8) Form of Participation Agreement (Previously filed in Post-Effective
Amendment No. 12 to this Registration Statement (File No. 033-35412) dated
April 29, 1996.)
(9)(a) Opinion and Consent of General Counsel (Previously filed in
Post-Effective Amendment No. 19 to this Registration Statement (File No.
033-35412) dated June 5, 1998.)
(b) Opinion and Consent of General Counsel (Previously filed in
Post-Effective Amendment No. 21 to this Registration Statement (File No.
033-35412) dated April 30, 1999.)
(c) Opinion and Consent of Michael J. Velotta, Vice President, Secretary and
General Counsel of Northbrook Life Insurance Company, filed herewith.
(10)(a) Independent Auditors' Consent, filed herewith.
(b) Consent of Attorneys, filed herewith
(11) Not applicable
(12) Not applicable
(13)(a) Performance Data Calculations (Previously filed in Post-Effective
Amendment No. 17 to this Registration Statement (File No. 033-35412) dated
March 5, 1998.)
(13)(b) Performance Data Calculations (Preferred Client Variable Annuity)
(14) Not applicable
(99)(a) Power of Attorney for Casey J. Sylla (Previously filed in Post-Effective
Amendment No. 12 to this Registration Statement (File No. 033-35412) dated
April 29, 1996.)
(b) Power of Attorney for Kevin R. Slawin (Previously filed in
Post-Effective Amendment No. 13 to this Registration Statement (File No.
033-35412) dated December 31, 1996.)
(c) Powers of Attorney for Louis G. Lower, II, Michael J. Velotta, Thomas J.
Wilson and John R. Hunter (Previously filed in Post-Effective Amendment No.
21 to this Registration Statement (File No. 033-35412) dated May 30, 1999.)
(d) Power of Attorney for Samuel H. Pilch, filed herewith.
25. DIRECTORS AND OFFICERS OF THE DEPOSITOR
<TABLE>
<CAPTION>
NAME AND PRINCIPAL POSITION AND OFFICE WITH
BUSINESS ADDRESS DEPOSITOR OF THE ACCOUNT
<S> <C>
Louis G. Lower, II Chairman of the Board, Chief Executive Officer
Thomas J. Wilson, II Director, President and Chief Operating Officer
Michael J. Velotta Director, Vice President, Secretary and General Counsel
Sarah R. Donahue Director and Assistant Vice President
John R. Hunter Director and Assistant Vice President
Kevin R. Slawin Director and Vice President
Casey J. Sylla Director and Chief Investment Officer
Timothy N. Vander Pas Director and Assistant Vice President
Marla G. Friedman Vice President
Karen C. Gardner Vice President
James P. Zils Treasurer
Samuel H. Pilch Controller
Ronald Johnson Assistant Vice President
Barry S. Paul Assistant Vice President
Robert N. Roeters Assistant Vice President
C. Nelson Strom Assistant Vice President and Corporate Actuary
Charles F. Thalheimer Assistant Vice President
Timothy N. Vander Pas Assistant Vice President
Patricia W. Wilson Assistant Vice President, Assistant Secretary and Assistant Treasurer
Joanne M. Derrig Assistant Secretary and Chief Compliance Officer
Emma M. Kalaidjian Assistant Secretary
Paul N. Kierig Assistant Secretary
Mary J. McGinn Assistant Secretary
Gregory C. Sernett Assistant Secretary
Nancy M. Bufalino Assistant Treasurer
</TABLE>
The principal business address of the foregoing officers and directors is 3100
Sanders Road, Northbrook, Illinois 60062.
26. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH DEPOSITOR OR REGISTRANT
Incorporated herein by reference to Annual Report on Form 10-K, filed by the
Allstate Corporation on March 26, 1999 (File No. 1-11840).
27. NUMBER OF CONTRACT OWNERS
Variable Annuity II
As of November 1, 1999, there were 75,000 nonqualified contracts and 20,000
qualified contracts.
Variable Annuity II AssetManager
As of November 1, 1999, there were 450 nonqualified contracts and 50 qualified
contracts.
Preferred Client Variable Annuity
As of the date of the filing of this Registration Statement, the offering of the
Preferred Client Variable Annuity had not commenced.
28. INDEMNIFICATION
The General Agency 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 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 by such director, officer
or controlling person in connection with the securities being registered, the
registrant will, unless in the opinion of is counsel the matter has been settled
by controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of such
issue.
29. PRINCIPAL UNDERWRITERS
(a) Registrant's principal underwriter, Dean Witter Reynolds Inc., is the
principal underwriter for the following affiliated investment companies:
Northbrook Variable Annuity Account
Northbrook Life Variable Life Separate Account A
Allstate Life of New York Variable Annuity Account
Allstate Life of New York Variable Annuity Account II
(b) The directors and principal officers of the principal underwriter are:
<TABLE>
<CAPTION>
Name and Principal Business Positions and Offices
Address* of Each Such Person with Underwriter
<S> <C>
Philip J. Purcell Director, Chairman and Chief Executive Officer
Richard M. DeMartini Director, President and Chief Operating Officer - Dean Witter Capital
James F. Higgins Director, President and Chief Operating Officer - Dean Witter Financial
Stephen R. Miller Director and Senior Executive Vice President
Mitchell M. Merin Director, Executive Vice President and Chief Administrative Officer
Michael H. Stone Executive Vice President and Secretary
Raymond J. Drop Executive Vice President
Fredrick J. Frohne Executive Vice President
E. Davisson Hardman, Jr. Executive Vice President
Jeremiah A. Mullins Executive Vice President
John H. Schaefer Executive Vice President
Robert B. Sculthorpe Executive Vice President
Thomas C. Schneider Executive Vice President
William B. Smith Executive Vice President
Ronald T. Carman Senior Vice President, Associate General Counsel and
Assistant Secretary
Paul J. Dubow Senior Vice President and Deputy General Counsel
Alexander C. Frank Senior Vice President
Michael T. Gregg Senior Vice President and Deputy General Counsel
Joseph G. Siniscalchi Senior Vice President and Controller, Dean Witter Financial
Kelly McNamara Corley Senior Vice President and Director of Governmental Affairs
Charles F. Vadala, Jr. Senior Vice President and Chief Financial Officer
Anthony Basile Senior Vice President
Michael T. Cunningham Senior Vice President
Mary E. Curran Senior Vice President
Lorena J. Kern Senior Vice President
George R. Ross Senior Vice President
Debra M. Aaron Vice President
Darlene R. Lockhart Vice President
Harvey B. Mogenson Vice President
Kevin Mooney Vice President
Saul Rosen Vice President
Frank G. Skubic Vice President
Eileen S. Wallace Vice President
Michael D. Browne Assistant Secretary
Marilyn K. Cranney Assistant Secretary
Sabrina Hurley Assistant Secretary
Joyce L. Kramer Assistant Secretary
Bruce F. Alonso Director
John J. Mack Director
Alan A. Schroder Director
Robert G. Scott Director
</TABLE>
* The principal business address of the above-named individuals is Two World
Trade Center, New York, New York 10048.
(c) Compensation of Dean Witter Reynolds Inc.
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>
<S> <C> <C> <C> <C>
(1) (2) (3) (4) (5)
Net Underwriting
Name of Principal Discounts and Compensation on Brokerage
Underwriter Commissions Redemption Commissions Compensation
Dean Witter Reynolds N/A N/A $41,375,479.11 N/A
Inc.
</TABLE>
30. LOCATION OF ACCOUNTS AND RECORDS
The Depositor, Northbrook Life Insurance Company, is located at 3100 Sanders
Road, Northbrook, Illinois 60062. The Distributor, Dean Witter Reynolds Inc., is
located at Two World Trade Center, New York, New York 10048.
Each company maintains those accounts and records required to be maintained
pursuant to Section 31(a) of the Investment Company Act and the rules
promulgated thereunder.
31. MANAGEMENT SERVICES
None
32. UNDERTAKINGS
The Registrant undertakes to file a post-effective amendment to the 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 prospectus or
application to purchase a contract offered by the prospectus, a toll-free number
that an applicant can call to request a Statement of Additional Information or a
post card or similar written communication that the applicant can remove to send
for a Statement of Additional Information. Finally, the Registrant agrees to
deliver any Statement of Additional Information and any Financial Statements
required to be made available under this Form N-4 promptly upon written or oral
request.
REPRESENTATIONS PURSUANT TO SECTION 403(B) OF THE INTERNAL
REVENUE CODE
The 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 and that the provisions of paragraphs 1-4 of the no-action letter have
been complied with.
REPRESENTATION REGARDING CONTRACT EXPENSES
Northbrook Life Insurance Company represents that the fees and charges deducted
under the Individual and Group Variable Annuity Contracts hereby registered by
this Registration Statement, in the aggregate, are reasonable in relation to the
services rendered, the expenses expected to be incurred, and the risks assumed
by Northbrook Life Insurance Company.
<PAGE>
SIGNATURES
As required by the Securities Act of 1933 and the Investment Company Act of
1940, the Registrant, Northbrook Variable Annuity Account II, has caused this
amended Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, and its seal to be hereunto affixed and attested, all
in the Township of Northfield, State of Illinois, on the 3rd day of November,
1999.
NORTHBROOK VARIABLE ANNUITY ACCOUNT II
(REGISTRANT)
BY: NORTHBROOK LIFE INSURANCE COMPANY
(DEPOSITOR)
(SEAL)
By: /s/MICHAEL J. VELOTTA
----------------------
Michael J. Velotta
Vice President, Secretary and
General Counsel
As required by the Securities Act of 1933, this amended Registration Statement
has been duly signed below by the following Directors and Officers of Northbrook
Life Insurance Company on the 3rd day of November, 1999.
*/LOUIS G. LOWER, II Chairman of the Board, Chief
Louis G. Lower, II Executive Officer and Director
(Principal Executive Officer)
/s/MICHAEL J. VELOTTA Vice President, Secretary, General
Michael J. Velotta Counsel and Director
*/THOMAS J. WILSON, II Vice Chairman and Director
Thomas J. Wilson, II (Principal Operating Officer)
*/JOHN R. HUNTER Director
John R. Hunter
*/KEVIN R. SLAWIN Vice President and Director
Kevin R. Slawin (Principal Financial Officer)
*/CASEY J. SYLLA Chief Investment Officer and Director
Casey J. Sylla
**/SAMUEL H. PILCH Controller
Samuel H. Pilch (Principal Accounting Officer)
*/ By Michael J. Velotta, pursuant to Powers of Attorney previously filed.
**/Power of Attorney for Samuel H. Pilch filed herewith.
<PAGE>
EXHIBIT INDEX
Exhibit Description
(4)(c) Form of Contract and Certificate Amendments
(5)(c) Form of Application for a Contract
(9)(c) Opinion and Consent of Michael J. Velotta, Vice
President, Secretary and General Counsel
(10)(a) Independent Auditors' Consent
(10)(b) Consent of Attorneys
(13)(b) Performance Data Calculations
(99)(d) Power of Attorney for Samuel H. Pilch
Exhibit 4(c)
DPN905
- ------------------------------------------------------------------------------
ANNUITY DATA
- ------------------------------------------------------------------------------
CERTIFICATE NUMBER:..........................................444444444
ISSUE DATE:..........................................November 15, 1999
INITIAL PURCHASE PAYMENT:...................................$20,000.00
IRA
INITIAL ALLOCATION OF PURCHASE PAYMENT:
ALLOCATED
AMOUNT (%)
VARIABLE SUB-ACCOUNTS
Sub-account A 20%
Sub-account B 20%
Sub-account C 20%
Sub-account D 10%
RATE
ALLOCATED GUARANTEED GUARANTEED
AMOUNT(%) INTEREST RATE THROUGH
DOLLAR COST AVERAGING FIXED ACCOUNT
1 Year Guarantee Period 10% 5.00% 11/15/2000
MINIMUM GUARANTEED RATE FOR FIXED ACCOUNT OPTIONS:...................3.00%
PAYOUT START DATE:.......................................November 15, 2054
(Latest date when income payments must begin.)
OWNER:............................................................John Doe
..................................................................Jane Doe
ANNUITANT:........................................................John Doe
AGE AT ISSUE:...................................................35
SEX:..........................................................Male
BENEFICIARY PERCENTAGE
Jane Doe 100%
CONTINGENT BENEFICIARY PERCENTAGE
June Doe 100%
<PAGE>
NLU905
- ------------------------------------------------------------------------------
THE PERSONS INVOLVED
- ------------------------------------------------------------------------------
Owner The person named at the time of application is the owner of this
Certificate unless subsequently changed. As owner, you will receive any periodic
income payments, unless you have directed us to pay them to someone else.
You may exercise all rights stated in this Certificate, subject to the rights of
any irrevocable Beneficiary.
You may change the owner or Beneficiary at any time. If the Owner is a Natural
Person, you may change the Annuitant prior to the Payout Start Date. Once we
have received a satisfactory written request for an owner, Beneficiary, or
Annuitant change, the change will take effect as of the date you signed it. We
are not liable for any payment we make or other action we take before receiving
any written request for a change from you.
You may not assign an interest in this Certificate as collateral or security for
a loan. However, you may assign periodic income payments under this Certificate
prior to the Payout Start Date. We are bound by an assignment only if it is
signed by the assignor and filed with us. We are not responsible for the
validity of an assignment.
If the sole surviving Owner dies prior to the Payout Start Date, the Beneficiary
becomes the new Owner. If the sole surviving Owner dies after the Payout Start
Date, the Beneficiary becomes the new Owner and will receive any subsequent
guaranteed income payments.
If more than one person is designated as Owner:
|X| "Owner", as used in this Certificate, refers to all people named as Owners,
unless otherwise indicated;
|X| any request to exercise ownership rights must be signed by all Owners; and
|X| on the death of any person who is an Owner, the surviving person(s) named
as Owner will continue as Owner.
Annuitant The Annuitant is the person named on the Annuity Data Page, but may be
changed by the Owner, as described above. The Annuitant must be a living
individual. If the Annuitant dies prior to the Payout Start Date, the new
Annuitant will be:
|X| the youngest Owner; otherwise,
|X| the youngest Beneficiary.
Beneficiary The Beneficiary is the person(s) named on the Annuity Data Page, but
may be changed by the Owner, as described above. We will determine the
Beneficiary from the most recent written request we have received from you. If
you do not name a Beneficiary, or if the Beneficiary named is no longer living,
the Beneficiary will be:
|X| your spouse, if living; otherwise
|X| your living children, if any, equally; otherwise
|X| your estate.
The Beneficiary may become the Owner under the circumstances described in the
Owner provision above.
The Beneficiary may assign benefits under the Certificate, as described above,
once they are payable to the Beneficiary. We are bound by an assignment only if
it is signed by the assignor and filed with us. We are not responsible for the
validity of an assignment.
<PAGE>
Natural Person As used in this Certificate, "Natural Person" means a living
individual or trust entity that is treated as an individual for Federal Income
Tax purposes under the Internal Revenue Code.
- ------------------------------------------------------------------------------
ACCUMULATION PHASE
- ------------------------------------------------------------------------------
Accumulation Phase Defined The "Accumulation Phase" is the first of two phases
during your Certificate. The Accumulation Phase begins on the issue date of the
Certificate stated on the Annuity Data Page. This phase will continue until the
Payout Start Date unless the Certificate is terminated before that date.
Certificate Year "Certificate Year" is a one year period beginning on the issue
date of the Certificate and on each anniversary of the issue date.
Purchase Payments The initial purchase payment is shown on the Annuity Data
Page. You may make subsequent purchase payments during the Accumulation Phase.
The number of purchase payments is unlimited. The minimum subsequent purchase
payment amount is $100. We reserve the right to reduce the minimum purchase
payment amount. We may limit the maximum amount of purchase payments we will
accept.
We will invest the purchase payments in the Investment Alternatives you select.
You may allocate any portion of your purchase payment in whole percents from 0%
to 100% to any of the Investment Alternatives. The total allocation must equal
100%.
The allocation of the initial purchase payment is shown on the Annuity Data
Page. Allocation of each subsequent purchase payment will be the same as the
allocation for the most recent purchase payment unless you change the
allocation. You may change the allocation of subsequent purchase payments at any
time, without charge, simply by giving us written notice. Any change will be
effective at the time we receive the notice and will reflect the next computed
price.
Investment Alternatives The "Investment Alternatives" are the Sub-accounts of
the Variable Account and the Dollar Cost Averaging Fixed Account shown on the
application. We reserve the right to limit the availability of the Investment
Alternatives.
Variable Account The "Variable Account" for this Certificate is the Northbrook
Variable Annuity Account II. This account is a separate investment account to
which we allocate assets contributed under this and certain other certificates
and contracts. These assets will not be charged with liabilities arising from
any other business we may have.
Variable Sub-accounts The Variable Account is divided into Sub-accounts. Each
Sub-account invests solely in the shares of the mutual fund underlying that
Sub-account.
Dollar Cost Averaging Fixed Account Purchase payments may be allocated to the
Dollar Cost Averaging Fixed Account. Transfers are not allowed into the Dollar
Cost Averaging Fixed Account. Money in the Dollar Cost Averaging Fixed Account
will earn interest at the annual rate in effect at the time of allocation to the
Dollar Cost Averaging Fixed Account. After the one year period, a renewal rate
will be declared. Subsequent renewal dates will be every twelve months for each
purchase payment. Crediting rates for the Dollar Cost Averaging Fixed Account
will never be less than 3% annually.
<PAGE>
Transfers Prior to the Payout Start Date, you may transfer amounts among
Investment Alternatives. You may make 12 transfers during each Certificate Year
without charge. While we do not currently charge a transfer fee, we reserve the
right to assess a fee after the 12th transfer. Transfers are subject to the
following restrictions.
|X| The minimum amount that may be transferred from an investment alternative
is $100; if the total amount in an investment alternative is less than
$100, then the entire amount may be transferred.
|X| No amount may be transferred into the Dollar Cost Averaging Fixed Account.
|X| Transfers from the Dollar Cost Averaging Fixed Account or the Dollar Cost
Averaging program do not count toward the 12 free transfers each year.
We reserve the right to limit transfer amounts among Sub-accounts of the
Variable Account if we determine, in our sole discretion, that the exercise of
that right by one or more Certificate Owners is, or would be, to the
disadvantage of other Certificate Owners. Transfer limitations could be applied
to transfers to or from some or all of the Sub-accounts and could include but
not be limited to:
|X| The requirement of a minimum time period between each transfer;
|X| Not accepting transfer requests of an agent acting under a
power-of-attorney on behalf of more than one Certificate Owner; or,
|X| Limiting the dollar amount that may be transferred between the Sub-accounts
by a Certificate Owner at any one time.
Such restrictions may be applied in any manner reasonably designed to prevent
any use of the transfer right which is considered by us to be to the
disadvantage of other Certificate Owners.
Cash Value On the issue date of the Certificate, the "Cash Value" is equal to
the initial purchase payment. After the issue date, the "Cash Value" is equal to
the sum of:
|X| the number of Accumulation Units you hold in each Sub-account of the
Variable Account multiplied by the Accumulation Unit Value for that
Sub-account on the most recent Valuation Date; plus
|X| the total value you have in the Dollar Cost Averaging Fixed Account.
If you withdraw the entire Cash Value, you may receive an amount less than the
Cash Value because income tax withholding and a premium tax charge may apply.
Valuation Period and Valuation Date A "Valuation Period" is the time interval
between the closing of the New York Stock Exchange on consecutive Valuation
Dates. A "Valuation Date" is any date the New York Stock Exchange is open for
trading except for days in which there is insufficient trading in the Variable
Account's portfolio securities such that the value of accumulation or annuity
units might not be materially affected by changes in the value of the portfolio
securities.
Accumulation Units and Accumulation Unit Value Amounts which you allocate to a
Sub-account of the Variable Account are used to purchase Accumulation Units in
that Sub-account. The Accumulation Unit Value for each Sub-account at the end of
any Valuation Period is calculated by multiplying the Accumulation Unit Value at
the end of the immediately preceding Valuation Period by the Sub-account's Net
Investment Factor for the Valuation Period. The Accumulation Unit Values may go
up or down. Additions or transfers to a Sub-account of the Variable Account will
increase the number of Accumulation Units for that Sub-account. Withdrawals or
transfers from a Sub-account of the Variable Account will decrease the number of
Accumulation Units for that Sub-account.
<PAGE>
Net Investment Factor For each Sub-account of the Variable Account, the "Net
Investment Factor" for a Valuation Period is (A) divided by (B), minus (C)
where:
(A) is the sum of:
(1) the net asset value per share of the mutual fund 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 mutual fund underlying the
Sub-account during the current Valuation Period.
(B) is the net asset value per share of the mutual fund underlying the
Sub-account determined as of the end of the immediately preceding
Valuation Period.
(C) is the sum of the annualized Administrative Expense Charge and the
annualized Mortality and Expense Risk Charge divided by the number of
days in the current calendar year and then multiplied by the number of
calendar days in the current Valuation Period.
Charges The charges for this Certificate include Administrative Expense Charges,
Mortality and Expense Risk Charges, transfer fees, and taxes.
Administrative Expense Charge The annualized Administrative Expense Charge will
never be greater than 0.10%. (See Net Investment Factor for a description of how
this charge is applied.)
Mortality and Expense Risk Charge The annualized Mortality and Expense Risk
Charge will never be greater than 0.60%. (See Net Investment Factor for a
description of how this charge is applied.)
Our actual mortality and expense experience will not adversely affect the dollar
amount of variable benefits or other contractual payments or values under this
Certificate.
Taxes Any premium tax or income tax withholding relating to this Certificate may
be deducted from purchase payments or the Cash Value when the tax is incurred or
at a later time.
Withdrawal You have the right to withdraw part or all of your Cash Value at any
time during the Accumulation Phase. A withdrawal must be at least $500. If any
withdrawal reduces the Cash Value to less than $1,000, we will treat the request
as a withdrawal of the entire Cash Value. If you withdraw the entire Cash Value,
the Certificate will terminate.
You must specify the Investment Alternative(s) from which you wish to make a
withdrawal. When you make a withdrawal, your Cash Value will be reduced by the
amount paid to you and any applicable taxes.
Death of Owner If you die prior to the Payout Start Date, the new Owner will be
the surviving Owner. If there is no surviving Owner, the new Owner will be the
Beneficiary(ies). The new Owner will have the options described below:
1. If the sole new Owner is your spouse:
a. Your spouse may elect, within 180 days of the date of your death, to
receive the Death Benefit described below in a lump sum.
<PAGE>
b. Your spouse may elect, within 180 days of the date of your death, to
receive an amount equal to the Death Benefit paid out under one of the
Income Plans described in the Payout Phase section. The Payout Start
Date must be within one year of your date of death. Income Payments
must be:
i. over the life of your spouse; or
ii. for a guaranteed number of payments from 5 to 30 years but not to
exceed the life expectancy of your spouse.
c. If your spouse does not elect one of the options above, then the
Certificate continues as if the death had not occurred. All ownership
rights under the Certificate are then available to your spouse as the
new Owner. Within one year of your death, your spouse may take one
withdrawal without incurring a Withdrawal Charge. The amount which may
be withdrawn is limited only by the amount of the available Death
benefit.
2. If the new Owner is not your spouse but is a natural person, then this new
Owner has the following options:
a. The new Owner may elect, within 180 days of the date of your death, to
receive the death benefit described below in a lump sum.
b. The new Owner may elect, within 180 days of the date of your death, to
receive an amount equal to the Death Benefit paid out under one of the
Income Plans described in the Payout Phase section. The Payout Start
Date must be within one year of your date of death. Income Payments
must be:
i. over the life of the new Owner; or
ii. for a guaranteed number of payments from 5 to 30 years but not to
exceed the life expectancy of the new Owner.
c. The new Owner may elect to receive the Settlement Value payable in a
lump sum within 5 years of your date of death.
3. If the new Owner is a corporation, trust, or other non-Natural Person:
a. The non-natural Owner may elect, within 180 days of your death, to
receive the Death Benefit in a lump sum.
b. The non-natural Owner may elect to receive the Settlement Value
payable in a lump sum within 5 years of your date of death.
If the new Owner who is not your spouse does not make one of the above described
elections, the Settlement Value must be withdrawn by the new Owner on or before
the mandatory distribution date 5 years after your date of death. Under any of
these options, all ownership rights are available to the new Owner from the date
of your death to the date on which the Death Benefit or Settlement Value is
paid. We reserve the right to extend beyond 180 days the period when we will pay
the Death Benefit.
Death of Annuitant If any Annuitant who is not also the Owner dies prior to the
Payout Start Date, the Owner must elect an applicable option listed below. If
the option selected is 1(a) or 1(b)(ii) below, the new Annuitant will be the
youngest Owner, unless the Owner names a different Annuitant.
1. If the Owner is a Natural Person:
a. The Owner may choose to continue this Certificate as if the death had
not occurred; or
b. If we receive due proof of death within 180 days of the date of the
Annuitant's death, then the Owner may alternatively choose to:
<PAGE>
i. Receive the Death Benefit in a lump sum; or
ii. Apply the Death Benefit to an Income Plan which must begin within
one year of the date of death and must be for a guaranteed number
of payments for a period from 5 to 30 years but not to exceed the
life expectancy of the Owner.
2. If the Owner is a non-Natural Person:
a. The non-natural Owner may elect, within 180 days of the Annuitant's
date of death, to receive the Death Benefit in a lump sum; or
b. The non-natural Owner may elect to receive the Settlement Value
payable in a lump sum within 5 years of the Annuitant's date of death.
If the non-natural Owner does not make one of the above described elections, the
Settlement Value must be withdrawn by the non-natural Owner on or before the
mandatory distribution date 5 years after the Annuitant's death.
Under any of these options, all ownership rights are available to the Owner from
the date of the Annuitant's death to the date on which the Death Benefit or
Settlement Value is paid. We reserve the right to extend beyond 180 days the
period when we will pay the Death Benefit.
Death Benefit Prior to the Payout Start Date, the Death Benefit is equal to the
greatest of the following Death Benefit alternatives:
|X| the sum of all purchase payments less any withdrawals; or
|X| the Cash Value on the date we determine the Death Benefit; or
|X| the Cash Value on the most recent Death Benefit Anniversary prior to
the date we determine the Death Benefit, increased by any purchase
payments and reduced by any withdrawals made since that Death Benefit
Anniversary.
Death Benefit Anniversaries are those Certificate anniversaries that are
multiples of 6 Certificate Years, beginning with the 6th Certificate
anniversary. For example, the 6th, 12th, and 18th Certificate anniversaries are
the first three Death Benefit Anniversaries.
We will determine the value of the Death Benefit as of the end of the Valuation
Period during which we receive a complete request for payment of the Death
Benefit. A complete request includes due proof of death.
Settlement Value The Settlement Value is the same amount that would be paid in
the event of a full withdrawal of the Cash Value. We will calculate the
Settlement Value at the end of the Valuation Period coinciding with the
requested distribution date for payment or on the mandatory distribution date 5
years after the date of death, whichever is earlier.
- ------------------------------------------------------------------------------
PAYOUT PHASE
- ------------------------------------------------------------------------------
Payout Phase Defined The "Payout Phase" is the second of the two phases during
your Certificate. During this phase the Cash Value less any applicable taxes is
applied to the Income Plan you choose and is paid out as provided in that plan.
The Payout Phase begins on the Payout Start Date. It continues until we make the
last payment as provided by the Income Plan chosen.
<PAGE>
Payout Start Date The "Payout Start Date" is the date the Cash Value less any
applicable taxes is applied to an Income Plan. The anticipated Payout Start Date
is shown on the Annuity Data Page. You may change the Payout Start Date by
writing to us at least 30 days prior to this date.
The Payout Start Date must be on or before the later of:
|X| the Annuitant's 90th birthday; or
|X| the 10th anniversary of the Certificate's issue date.
Income Plans An "Income Plan" is a series of payments on a scheduled basis to
you or to another person designated by you. The Cash Value on the Payout Start
Date, less any applicable taxes, will be applied to your Income Plan choice from
the following list:
1. Life Income with Guaranteed Payments. We will make payments for as long
as the Annuitant lives. If the Annuitant dies before the selected
number of guaranteed payments have been made, we will continue to pay
the remainder of the guaranteed payments.
2. Joint and Survivor Life Income with Guaranteed Payments. We will make
payments for as long as either the Annuitant or joint Annuitant, named
at the time of Income Plan selection, lives. If both the Annuitant and
the joint Annuitant die before the selected number of guaranteed
payments have been made, we will continue to pay the remainder of the
guaranteed payments.
3. Guaranteed Number of Payments. We will make payments for a specified
number of months beginning on the Payout Start Date. These payments do
not depend on the Annuitant's life. The number of months guaranteed may
be from 60 to 360.
We reserve the right to make available other Income Plans.
Income Payments Income payment amounts may vary based on any Sub-account of the
Variable Account ("Variable Amount Income Payments"), may be fixed for the
duration of the Income Plan ("Fixed Amount Income Payments"), or both. The
method of calculating the initial payment is different for the two accounts.
Variable Amount Income Payments Variable Amount Income Payments will vary to
reflect the performance of the Variable Account. The portion of the initial
income payment based upon a particular Variable Sub-account is determined by
applying the amount of the Cash Value in that Sub-account on the Payout Start
Date, less any applicable premium tax, to the appropriate value from the Income
Payment Table. This portion of the initial income payment is divided by the
Annuity Unit Value on the Payout Start Date for that Variable Sub-account to
determine the number of Annuity Units from that Sub-account which will be used
to determine subsequent income payments. Unless transfers are made among
Sub-accounts of the Variable Account, each subsequent income payment from that
Sub-account will be that number of Annuity Units times the Annuity Unit Value
for the Sub-account for the Valuation Date on which the income payment is made.
Annuity Unit Value The Annuity Unit Value for each Sub-account of the Variable
Account at the end of any Valuation Period is calculated by:
|X| multiplying the Annuity Unit Value at the end of the immediately preceding
Valuation Period by the Sub-account's Net Investment Factor during the
period; and then
|X| dividing the result by 1.000 plus the assumed investment rate for the
period. The assumed investment rate is an effective annual rate of 3%. We
reserve the right to offer an assumed investment rate greater than 3%.
<PAGE>
Fixed Amount Income Payments The income payment amount derived from any money
allocated to the Fixed Account options during the Accumulation Phase are fixed
for the duration of the Income Plan. The Fixed Amount Income Payment is
calculated by applying the portion of the Cash Value in the Fixed Account
options on the Payout Start Date, less any applicable premium tax, to the
greater of the appropriate value from the Income Payment Table selected or such
other value as we are offering at that time.
Annuity Transfers After the Payout Start Date, no transfers may be made from the
Fixed Amount Income Payment. Transfers among Sub-accounts of the Variable
Account, or from the Variable Amount Income Payment to the Fixed Amount Income
Payment, may not be made for six months after the Payout Start Date. Transfers
may be made once every six months thereafter.
Payout Terms and Conditions The income payments are subject to the following
terms and conditions:
|X| If the Cash Value is less than $2,000, or not enough to provide an initial
payment of at least $20, we reserve the right to:
|X| change the payment frequency to make the payment at least $20; or
|X| terminate the Certificate and pay you the Cash Value, less any
applicable taxes, in a lump sum.
|X| If we do not receive a written choice of an Income Plan from you at least
30 days before the Payout Start Date, the Income Plan will be Life Income
with Guaranteed Payments for 120 months.
|X| If you choose an Income Plan which depends on any person's life, we may
require:
|X| proof of age and sex before income payments begin; and
|X| proof that the Annuitant or joint Annuitant is still alive before we
make each payment.
|X| After the Payout Start Date, the Income Plan cannot be changed and
withdrawals cannot be made unless income payments are being made from the
Variable Account under Income Plan 3. You may terminate the income payments
being made from the Variable Account under Income Plan 3 at any time and
withdraw their value.
|X| If any Owner dies during the Payout Phase, the remaining income payments
will be paid to the successor Owner as scheduled, or if none, the
Beneficiary.
<PAGE>
- ------------------------------------------------------------------------------
INCOME PAYMENT TABLES
- ------------------------------------------------------------------------------
The initial income payment will be at least the amount based on the adjusted age
of the Annuitant(s) and the tables below, less any federal income taxes which
are withheld. The adjusted age is the actual age on the Payout Start Date
reduced by one year for each six full years between January 1, 1983 and the
Payout Start Date. Income payments for ages and guaranteed payment periods not
shown below will be determined on a basis consistent with that used to determine
those that are shown. The Income Payment Tables are based on 3.0% interest and
the 1983a Annuity Mortality Tables.
<TABLE>
<CAPTION>
Income Plan 1 - Life Income with Guaranteed Payments for 120 Months
============================================================================================================================
Monthly Income Payment for each $1,000 Applied to this Income Plan
============================================================================================================================
- ------------------- ---------------------- ---------------- ---------------------- ---------------- ========================
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Annuitant's Annuitant's Age Annuitant's
Age Male Female Male Female Age Male Female
- ------------------- ---------------------- ---------------- ---------------------- ---------------- ========================
- ------------------- ---------------------- ---------------- ---------------------- ---------------- ========================
35 $3.43 $3.25 49 $4.15 $3.82 63 $5.52 $4.97
36 3.47 3.28 50 4.22 3.88 64 5.66 5.09
37 3.51 3.31 51 4.29 3.94 65 5.80 5.22
38 3.55 3.34 52 4.37 4.01 66 5.95 5.35
39 3.60 3.38 53 4.45 4.07 67 6.11 5.49
40 3.64 3.41 54 4.53 4.14 68 6.27 5.64
41 3.69 3.45 55 4.62 4.22 69 6.44 5.80
42 3.74 3.49 56 4.71 4.29 70 6.61 5.96
43 3.79 3.53 57 4.81 4.38 71 6.78 6.13
44 3.84 3.58 58 4.92 4.46 72 6.96 6.31
45 3.90 3.62 59 5.02 4.55 73 7.13 6.50
46 3.96 3.67 60 5.14 4.65 74 7.31 6.69
47 4.02 3.72 61 5.26 4.75 75 7.49 6.88
48 4.08 3.77 62 5.39 4.86
- ------------------- ---------------------- ---------------- ---------------------- ---------------- ========================
Income Plan 2 - Joint and Survivor Life Income with Guaranteed Payments for 120 Months
==============================================================================================================================
Monthly Income Payment for each $1,000 Applied to this Income Plan
==============================================================================================================================
- -------------------- =========================================================================================================
Female Annuitant's Age
- -------------------- =========================================================================================================
- -------------------- ---------- ------------ ----------- ---------- ---------- ---------- ---------- --------- ===============
Male
Annuitant's 35 40 45 50 55 60 65 70 75
Age
- -------------------- ---------- ------------ ----------- ---------- ---------- ---------- ---------- --------- ===============
- -------------------- ---------- ---------- ---------- ---------- ----------- ---------- ------------ ----------- =============
35 $3.09 $3.16 $3.23 $3.28 $3.32 $3.36 $3.39 $3.40 $3.42
40 3.13 3.22 3.31 3.39 3.46 3.51 3.56 3.59 3.61
45 3.17 3.28 3.39 3.50 3.60 3.69 3.76 3.81 3.85
50 3.19 3.32 3.45 3.60 3.74 3.87 3.98 4.07 4.14
55 3.21 3.35 3.51 3.68 3.87 4.06 4.23 4.37 4.48
60 3.23 3.37 3.55 3.75 3.98 4.23 4.47 4.70 4.88
65 3.24 3.39 3.57 3.80 4.07 4.37 4.71 5.04 5.34
70 3.24 3.40 3.59 3.83 4.13 4.48 4.90 5.36 5.81
75 3.25 3.41 3.61 3.86 4.17 4.56 5.04 5.61 6.22
- -------------------- ---------- ---------- ---------- ---------- ----------- ---------- ------------ ----------- =============
</TABLE>
<PAGE>
Income Plan 3 - Guaranteed Number of Payments
- --------------------------------- =============================================
Monthly Income Payment for each
Specified Period $1,000 Applied to this Income Plan
- --------------------------------- =============================================
- --------------------------------- =============================================
10 Years $9.61
11 Years 8.86
12 Years 8.24
13 Years 7.71
14 Years 7.26
15 Years 6.87
16 Years 6.53
17 Years 6.23
18 Years 5.96
19 Years 5.73
20 Years 5.51
- --------------------------------- =============================================
- ------------------------------------------------------------------------------
GENERAL PROVISIONS
- ------------------------------------------------------------------------------
The Entire Contract The entire contract consists of this Certificate, any
written application, and any Certificate amendments and riders.
All statements made in a written application are representations and not
warranties. No statement will be used by us in defense of a claim or to void the
Certificate unless it is included in a written application.
We may not modify this Certificate without your consent, except to make it
comply with any changes in the Internal Revenue Code or as required by any other
applicable law. Only our officers may change the Certificate. No other
individual may do this.
Master Policy Amendment or Termination The Master Policy may be amended by us,
terminated by us, or terminated by the Master Policyholder without the consent
of any other person. No termination completed after the issue date of this
Certificate will adversely affect your rights under this Certificate.
Incontestability We will not contest the validity of this Certificate after the
issue date.
Misstatement of Age or Sex If any age or sex has been misstated, we will pay the
amounts which would have been paid at the correct age and sex.
If we find the misstatement of age or sex after the income payments begin, we
will:
|X| pay all amounts underpaid including interest calculated at an effective
annual rate of 6%; or
|X| stop payments until the total payments are equal to the corrected amount.
Annual Statement At least once a year, prior to the Payout Start Date, we will
send you a statement containing Cash Value information. We will provide you with
Cash Value information at any time upon request. The information presented will
comply with any applicable law.
<PAGE>
Settlements We may require that this Certificate be returned to us prior to any
settlement. We must receive due proof of death of the Owner or Annuitant prior
to settlement of a death claim. Due proof of death is one of the following:
|X| a certified copy of a death certificate; or
|X| a certified copy of a decree of a court of competent jurisdiction as to a
finding of death; or
|X| any other proof acceptable to us.
Any full withdrawal or Death Benefit under this Certificate will not be less
than the minimum benefits required by any statute of the state in which the
Certificate is delivered.
Deferment of Payments We will pay any amounts due from the Variable Account
under this Certificate within seven days, unless:
|X| the New York Stock Exchange is closed for other than usual weekends or
holidays, or trading on such Exchange is restricted;
|X| an emergency exists as defined by the Securities and Exchange Commission;
or
|X| the Securities and Exchange Commission permits delay for the protection of
Certificate holders.
We reserve the right to postpone payments or transfers from the Fixed Account
options for up to six months. If we elect to postpone payments from the Fixed
Account options for 30 days or more, we will pay interest as required by
applicable law. Any interest would be payable from the date the withdrawal
request is received by us to the date the payment is made.
Variable Account Modifications We reserve the right, subject to applicable law,
to make additions to, deletions from, or substitutions for the mutual fund
shares underlying the Sub-accounts of the Variable Account. We will not
substitute any shares attributable to your interest in a Sub-account of the
Variable Account without notice to you and prior approval of the Securities and
Exchange Commission, to the extent required by the Investment Company Act of
1940, as amended.
We reserve the right to establish additional Sub-accounts of the Variable
Account, each of which would invest in shares of another mutual fund. You may
then instruct us to allocate purchase payments or transfers to such
Sub-accounts, subject to any terms set by us or the mutual fund.
In the event of any such substitution or change, we may by endorsement make such
changes as may be necessary or appropriate to reflect such substitution or
change.
If we deem it to be in the best interests of persons having voting rights under
the certificates, the Variable Account may be operated as a management company
under the Investment Company Act of 1940, as amended, or it may be deregistered
under such Act in the event such registration is no longer required.
<PAGE>
NLU905
Northbrook Life
Insurance Company
A Stock Company
Headquarters: 3100 Sanders Road Northbrook, IL 60062
Flexible Premium Deferred Variable Annuity Certificate
This Certificate is issued pursuant to the terms of Master Policy Number
64890022 issued by Northbrook Life Insurance Company to Dean Witter Reynolds
Inc., called the Master Policyholder. This Certificate is governed by Delaware
law.
Throughout this Certificate, "you" and "your" refer to the Certificate Owner(s).
"We", "us" and "our" refer to Northbrook Life Insurance Company.
Certificate Summary
This flexible premium deferred variable annuity provides a cash withdrawal
benefit and a death benefit during the Accumulation Phase and periodic income
payments beginning on the Payout Start Date during the Payout Phase.
The dollar amount of income payments or other values provided by this
Certificate, when based on the investment experience of the Variable Account,
will vary to reflect the performance of the Variable Account.
This Certificate does not pay dividends.
The tax status of this Certificate as it applies to the Owner should be reviewed
each year.
PLEASE READ YOUR CERTIFICATE CAREFULLY.
This is a legal contract between the Certificate Owner and Northbrook Life
Insurance Company.
Return Privilege
If you are not satisfied with this Certificate for any reason, you may return it
to us or our agent within 20 days after you receive it. We will refund any
purchase payments allocated to the Variable Account, adjusted to reflect
investment gain or loss from the date of allocation to the date of cancellation,
plus any purchase payments allocated to the Fixed Account. If this Certificate
is qualified under Section 408 of the Internal Revenue Code, we will refund the
greater of any purchase payments or the Certificate Value.
If you have any questions about your Northbrook Life variable annuity, please
contact Northbrook Life at (800) 654-2397.
Secretary Chief Executive Officer
<PAGE>
- --------------------------------------------------------------------------
TABLE OF CONTENTS
- --------------------------------------------------------------------------
THE PERSONS INVOLVED.............................................3
ACCUMULATION PHASE...............................................4
PAYOUT PHASE.....................................................9
INCOME PAYMENT TABLES...........................................11
GENERAL PROVISIONS..............................................12
Exhibit (5)(c)
PREFERRED CLIENT VA
FLEXIBLE PREMIUM DEFERRED VARIABLE ANNUITY
ISSUED BY: NORTHBROOK LIFE INSURANCE COMPANY, NORTHBROOK, ILLINOIS
PO Box 94040, Palatine, IL 60094-4040 Telephone: 1-800-654-2397
Overnight Address: 3100 Sanders Rd., M4A, Northbrook, IL 60062
- ------------------------------------------------------------------------------
OWNER(S) Name ________________ __ M __ F Birthdate ___/___/____
Address ________________________________ Soc. Sec. No.__ -__ - __
City State Zip
Name __________________ __ M __ F Birthdate ___/___/__
- ------------------------------------------------------------------------------
ANNUITANT Address _________________________ Soc. Sec. No.__ - __ - _
Leave blank if City State Zip
Annuitant is the
same as sole
Owner; otherwise
complete: Name ___________________ __ M __ F Birth ___/___/___
- ------------------------------------------------------------------------------
BENEFICIARY(IES) Address ______________________
City State Zip Soc. Sec. No. __-__-___
Relationship to Owner__________________________________________
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C> <C> <C>
PURCHASE PAYMENT/ Total Purchase Payment $_________________ MSDW Universal Funds
PLAN OPTIONS VARIABLE PORTFOLIO SELECTION _ Equity Growth ____%
MSDW Variable Investment Series _ International Magnum ____%
_ Money Market ____% _ Emerging Markets Equity ____%
_ Quality Income Plus ____% _ U.S. Real Estate ____%
_ High Yield ____%
_ Utilities ____% Van Kampen
_ Income Builder ____% _ Emerging Growth ____%
_ Dividend Growth ____%
_ Capital Growth ____% Fixed Account (if available)
_ Global Div. Growth ____% _ DCA Fixed Account ____%
_ European Growth ____% _ __________________
_ Pacific Growth ____% _ __________________ ____%
_ Equity ____% Total 100%
_ S&P 500 Index ____% -----
_ Competitive Edge ____% Plan Options (Choose one from options
_ Strategist ____% available in your state. If none is
_ Aggressive Equity ____% selected, base policy will apply):
_ Short-Term Bond ____%
_ Performance Death Benefit Option
(Highest Anniversary Value): or
_ Performance Income Benefit Option
(GuMBI); or
_ Performance Benefit Combination Option
(GuMBI Combination); or
</TABLE>
- ------------------------------------------------------------------------------
REPLACEMENT Will this annuity replace or change any existing annuity
INFORMATION or life insurance? _ Yes _ No (If Yes, complete the following.)
Company _____________________________ Policy No. ___________
Cost basis amount____________________ Policy Date __________
- ------------------------------------------------------------------------------
TAX QUALIFIED PLAN _ Yes _ No (If Yes, complete the following.)
__ Traditional IRA __ Roth IRA __ SEP __ Other _____
_ Rollover _ 401 (a) (pension)
_ Transfer _ 403 (b) (TSA)
_ Contribution $____ Contribution Year ______________
(attach Form 5305 for SEP)
- ----------------------------------------------------------------------------
SPECIAL INSTRUCTIONS ------------------------------------------------
------------------------------------------------
------------------------------------------------
- ----------------------------------------------------------------------------
<PAGE>
PREFERRED CLIENT VA
FLEXIBLE PREMIUM DEFERRED VARIABLE ANNUITY
ISSUED BY: NORTHBROOK LIFE INSURANCE COMPANY, NORTHBROOK, ILLINOIS
PO Box 94040, Palatine, IL 60094-4040 Telephone: 1-800-654-2397
Overnight Address: 3100 Sanders Rd., M4A, Northbrook, IL 60062
- ------------------------------------------------------------------------------
The following States require insurance applicants to acknowledge a
fraud warning/disclosure statement. Please refer to the fraud
warning/disclosure state for
- ------------------------------------------------------------------------------
FOR APPLICANTS Upon your written request we will provide you
IN ARIZONA: within a reasonable period of time, reasonable, factual
information regarding the benefits and provisions of the
annuity contract for which you are applying. If for any
reason you are not satisfied with the contract, you may
return the contract within twenty days after you receive
it. If the contract you are applying for is a variable
annuity, you will receive an amount equal to the
sum of (i) the difference between the premiums paid
and the amounts allocated to any account under the contract
and (ii) the contract Value on the date the returned
contract is received by our company or our agent.
- ------------------------------------------------------------------------------
FOR APPLICANTS Any person who knowingly and with intent to defraud any
IN ARKANSAS, insurance company or other person files an application
KENTUCKY, MAINE for insurance or statement of claim containing any
NEW MEXICO, OHIO materially false information or conceals, for the
OREGON & PENNSYLVANIA: purpose of misleading, information concerning any
fact material thereto commits a fraudulent insurance
act, which is a crime and subjects such person to
criminal and civil penalties.
- ------------------------------------------------------------------------------
FOR APPLICANTS It is unlawful to knowingly provide false, incomplete,
IN COLORADO: or misleading facts or information to an insurance
company for the purpose of defrauding or attempting to
defraud the company. Penalties may include imprisonment,
fines, denial of insurance, and civil damages. Any
insurance company or agent of an insurance company who
knowingly provides false, incomplete, or misleading facts
or information to a policy holder or claimant for the
purpose of defrauding or attempting to defraud the policy
holder or claimant with regard to a settlement or award
payable from insurance proceeds shall be reported to the
Colorado Division of Insurance within the Department of
Regulatory Agencies.
- ------------------------------------------------------------------------------
FOR APPLICANTS Any person who knowingly and with intent to injure,
IN FLORIDA: defraud, or deceive any insurer files a statement
of claim or an application containing any false,
incomplete, or misleading information is guilty of a
felony of the third degree.
- ------------------------------------------------------------------------------
FOR APPLICANTS Any person who knowingly presents a false or fraudulent
IN LOUISIANA: claim for payment of a loss or benefit or knowingly
presents false information in an application for
insurance is guilty of a crime and may be subject to
fines and confinement in prison.
- ------------------------------------------------------------------------------
FOR APPLICANTS Any person who includes any false or misleading
IN NEW JERSEY: information on an application for an insurance policy
is subject to criminal and civil penalties.
- ------------------------------------------------------------------------------
FOR APPLICANTS WARNING: It is a crime to provide false or misleading
IN WASHINGTON D.C.: information to an insurer for the purpose of defrauding
the insurer or any other person. Penalties include
imprisonment and/or fines. In addition, an insurer may
deny insurance benefits if false information materially
related to a claim was provided by the applicant.
- ------------------------------------------------------------------------------
SIGNATURE(S) A copy of this application signed by the
(contract applications Representative will be the receipt for the first
and certificate purchase payment. If Northbrook Life
enrollments are Insurance Company ("Northbrook Life") declines
referred to as this application, Northbrook Life will have no
aplications.) liability except to return the first purchase payment.
I have read the above statements and represent
that they are complete and true to the best of my
knowledge and belief. I agree that this application
shall be a part of the annuity issued by Northbrook
Life. By accepting the annuity issued, I agree
to any additions or corrections to this application.
Northbrook Life will obtain written agreement from me
for any change in the benefits, type of plan, or
birthdates.
I understand that annuity values and income payments
based on the investment experience of a separate
account are variable and not guaranteed as to
dollar amount. I acknowledge receipt of the
current prospectus for the Flexible Premium Deferred
Variable Annuity.
Signed at________________________Date_____/_____/_____
City State
Owner(s)______________________________________________
Annuitant_____________________________________________
- ------------------------------------------------------------------------------
REPRESENTATIVE Will the annuity applied for replace or change any
USE ONLY existing annuity or life insurance? _ Yes _ No
Rep Name (Please print)_____________________
Phone No. ( )___________________________
Rep Signature ______________________________
Branch/Rep No. _____________________________
FL License No. _____________________________
----------------------------------------------------------------------
NORTHBROOK LIFE INSURANCE COMPANY
LAW AND REGULATION DEPARTMENT
3100 Sanders Road, J5B
Northbrook, Illinois 60062
Direct Dial Number 847-402-2400
Facsimile 847-402-4371
Michael J. Velotta Please direct reply to:
Vice President, Secretary Post Office Box 3005
and General Counsel Northbrook, Illinois 60065-3005
November 4, 1998
TO: NORTHBROOK LIFE INSURANCE COMPANY
NORTHBROOK, ILLINOIS 60062
FROM: MICHAEL J. VELOTTA
VICE PRESIDENT, SECRETARY AND GENERAL COUNSEL
RE: FORM N-4 REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933 AND THE INVESTMENT COMPANY ACT OF
1940
FILE NO. 033-35412, 811-6116
With reference to the Registration Statement on Form N-4 filed by
Northbrook Life Insurance Company (the "Company"), as depositor, and Northbrook
Variable Annuity Account II, as registrant, with the Securities and Exchange
Commission covering the Flexible Premium Deferred Variable Annuity Contracts
(Preferred Client Variable annuity), I have examined such documents and such law
as I have considered necessary and appropriate, and on the basis of such
examination, it is my opinion that as of November 4, 1998:
1. The Company is duly organized and existing under the laws of the State of
Arizona and has been duly authorized to do business by the Director of
Insurance of the State of Arizona.
2. The securities registered by the above Registration Statement when issued
will be valid, legal and binding obligations of the Company.
I hereby consent to the filing of this opinion as an exhibit to the above
referenced Registration Statement and to the use of my name under the caption
"Legal Matters" in the Prospectus constituting a part of the Registration
Statement.
Sincerely,
/s/ MICHAEL J. VELOTTA
- -------------------------
Michael J. Velotta
Vice President, Secretary and
General Counsel
INDEPENDENT AUDITORS' CONSENT
We consent to the use in this Post-Effective No. 22 to Registration Statement
No. 033-35412 of Northbrook Variable Annuity Account II of Northbrook Life
Insurance Company on Form N-4 of our report dated February 19, 1999 relating to
the financial statements and the related financial statement schedule of
Northbrook Life Insurance Company, and our report dated March 18, 1999 relating
to the financial statements of Northbrook Variable Annuity Account II, appearing
in the Statement of Additional Information (which is incorporated by reference
in the Prospectus of Northbrook Variable Annuity Account II 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
November 9, 1999
Freedman, Levy, Kroll & Simonds
CONSENT OF
FREEDMAN, LEVY, KROLL & SIMONDS
We hereby consent to the reference to our firm under the caption "Legal
Matters" in the prospectus contained in Post-Effective Amendment No. 22 to the
Form N-4 Registration Statement of Northbrook Variable Annuity Account II (File
No. 033-35412).
/s/FREEDMAN, LEVY, KROLL & SIMONDS
Washington, D.C.
November 5, 1999
<TABLE>
<CAPTION>
NLIC VAII MONEY MARKET
30-Sep-98 NO. YEARS 1.000
TO
30-Sep-99
<S> <C> <C> <C> <C> <C> <C>
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-98 1000.00 9.638696 103.74847
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 103.74847 1037.4847
1.000
FORMULA: 1000*(1+T)= 1037.4847
= 1037.4847
T = 3.75%
R = 3.75%
NLIC VAII HIGH YIELD
9/30/98 NO. YEARS 1.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-98 1000.00 10.325800 96.84480
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 96.84480 968.4480
1.000
FORMULA: 1000*(1+T)= 968.4480
= 968.4480
T = -3.16%
R = -3.16%
NLIC VAII EQUITY
9/30/98 NO. YEARS 1.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-98 1000.00 7.422228 134.73043
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 134.73043 1347.3043
1.000
FORMULA: 1000*(1+T)= 1347.3043
= 1347.3043
T = 34.73%
R = 34.73%
NLIC VAII QUALITY INCOME
9/30/98 NO. YEARS 1.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-98 1000.00 10.471528 95.49705
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 95.49705 954.9705
1.000
FORMULA: 1000*(1+T)= 954.9705
= 954.9705
T = -4.50%
R = -4.50%
NLIC VAII STRATEGIST
9/30/98 NO. YEARS 1.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-98 1000.00 8.061858 124.04089
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 124.04089 1240.4089
1.000
FORMULA: 1000*(1+T)= 1240.4089
= 1240.4089
T = 24.04%
R = 24.04%
NLIC VAII DIVIDEND GROWTH
9/30/98 NO. YEARS 1.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-98 1000.00 9.152914 109.25483
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 109.25483 1092.5483
1.000
FORMULA: 1000*(1+T)= 1092.5483
= 1092.5483
T = 9.25%
R = 9.25%
NLIC VAII UTILITIES
9/30/98 NO. YEARS 1.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-98 1000.00 8.954733 111.67279
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 111.67279 1116.7279
1.000
FORMULA: 1000*(1+T)= 1116.7279
= 1116.7279
T = 11.67%
R = 11.67%
NLIC VAII EUROPEAN GROWTH
9/30/98 NO. YEARS 1.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-98 1000.00 8.400532 119.04009
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 119.04009 1190.4009
1.000
FORMULA: 1000*(1+T)= 1190.4009
= 1190.4009
T = 19.04%
R = 19.04%
NLIC VAII CAPITAL GROWTH
9/30/98 NO. YEARS 1.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-98 1000.00 8.400532 119.04009
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 119.04009 1190.4009
1.000
FORMULA: 1000*(1+T)= 1190.4009
= 1190.4009
T = 19.04%
R = 19.04%
NLIC VAII PACIFIC GROWTH
9/30/98 NO. YEARS 1.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-98 1000.00 5.878091 170.12326
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 170.12326 1701.2326
1.000
FORMULA: 1000*(1+T)= 1701.2326
= 1701.2326
T = 70.12%
R = 70.12%
NLIC VAII GLOBAL DIVIDEND GROWTH
9/30/98 NO. YEARS 1.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-98 1000.00 7.918273 126.29016
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 126.29016 1262.9016
1.000
FORMULA: 1000*(1+T)= 1262.9016
= 1262.9016
T = 26.29%
R = 26.29%
NLIC VAII CAPITAL APPRECIATION
9/30/98 NO. YEARS 1.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-98 1000.00 9.387763 106.52165
FEE 30-Sep-99 0 10.871412 0.00000
RESULTING VALUE 30-Sep-99 10.871412 106.52165 1158.0407
1.000
FORMULA: 1000*(1+T)= 1158.0407
= 1158.0407
T = 15.80%
R = 15.80%
NLIC VAII INCOME BUILDER
9/30/98 NO. YEARS 1.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-98 1000.00 9.073029 110.21677
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 110.21677 1102.1677
1.000
FORMULA: 1000*(1+T)= 1102.1677
= 1102.1677
T = 10.22%
R = 10.22%
NLIC VAII EQUITY GROWTH
9/30/98 NO. YEARS 1.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-98 1000.00 7.194676 138.99166
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 138.99166 1389.9166
1.000
FORMULA: 1000*(1+T)= 1389.9166
= 1389.9166
T = 38.99%
R = 38.99%
NLIC VAII INTERNATIONAL MAGNUM
9/30/98 NO. YEARS 1.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-98 1000.00 8.227234 121.54753
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 121.54753 1215.4753
1.000
FORMULA: 1000*(1+T)= 1215.4753
= 1215.4753
T = 21.55%
R = 21.55%
NLIC VAII EMERGING MARKETS
9/30/98 NO. YEARS 1.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-98 1000.00 6.800735 147.04292
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 147.04292 1470.4292
1.000
FORMULA: 1000*(1+T)= 1470.4292
= 1470.4292
T = 47.04%
R = 47.04%
NLIC VAII EMERGING GROWTH
9/30/98 NO. YEARS 1.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-98 1000.00 6.195375 161.41072
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 161.41072 1614.1072
1.000
FORMULA: 1000*(1+T)= 1614.1072
= 1614.1072
T = 61.41%
R = 61.41%
NLIC VAII REAL ESTATE
9/30/98 NO. YEARS 1.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-98 1000.00 10.122559 98.78925
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 98.78925 987.8925
1.000
FORMULA: 1000*(1+T)= 987.8925
= 987.8925
T = -1.21%
R = -1.21%
NLIC VAII COMPETITIVE EDGE
9/30/98 NO. YEARS 1.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-98 1000.00 8.023193 124.63865
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 124.63865 1246.3865
1.000
FORMULA: 1000*(1+T)= 1246.3865
= 1246.3865
T = 24.64%
R = 24.64%
NLIC VAII S&P 500 INDEX
9/30/98 NO. YEARS 1.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-98 1000.00 7.973747 125.41156
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 125.41156 1254.1156
1.000
FORMULA: 1000*(1+T)= 1254.1156
= 1254.1156
T = 25.41%
R = 25.41%
NLIC VAII AGGRESSIVE EQUITY
9/30/98 NO. YEARS 1.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-98 1000.00 #VALUE! #VALUE!
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 #VALUE! #VALUE!
1.000
FORMULA: 1000*(1+T)= #VALUE!
= #VALUE!
T = N/A
R = N/A
NLIC VAII SHORT TERM BOND
9/30/98 NO. YEARS 1.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-98 1000.00 #VALUE! #VALUE!
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 #VALUE! #VALUE!
1.000
FORMULA: 1000*(1+T)= #VALUE!
= #VALUE!
T = N/A
R = N/A
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
NLIC VAII MONEY MARKET
30-Sep-97 NO. YEARS 2.000
TO
30-Sep-99
<S> <C> <C> <C> <C> <C> <C>
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-97 1000.00 9.242908 108.19106
FEE 30-Sep-98 0 9.638696 0.00000
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 108.19106 1081.9106
2.000
FORMULA: 1000*(1+T)= 1081.9106
= 1081.9106
T = 4.01%
R = 8.19%
NLIC VAII HIGH YIELD
9/30/97 NO. YEARS 2.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-97 1000.00 10.884641 91.87258
FEE 30-Sep-98 0 10.325800 0.00000
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 91.87258 918.7258
2.000
FORMULA: 1000*(1+T)= 918.7258
= 918.7258
T = -4.15%
R = -8.13%
NLIC VAII EQUITY
9/30/97 NO. YEARS 2.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-97 1000.00 6.773091 147.64307
FEE 30-Sep-98 0 7.422228 0.00000
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 147.64307 1476.4307
2.000
FORMULA: 1000*(1+T)= 1476.4307
= 1476.4307
T = 21.51%
R = 47.64%
NLIC VAII QUALITY INCOME
9/30/97 NO. YEARS 2.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-97 1000.00 9.415878 106.20358
FEE 30-Sep-98 0 10.471528 0.00000
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 106.20358 1062.0358
2.000
FORMULA: 1000*(1+T)= 1062.0358
= 1062.0358
T = 3.06%
R = 6.20%
NLIC VAII STRATEGIST
9/30/97 NO. YEARS 2.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-97 1000.00 7.686847 130.09235
FEE 30-Sep-98 0 8.061858 0.00000
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 130.09235 1300.9235
2.000
FORMULA: 1000*(1+T)= 1300.9235
= 1300.9235
T = 14.06%
R = 30.09%
NLIC VAII DIVIDEND GROWTH
9/30/97 NO. YEARS 2.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-97 1000.00 9.123345 109.60892
FEE 30-Sep-98 0 9.152914 0.00000
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 109.60892 1096.0892
2.000
FORMULA: 1000*(1+T)= 1096.0892
= 1096.0892
T = 4.69%
R = 9.61%
NLIC VAII UTILITIES
9/30/97 NO. YEARS 2.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-97 1000.00 7.200240 138.88425
FEE 30-Sep-98 0 8.954733 0.00000
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 138.88425 1388.8425
2.000
FORMULA: 1000*(1+T)= 1388.8425
= 1388.8425
T = 17.85%
R = 38.88%
NLIC VAII EUROPEAN GROWTH
9/30/97 NO. YEARS 2.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-97 1000.00 8.115058 123.22771
FEE 30-Sep-98 0 8.400532 0.00000
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 123.22771 1232.2771
2.000
FORMULA: 1000*(1+T)= 1232.2771
= 1232.2771
T = 11.01%
R = 23.23%
NLIC VAII CAPITAL GROWTH
9/30/97 NO. YEARS 2.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-97 1000.00 8.115058 123.22771
FEE 30-Sep-98 0 8.400532 0.00000
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 123.22771 1232.2771
2.000
FORMULA: 1000*(1+T)= 1232.2771
= 1232.2771
T = 11.01%
R = 23.23%
NLIC VAII PACIFIC GROWTH
9/30/97 NO. YEARS 2.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-97 1000.00 11.485201 87.06857
FEE 30-Sep-98 0 5.878091 0.00000
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 87.06857 870.6857
2.000
FORMULA: 1000*(1+T)= 870.6857
= 870.6857
T = -6.69%
R = -12.93%
NLIC VAII GLOBAL DIVIDEND GROWTH
9/30/97 NO. YEARS 2.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-97 1000.00 8.729173 114.55838
FEE 30-Sep-98 0 7.918273 0.00000
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 114.55838 1145.5838
2.000
FORMULA: 1000*(1+T)= 1145.5838
= 1145.5838
T = 7.03%
R = 14.56%
NLIC VAII CAPITAL APPRECIATION
9/30/97 NO. YEARS 2.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-97 1000.00 12.364355 80.87765
FEE 30-Sep-98 0 9.387763 0.00000
FEE 30-Sep-99 0 10.871412 0.00000
RESULTING VALUE 30-Sep-99 10.871412 80.87765 879.2543
2.000
FORMULA: 1000*(1+T)= 879.2543
= 879.2543
T = -6.23%
R = -12.07%
NLIC VAII INCOME BUILDER
9/30/97 NO. YEARS 2.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-97 1000.00 9.466119 105.63991
FEE 30-Sep-98 0 9.073029 0.00000
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 105.63991 1056.3991
2.000
FORMULA: 1000*(1+T)= 1056.3991
= 1056.3991
T = 2.78%
R = 5.64%
NLIC VAII EQUITY GROWTH
9/30/97 NO. YEARS 2.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-97 1000.00 7.201128 138.86714
FEE 30-Sep-98 0 7.194676 0.00000
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 138.86714 1388.6714
2.000
FORMULA: 1000*(1+T)= 1388.6714
= 1388.6714
T = 17.84%
R = 38.87%
NLIC VAII INTERNATIONAL MAGNUM
9/30/97 NO. YEARS 2.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-97 1000.00 9.093364 109.97030
FEE 30-Sep-98 0 8.227234 0.00000
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 109.97030 1099.7030
2.000
FORMULA: 1000*(1+T)= 1099.7030
= 1099.7030
T = 4.87%
R = 9.97%
NLIC VAII EMERGING MARKETS
9/30/97 NO. YEARS 2.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-97 1000.00 12.737261 78.50981
FEE 30-Sep-98 0 6.800735 0.00000
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 78.50981 785.0981
2.000
FORMULA: 1000*(1+T)= 785.0981
= 785.0981
T = -11.39%
R = -21.49%
NLIC VAII EMERGING GROWTH
9/30/97 NO. YEARS 2.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-97 1000.00 6.173776 161.97541
FEE 30-Sep-98 0 6.195375 0.00000
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 161.97541 1619.7541
2.000
FORMULA: 1000*(1+T)= 1619.7541
= 1619.7541
T = 27.27%
R = 61.98%
NLIC VAII REAL ESTATE
9/30/97 NO. YEARS 2.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-97 1000.00 11.543277 86.63051
FEE 30-Sep-98 0 10.122559 0.00000
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 86.63051 866.3051
2.000
FORMULA: 1000*(1+T)= 866.3051
= 866.3051
T = -6.92%
R = -13.37%
NLIC VAII COMPETITIVE EDGE
9/30/97 NO. YEARS 2.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-97 1000.00 #N/A #N/A
FEE 30-Sep-98 0 8.023193 0.00000
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 #N/A #N/A
2.000
FORMULA: 1000*(1+T)= #N/A
= #N/A
T = #N/A
R = #N/A
NLIC VAII S&P 500 INDEX
9/30/97 NO. YEARS 2.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-97 1000.00 #N/A #N/A
FEE 30-Sep-98 0 7.973747 0.00000
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 #N/A #N/A
2.000
FORMULA: 1000*(1+T)= #N/A
= #N/A
T = #N/A
R = #N/A
NLIC VAII AGGRESSIVE EQUITY
9/30/97 NO. YEARS 2.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-97 1000.00 #N/A #N/A
FEE 30-Sep-98 0 #N/A #N/A
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 #N/A #N/A
2.000
FORMULA: 1000*(1+T)= #N/A
= #N/A
T = #N/A
R = #N/A
NLIC VAII SHORT TERM BOND
9/30/97 NO. YEARS 2.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-97 1000.00 #N/A #N/A
FEE 30-Sep-98 0 #N/A #N/A
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 #N/A #N/A
2.000
FORMULA: 1000*(1+T)= #N/A
= #N/A
T = #N/A
R = #N/A
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
NLIC VAII MONEY MARKET
30-Sep-96 NO. YEARS 3.000
TO
30-Sep-99
<S> <C> <C> <C> <C> <C> <C>
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-96 1000.00 8.870690 112.73080
FEE 30-Sep-97 0 9.242908 0.00000
FEE 30-Sep-98 0 9.638696 0.00000
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 112.73080 1127.3080
3.000
FORMULA: 1000*(1+T)= 1127.3080
= 1127.3080
T = 4.08%
R = 12.73%
NLIC VAII HIGH YIELD
9/30/96 NO. YEARS 3.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-96 1000.00 9.711923 102.96622
FEE 30-Sep-97 0 10.884641 0.00000
FEE 30-Sep-98 0 10.325800 0.00000
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 102.96622 1029.6622
3.000
FORMULA: 1000*(1+T)= 1029.6622
= 1029.6622
T = 0.98%
R = 2.97%
NLIC VAII EQUITY
9/30/96 NO. YEARS 3.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-96 1000.00 4.846216 206.34655
FEE 30-Sep-97 0 6.773091 0.00000
FEE 30-Sep-98 0 7.422228 0.00000
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 206.34655 2063.4655
3.000
FORMULA: 1000*(1+T)= 2063.4655
= 2063.4655
T = 27.31%
R = 106.35%
NLIC VAII QUALITY INCOME
9/30/96 NO. YEARS 3.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-96 1000.00 8.556963 116.86389
FEE 30-Sep-97 0 9.415878 0.00000
FEE 30-Sep-98 0 10.471528 0.00000
30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 116.86389 1168.6389
3.000
FORMULA: 1000*(1+T)= 1168.6389
= 1168.6389
T = 5.33%
R = 16.86%
NLIC VAII STRATEGIST
9/30/96 NO. YEARS 3.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-96 1000.00 6.359834 157.23681
FEE 30-Sep-97 0 7.686847 0.00000
FEE 30-Sep-98 0 8.061858 0.00000
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 157.23681 1572.3681
3.000
FORMULA: 1000*(1+T)= 1572.3681
= 1572.3681
T = 16.28%
R = 57.24%
NLIC VAII DIVIDEND GROWTH
9/30/96 NO. YEARS 3.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-96 1000.00 6.803719 146.97845
FEE 30-Sep-97 0 9.123345 0.00000
FEE 30-Sep-98 0 9.152914 0.00000
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 146.97845 1469.7845
3.000
FORMULA: 1000*(1+T)= 1469.7845
= 1469.7845
T = 13.70%
R = 46.98%
NLIC VAII UTILITIES
9/30/96 NO. YEARS 3.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-96 1000.00 6.002678 166.59232
FEE 30-Sep-97 0 7.200240 0.00000
FEE 30-Sep-98 0 8.954733 0.00000
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 166.59232 1665.9232
3.000
FORMULA: 1000*(1+T)= 1665.9232
= 1665.9232
T = 18.55%
R = 66.59%
NLIC VAII EUROPEAN GROWTH
9/30/96 NO. YEARS 3.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-96 1000.00 6.271120 159.46115
FEE 30-Sep-97 0 8.115058 0.00000
FEE 30-Sep-98 0 8.400532 0.00000
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 159.46115 1594.6115
3.000
FORMULA: 1000*(1+T)= 1594.6115
= 1594.6115
T = 16.83%
R = 59.46%
NLIC VAII CAPITAL GROWTH
9/30/96 NO. YEARS 3.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-96 1000.00 6.271120 159.46115
FEE 30-Sep-97 0 8.115058 0.00000
FEE 30-Sep-98 0 8.400532 0.00000
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 159.46115 1594.6115
3.000
FORMULA: 1000*(1+T)= 1594.6115
= 1594.6115
T = 16.83%
R = 59.46%
NLIC VAII PACIFIC GROWTH
9/30/96 NO. YEARS 3.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-96 1000.00 13.396676 74.64538
FEE 30-Sep-97 0 11.485201 0.00000
FEE 30-Sep-98 0 5.878091 0.00000
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 74.64538 746.4538
3.000
FORMULA: 1000*(1+T)= 746.4538
= 746.4538
T = -9.29%
R = -25.35%
NLIC VAII GLOBAL DIVIDEND GROWTH
9/30/96 NO. YEARS 3.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-96 1000.00 7.048420 141.87577
FEE 30-Sep-97 0 8.729173 0.00000
FEE 30-Sep-98 0 7.918273 0.00000
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 141.87577 1418.7577
3.000
FORMULA: 1000*(1+T)= 1418.7577
= 1418.7577
T = 12.37%
R = 41.88%
NLIC VAII CAPITAL APPRECIATION
9/30/96 NO. YEARS 3.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-96 1000.00 #N/A #N/A
FEE 30-Sep-97 0 12.364355 0.00000
FEE 30-Sep-98 0 9.387763 0.00000
FEE 30-Sep-99 0 10.871412 0.00000
RESULTING VALUE 30-Sep-99 10.871412 #N/A #N/A
3.000
FORMULA: 1000*(1+T)= #N/A
= #N/A
T = #N/A
R = #N/A
NLIC VAII INCOME BUILDER
9/30/96 NO. YEARS 3.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-96 1000.00 #N/A #N/A
FEE 30-Sep-97 0 9.466119 0.00000
FEE 30-Sep-98 0 9.073029 0.00000
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 #N/A #N/A
3.000
FORMULA: 1000*(1+T)= #N/A
= #N/A
T = #N/A
R = #N/A
NLIC VAII EQUITY GROWTH
9/30/96 NO. YEARS 3.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-96 1000.00 #N/A #N/A
FEE 30-Sep-97 0 7.201128 0.00000
FEE 30-Sep-98 0 7.194676 0.00000
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 #N/A #N/A
3.000
FORMULA: 1000*(1+T)= #N/A
= #N/A
T = #N/A
R = #N/A
NLIC VAII INTERNATIONAL MAGNUM
9/30/96 NO. YEARS 3.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-96 1000.00 #N/A #N/A
FEE 30-Sep-97 0 9.093364 0.00000
FEE 30-Sep-98 0 8.227234 0.00000
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 #N/A #N/A
3.000
FORMULA: 1000*(1+T)= #N/A
= #N/A
T = #N/A
R = #N/A
NLIC VAII EMERGING MARKETS
9/30/96 NO. YEARS 3.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-96 1000.00 #N/A #N/A
FEE 30-Sep-97 0 12.737261 0.00000
FEE 30-Sep-98 0 6.800735 0.00000
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 #N/A #N/A
3.000
FORMULA: 1000*(1+T)= #N/A
= #N/A
T = #N/A
R = #N/A
NLIC VAII EMERGING GROWTH
9/30/96 NO. YEARS 3.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-96 1000.00 5.064183 197.46524
FEE 30-Sep-97 0 6.173776 0.00000
FEE 30-Sep-98 0 6.195375 0.00000
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 197.46524 1974.6524
3.000
FORMULA: 1000*(1+T)= 1974.6524
= 1974.6524
T = 25.46%
R = 97.47%
NLIC VAII REAL ESTATE
9/30/96 NO. YEARS 3.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-96 1000.00 #N/A #N/A
FEE 30-Sep-97 0 11.543277 0.00000
FEE 30-Sep-98 0 10.122559 0.00000
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 #N/A #N/A
3.000
FORMULA: 1000*(1+T)= #N/A
= #N/A
T = #N/A
R = #N/A
NLIC VAII COMPETITIVE EDGE
9/30/96 NO. YEARS 3.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-96 1000.00 #N/A #N/A
FEE 30-Sep-97 0 #N/A #N/A
FEE 30-Sep-98 0 8.023193 0.00000
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 #N/A #N/A
3.000
FORMULA: 1000*(1+T)= #N/A - (0.85 * 1000 * 0.03)
= #N/A
T = #N/A
R = #N/A
NLIC VAII S&P 500 INDEX
9/30/96 NO. YEARS 3.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-96 1000.00 #N/A #N/A
FEE 30-Sep-97 0 #N/A #N/A
FEE 30-Sep-98 0 7.973747 0.00000
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 #N/A #N/A
3.000
FORMULA: 1000*(1+T)= #N/A - (0.85 * 1000 * 0.03)
= #N/A
T = #N/A
R = #N/A
NLIC VAII AGGRESSIVE EQUITY
9/30/96 NO. YEARS 3.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-96 1000.00 #N/A #N/A
FEE 30-Sep-97 0 #N/A #N/A
FEE 30-Sep-98 0 #N/A #N/A
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 #N/A #N/A
3.000
FORMULA: 1000*(1+T)= #N/A - (0.85 * 1000 * 0.03)
= #N/A
T = #N/A
R = #N/A
NLIC VAII SHORT TERM BOND
9/30/96 NO. YEARS 3.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-96 1000.00 #N/A #N/A
FEE 30-Sep-97 0 #N/A #N/A
FEE 30-Sep-98 0 #N/A #N/A
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 #N/A #N/A
3.000
FORMULA: 1000*(1+T)= #N/A - (0.85 * 1000 * 0.03)
= #N/A
T = #N/A
R = #N/A
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
NLIC VAII MONEY MARKET
29-Sep-94
TO NO. YEARS 5.000
30-Sep-99
<S> <C> <C> <C> <C> <C> <C>
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-94 1000.00 8.143613 122.79562
FEE 30-Sep-95 0 8.514523 0.00000
FEE 30-Sep-96 0 8.870690 0.00000
FEE 30-Sep-97 0 9.242908 0.00000
FEE 30-Sep-98 0 9.638696 0.00000
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 122.79562 1227.9562
5.000
FORMULA: 1000*(1+T)= 1227.9562
= 1227.9562
T = 4.19%
R = 22.80%
NLIC VAII HIGH YIELD
29-Sep-94
TO NO. YEARS 5.000
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-94 1000.00 7.908326 126.44901
FEE 30-Sep-95 0 8.803433 0.00000
FEE 30-Sep-96 0 9.711923 0.00000
FEE 30-Sep-97 0 10.884641 0.00000
FEE 30-Sep-98 0 10.325800 0.00000
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 126.44901 1264.4901
5.000
FORMULA: 1000*(1+T)= 1264.4901
= 1264.4901
T = 4.81%
R = 26.45%
NLIC VAII EQUITY
29-Sep-94
TO NO. YEARS 5.000
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-94 1000.00 3.198122 312.68350
FEE 30-Sep-95 0 4.307132 0.00000
FEE 30-Sep-96 0 4.846216 0.00000
FEE 30-Sep-97 0 6.773091 0.00000
FEE 30-Sep-98 0 7.422228 0.00000
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 312.68350 3126.8350
5.000
FORMULA: 1000*(1+T)= 3126.8350
= 3126.8350
T = 25.61%
R = 212.68%
NLIC VAII QUALITY INCOME
29-Sep-94
TO NO. YEARS 5.000
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-94 1000.00 7.105703 140.73204
FEE 30-Sep-95 0 8.323149 0.00000
FEE 30-Sep-96 0 8.556963 0.00000
FEE 30-Sep-97 0 9.415878 0.00000
FEE 30-Sep-98 0 10.471528 0.00000
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 140.73204 1407.3204
5.000
FORMULA: 1000*(1+T)= 1407.3204
= 1407.3204
T = 7.07%
R = 40.73%
NLIC VAII STRATEGIST
29-Sep-94
TO NO. YEARS 5.000
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-94 1000.00 5.386554 185.64746
FEE 30-Sep-95 0 5.677418 0.00000
FEE 30-Sep-96 0 6.359834 0.00000
FEE 30-Sep-97 0 7.686847 0.00000
FEE 30-Sep-98 0 8.061858 0.00000
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 185.64746 1856.4746
5.000
FORMULA: 1000*(1+T)= 1856.4746
= 1856.4746
T = 13.17%
R = 85.65%
NLIC VAII DIVIDEND GROWTH
29-Sep-94
TO NO. YEARS 5.000
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-94 1000.00 4.532558 220.62599
FEE 30-Sep-95 0 5.610285 0.00000
FEE 30-Sep-96 0 6.803719 0.00000
FEE 30-Sep-97 0 9.123345 0.00000
FEE 30-Sep-98 0 9.152914 0.00000
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 220.62599 2206.2599
5.000
FORMULA: 1000*(1+T)= 2206.2599
= 2206.2599
T = 17.15%
R = 120.63%
NLIC VAII UTILITIES
29-Sep-94
TO NO. YEARS 5.000
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-94 1000.00 4.737454 211.08385
FEE 30-Sep-95 0 5.619648 0.00000
FEE 30-Sep-96 0 6.002678 0.00000
FEE 30-Sep-97 0 7.200240 0.00000
FEE 30-Sep-98 0 8.954733 0.00000
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 211.08385 2110.8385
5.000
FORMULA: 1000*(1+T)= 2110.8385
= 2110.8385
T = 16.12%
R = 111.08%
NLIC VAII EUROPEAN GROWTH
29-Sep-94
TO NO. YEARS 5.000
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-94 1000.00 4.292198 232.98087
FEE 30-Sep-95 0 5.271113 0.00000
FEE 30-Sep-96 0 6.271120 0.00000
FEE 30-Sep-97 0 8.115058 0.00000
FEE 30-Sep-98 0 8.400532 0.00000
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 232.98087 2329.8087
5.000
FORMULA: 1000*(1+T)= 2329.8087
= 2329.8087
T = 18.43%
R = 132.98%
NLIC VAII CAPITAL GROWTH
29-Sep-94
TO NO. YEARS 5.000
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-94 1000.00 4.292198 232.98087
FEE 30-Sep-95 0 5.271113 0.00000
FEE 30-Sep-96 0 6.271120 0.00000
FEE 30-Sep-97 0 8.115058 0.00000
FEE 30-Sep-98 0 8.400532 0.00000
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 232.98087 2329.8087
5.000
FORMULA: 1000*(1+T)= 2329.8087
= 2329.8087
T = 18.43%
R = 132.98%
NLIC VAII PACIFIC GROWTH
29-Sep-94
TO NO. YEARS 5.000
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-94 1000.00 13.687679 73.05841
FEE 30-Sep-95 0 13.015439 0.00000
FEE 30-Sep-96 0 13.396676 0.00000
FEE 30-Sep-97 0 11.485201 0.00000
FEE 30-Sep-98 0 5.878091 0.00000
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 73.05841 730.5841
5.000
FORMULA: 1000*(1+T)= 730.5841
= 730.5841
T = -6.09%
R = -26.94%
NLIC VAII GLOBAL DIVIDEND GROWTH
29-Sep-94
TO NO. YEARS 5.000
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-94 1000.00 5.428075 184.22738
FEE 30-Sep-95 0 6.124499 0.00000
FEE 30-Sep-96 0 7.048420 0.00000
FEE 30-Sep-97 0 8.729173 0.00000
FEE 30-Sep-98 0 7.918273 0.00000
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 184.22738 1842.2738
5.000
FORMULA: 1000*(1+T)= 1842.2738
= 1842.2738
T = 13.00%
R = 84.23%
NLIC VAII CAPITAL APPRECIATION
29-Sep-94
TO NO. YEARS 5.000
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-94 1000.00 #VALUE! #VALUE!
FEE 30-Sep-95 0 #VALUE! #VALUE!
FEE 30-Sep-96 0 #VALUE! #VALUE!
FEE 30-Sep-97 0 12.364355 0.00000
FEE 30-Sep-98 0 9.387763 0.00000
FEE 30-Sep-99 0 10.871412 0.00000
RESULTING VALUE 30-Sep-99 10.871412 #VALUE! #VALUE!
5.000
FORMULA: 1000*(1+T)= #VALUE!
= #VALUE!
T = N/A
R = N/A
NLIC VAII INCOME BUILDER
29-Sep-94
TO NO. YEARS 5.000
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-94 1000.00 #VALUE! #VALUE!
FEE 30-Sep-95 0 #VALUE! #VALUE!
FEE 30-Sep-96 0 #VALUE! #VALUE!
FEE 30-Sep-97 0 9.466119 0.00000
FEE 30-Sep-98 0 9.073029 0.00000
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 #VALUE! #VALUE!
5.000
FORMULA: 1000*(1+T)= #VALUE!
= #VALUE!
T = N/A
R = N/A
NLIC VAII EQUITY GROWTH
29-Sep-94
TO NO. YEARS 5.000
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-94 1000.00 #VALUE! #VALUE!
FEE 30-Sep-95 0 #VALUE! #VALUE!
FEE 30-Sep-96 0 #VALUE! #VALUE!
FEE 30-Sep-97 0 7.201128 0.00000
FEE 30-Sep-98 0 7.194676 0.00000
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 #VALUE! #VALUE!
5.000
FORMULA: 1000*(1+T)= #VALUE!
= #VALUE!
T = N/A
R = N/A
NLIC VAII INTERNATIONAL MAGNUM
29-Sep-94
TO NO. YEARS 5.000
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-94 1000.00 #VALUE! #VALUE!
FEE 30-Sep-95 0 #VALUE! #VALUE!
FEE 30-Sep-96 0 #VALUE! #VALUE!
FEE 30-Sep-97 0 9.093364 0.00000
FEE 30-Sep-98 0 8.227234 0.00000
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 #VALUE! #VALUE!
5.000
FORMULA: 1000*(1+T)= #VALUE!
= #VALUE!
T = N/A
R = N/A
NLIC VAII EMERGING MARKETS
29-Sep-94
TO NO. YEARS 5.000
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-94 1000.00 #VALUE! #VALUE!
FEE 30-Sep-95 0 #VALUE! #VALUE!
FEE 30-Sep-96 0 #VALUE! #VALUE!
FEE 30-Sep-97 0 12.737261 0.00000
FEE 30-Sep-98 0 6.800735 0.00000
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 #VALUE! #VALUE!
5.000
FORMULA: 1000*(1+T)= #VALUE!
= #VALUE!
T = N/A
R = N/A
NLIC VAII EMERGING GROWTH
29-Sep-94
TO NO. YEARS 5.000
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-94 1000.00 #VALUE! #VALUE!
FEE 30-Sep-95 0 4.063069 0.00000
FEE 30-Sep-96 0 5.064183 0.00000
FEE 30-Sep-97 0 6.173776 0.00000
FEE 30-Sep-98 0 6.195375 0.00000
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 #VALUE! #VALUE!
5.000
FORMULA: 1000*(1+T)= #VALUE!
= #VALUE!
T = N/A
R = N/A
NLIC VAII REAL ESTATE
29-Sep-94
TO NO. YEARS 5.000
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-94 1000.00 #VALUE! #VALUE!
FEE 30-Sep-95 0 #VALUE! #VALUE!
FEE 30-Sep-96 0 #VALUE! #VALUE!
FEE 30-Sep-97 0 11.543277 0.00000
FEE 30-Sep-98 0 10.122559 0.00000
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 #VALUE! #VALUE!
5.000
FORMULA: 1000*(1+T)= #VALUE!
= #VALUE!
T = N/A
R = N/A
NLIC VAII COMPETITIVE EDGE
29-Sep-94
TO NO. YEARS 5.000
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-94 1000.00 #VALUE! #VALUE!
FEE 30-Sep-95 0 #VALUE! #VALUE!
FEE 30-Sep-96 0 #VALUE! #VALUE!
FEE 30-Sep-97 0 #VALUE! #VALUE!
FEE 30-Sep-98 0 8.023193 0.00000
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 #VALUE! #VALUE!
5.000
FORMULA: 1000*(1+T)= #VALUE!
= #VALUE!
T = N/A
R = N/A
NLIC VAII S&P 500 INDEX
29-Sep-94
TO NO. YEARS 5.000
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-94 1000.00 #VALUE! #VALUE!
FEE 30-Sep-95 0 #VALUE! #VALUE!
FEE 30-Sep-96 0 #VALUE! #VALUE!
FEE 30-Sep-97 0 #VALUE! #VALUE!
FEE 30-Sep-98 0 7.973747 0.00000
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 #VALUE! #VALUE!
5.000
FORMULA: 1000*(1+T)= #VALUE!
= #VALUE!
T = N/A
R = N/A
NLIC VAII AGGRESSIVE EQUITY
29-Sep-94
TO NO. YEARS 5.000
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-94 1000.00 #VALUE! #VALUE!
FEE 30-Sep-95 0 #VALUE! #VALUE!
FEE 30-Sep-96 0 #VALUE! #VALUE!
FEE 30-Sep-97 0 #VALUE! #VALUE!
FEE 30-Sep-98 0 #VALUE! #VALUE!
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 #VALUE! #VALUE!
5.000
FORMULA: 1000*(1+T)= #VALUE!
= #VALUE!
T = N/A
R = N/A
NLIC VAII SHORT TERM BOND
29-Sep-94
TO NO. YEARS 5.000
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-94 1000.00 #VALUE! #VALUE!
FEE 30-Sep-95 0 #VALUE! #VALUE!
FEE 30-Sep-96 0 #VALUE! #VALUE!
FEE 30-Sep-97 0 #VALUE! #VALUE!
FEE 30-Sep-98 0 #VALUE! #VALUE!
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 #VALUE! #VALUE!
5.000
FORMULA: 1000*(1+T)= #VALUE!
= #VALUE!
T = N/A
R = N/A
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
NLIC VAII MONEY MARKET
29-Sep-89
TO NO. YEARS 10.000
30-Sep-99
<S> <C> <C> <C> <C> <C> <C>
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 29-Sep-89 1000.00 6.719428 148.82220
FEE 29-Sep-90 0 7.196156 0.00000
FEE 29-Sep-91 0 7.588569 0.00000
FEE 29-Sep-92 0 7.814154 0.00000
FEE 29-Sep-93 0 7.958315 0.00000
FEE 29-Sep-94 0 8.142846 0.00000
FEE 29-Sep-95 0 8.514523 0.00000
FEE 29-Sep-96 0 8.867711 0.00000
FEE 29-Sep-97 0 9.241834 0.00000
FEE 29-Sep-98 0 9.637605 0.00000
FEE 29-Sep-99 0 9.998928 0.00000
RESULTING VALUE 29-Sep-99 9.998928 148.82220 1488.0624
10.000
FORMULA: 1000*(1+T)= 1488.0624 - (0.85 * 1000 * 0)
= 1488.06237
T = 4.05%
R = 48.81%
NLIC VAII HIGH YIELD
29-Sep-89
TO NO. YEARS 10.000
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 29-Sep-89 1000.00 5.520002 181.15937
FEE 29-Sep-90 0 4.294216 0.00000
FEE 29-Sep-91 0 5.248406 0.00000
FEE 29-Sep-92 0 6.744393 0.00000
FEE 29-Sep-93 0 7.736967 0.00000
FEE 29-Sep-94 0 7.893346 0.00000
FEE 29-Sep-95 0 8.803433 0.00000
FEE 29-Sep-96 0 9.691844 0.00000
FEE 29-Sep-97 0 10.855586 0.00000
FEE 29-Sep-98 0 10.334995 0.00000
FEE 29-Sep-99 0 10.046652 0.00000
RESULTING VALUE 29-Sep-99 10.046652 181.15937 1820.0451
10.000
FORMULA: 1000*(1+T)= 1820.0451 - (0.85 * 1000 * 0)
= 1820.04512
T = 6.17%
R = 82.00%
NLIC VAII EQUITY
29-Sep-89
TO NO. YEARS 10.000
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 29-Sep-89 1000.00 1.905278 524.85768
FEE 29-Sep-90 0 1.655008 0.00000
FEE 29-Sep-91 0 2.504217 0.00000
FEE 29-Sep-92 0 2.549355 0.00000
FEE 29-Sep-93 0 3.541551 0.00000
FEE 29-Sep-94 0 3.188297 0.00000
FEE 29-Sep-95 0 4.307132 0.00000
FEE 29-Sep-96 0 4.842642 0.00000
FEE 29-Sep-97 0 6.774981 0.00000
FEE 29-Sep-98 0 7.509758 0.00000
FEE 29-Sep-99 0 9.958621 0.00000
RESULTING VALUE 29-Sep-99 9.958621 524.85768 5226.8585
10.000
FORMULA: 1000*(1+T)= 5226.8585 - (0.85 * 1000 * 0)
= 5226.85852
T = 17.98%
R = 422.69%
NLIC VAII QUALITY INCOME
29-Sep-89
TO NO. YEARS 10.000
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 29-Sep-89 1000.00 5.026561 198.94316
FEE 29-Sep-90 0 5.244757 0.00000
FEE 29-Sep-91 0 6.078916 0.00000
FEE 29-Sep-92 0 6.880389 0.00000
FEE 29-Sep-93 0 7.812187 0.00000
FEE 29-Sep-94 0 7.097020 0.00000
FEE 29-Sep-95 0 8.323149 0.00000
FEE 29-Sep-96 0 8.557303 0.00000
FEE 29-Sep-97 0 9.424135 0.00000
FEE 29-Sep-98 0 10.365575 0.00000
FEE 29-Sep-99 0 9.944849 0.00000
RESULTING VALUE 29-Sep-99 9.944849 198.94316 1978.4596
10.000
FORMULA: 1000*(1+T)= 1978.4596 - (0.85 * 1000 * 0)
= 1978.45961
T = 7.06%
R = 97.85%
NLIC VAII STRATEGIST
29-Sep-89
TO NO. YEARS 10.000
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 29-Sep-89 1000.00 3.468909 288.27510
FEE 29-Sep-90 0 3.352972 0.00000
FEE 29-Sep-91 0 4.252616 0.00000
FEE 29-Sep-92 0 4.713989 0.00000
FEE 29-Sep-93 0 5.146299 0.00000
FEE 29-Sep-94 0 5.386692 0.00000
FEE 29-Sep-95 0 5.677418 0.00000
FEE 29-Sep-96 0 6.358521 0.00000
FEE 29-Sep-97 0 7.729732 0.00000
FEE 29-Sep-98 0 8.250196 0.00000
FEE 29-Sep-99 0 9.928635 0.00000
RESULTING VALUE 29-Sep-99 9.928635 288.27510 2862.1782
10.000
FORMULA: 1000*(1+T)= 2862.1782 - (0.85 * 1000 * 0)
= 2862.17817
T = 11.09%
R = 186.22%
NLIC VAII DIVIDEND GROWTH
29-Sep-89
TO NO. YEARS 10.000
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 29-Sep-89 1000.00 #VALUE! #VALUE!
FEE 29-Sep-90 0 2.758557 0.00000
FEE 29-Sep-91 0 3.576144 0.00000
FEE 29-Sep-92 0 3.975295 0.00000
FEE 29-Sep-93 0 4.456736 0.00000
FEE 29-Sep-94 0 4.532674 0.00000
FEE 29-Sep-95 0 5.610285 0.00000
FEE 29-Sep-96 0 6.786598 0.00000
FEE 29-Sep-97 0 9.154704 0.00000
FEE 29-Sep-98 0 9.424886 0.00000
FEE 29-Sep-99 0 9.910796 0.00000
RESULTING VALUE 29-Sep-99 9.910796 #VALUE! #VALUE!
10.000
FORMULA: 1000*(1+T)= #VALUE! - (0.85 * 1000 * 0)
= #VALUE!
T = N/A
R = N/A
NLIC VAII UTILITIES
29-Sep-89
TO NO. YEARS 10.000
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 29-Sep-89 1000.00 #VALUE! #VALUE!
FEE 29-Sep-90 0 3.103734 0.00000
FEE 29-Sep-91 0 3.750983 0.00000
FEE 29-Sep-92 0 4.314123 0.00000
FEE 29-Sep-93 0 5.416565 0.00000
FEE 29-Sep-94 0 4.718111 0.00000
FEE 29-Sep-95 0 5.619648 0.00000
FEE 29-Sep-96 0 5.998335 0.00000
FEE 29-Sep-97 0 7.202921 0.00000
FEE 29-Sep-98 0 9.008040 0.00000
FEE 29-Sep-99 0 9.888636 0.00000
RESULTING VALUE 29-Sep-99 9.888636 #VALUE! #VALUE!
10.000
FORMULA: 1000*(1+T)= #VALUE! - (0.85 * 1000 * 0)
= #VALUE!
T = N/A
R = N/A
NLIC VAII EUROPEAN GROWTH
29-Sep-89
TO NO. YEARS 10.000
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 29-Sep-89 1000.00 #VALUE! #VALUE!
FEE 29-Sep-90 0 #VALUE! #VALUE!
FEE 29-Sep-91 0 2.734408 0.00000
FEE 29-Sep-92 0 2.885876 0.00000
FEE 29-Sep-93 0 3.611994 0.00000
FEE 29-Sep-94 0 4.292308 0.00000
FEE 29-Sep-95 0 5.271113 0.00000
FEE 29-Sep-96 0 6.239455 0.00000
FEE 29-Sep-97 0 8.047554 0.00000
FEE 29-Sep-98 0 8.598799 0.00000
FEE 29-Sep-99 0 9.948544 0.00000
RESULTING VALUE 29-Sep-99 9.948544 #VALUE! #VALUE!
10.000
FORMULA: 1000*(1+T)= #VALUE! - (0.85 * 1000 * 0)
= #VALUE!
T = N/A
R = N/A
NLIC VAII CAPITAL GROWTH
29-Sep-89
TO NO. YEARS 10.000
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 29-Sep-89 1000.00 #VALUE! #VALUE!
FEE 29-Sep-90 0 #VALUE! #VALUE!
FEE 29-Sep-91 0 2.734408 0.00000
FEE 29-Sep-92 0 2.885876 0.00000
FEE 29-Sep-93 0 3.611994 0.00000
FEE 29-Sep-94 0 4.292308 0.00000
FEE 29-Sep-95 0 5.271113 0.00000
FEE 29-Sep-96 0 6.239455 0.00000
FEE 29-Sep-97 0 8.047554 0.00000
FEE 29-Sep-98 0 8.598799 0.00000
FEE 29-Sep-99 0 9.948544 0.00000
RESULTING VALUE 29-Sep-99 9.948544 #VALUE! #VALUE!
10.000
FORMULA: 1000*(1+T)= #VALUE! - (0.85 * 1000 * 0)
= #VALUE!
T = N/A
R = N/A
NLIC VAII PACIFIC GROWTH
29-Sep-89
TO NO. YEARS 10.000
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 29-Sep-89 1000.00 #VALUE! #VALUE!
FEE 29-Sep-90 0 #VALUE! #VALUE!
FEE 29-Sep-91 0 #VALUE! #VALUE!
FEE 29-Sep-92 0 #VALUE! #VALUE!
FEE 29-Sep-93 0 #VALUE! #VALUE!
FEE 29-Sep-94 0 13.755529 0.00000
FEE 29-Sep-95 0 13.015439 0.00000
FEE 29-Sep-96 0 13.316504 0.00000
FEE 29-Sep-97 0 11.417533 0.00000
FEE 29-Sep-98 0 5.906917 0.00000
FEE 29-Sep-99 0 9.914293 0.00000
RESULTING VALUE 29-Sep-99 9.914293 #VALUE! #VALUE!
10.000
FORMULA: 1000*(1+T)= #VALUE! - (0.85 * 1000 * 0)
= #VALUE!
T = N/A
R = N/A
NLIC VAII GLOBAL DIVIDEND GROWTH
29-Sep-89
TO NO. YEARS 10.000
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 29-Sep-89 1000.00 #VALUE! #VALUE!
FEE 29-Sep-90 0 #VALUE! #VALUE!
FEE 29-Sep-91 0 #VALUE! #VALUE!
FEE 29-Sep-92 0 #VALUE! #VALUE!
FEE 29-Sep-93 0 #VALUE! #VALUE!
FEE 29-Sep-94 0 5.417423 0.00000
FEE 29-Sep-95 0 6.124499 0.00000
FEE 29-Sep-96 0 7.034301 0.00000
FEE 29-Sep-97 0 8.690914 0.00000
FEE 29-Sep-98 0 8.116235 0.00000
FEE 29-Sep-99 0 9.886627 0.00000
RESULTING VALUE 29-Sep-99 9.886627 #VALUE! #VALUE!
10.000
FORMULA: 1000*(1+T)= #VALUE! - (0.85 * 1000 * 0)
= #VALUE!
T = N/A
R = N/A
NLIC VAII CAPITAL APPRECIATION
29-Sep-89
TO NO. YEARS 10.000
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 29-Sep-89 1000.00 #VALUE! #VALUE!
FEE 29-Sep-90 0 #VALUE! #VALUE!
FEE 29-Sep-91 0 #VALUE! #VALUE!
FEE 29-Sep-92 0 #VALUE! #VALUE!
FEE 29-Sep-93 0 #VALUE! #VALUE!
FEE 29-Sep-94 0 #VALUE! #VALUE!
FEE 29-Sep-95 0 #VALUE! #VALUE!
FEE 29-Sep-96 0 #VALUE! #VALUE!
FEE 29-Sep-97 0 12.344996 0.00000
FEE 29-Sep-98 0 9.574896 0.00000
FEE 29-Sep-99 0 10.871412 0.00000
RESULTING VALUE 29-Sep-99 10.871412 #VALUE! #VALUE!
10.000
FORMULA: 1000*(1+T)= #VALUE! - (0.85 * 1000 * 0)
= #VALUE!
T = N/A
R = N/A
NLIC VAII INCOME BUILDER
29-Sep-89
TO NO. YEARS 10.000
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 29-Sep-89 1000.00 #VALUE! #VALUE!
FEE 29-Sep-90 0 #VALUE! #VALUE!
FEE 29-Sep-91 0 #VALUE! #VALUE!
FEE 29-Sep-92 0 #VALUE! #VALUE!
FEE 29-Sep-93 0 #VALUE! #VALUE!
FEE 29-Sep-94 0 #VALUE! #VALUE!
FEE 29-Sep-95 0 #VALUE! #VALUE!
FEE 29-Sep-96 0 #VALUE! #VALUE!
FEE 29-Sep-97 0 9.461213 0.00000
FEE 29-Sep-98 0 9.210486 0.00000
FEE 29-Sep-99 0 9.959155 0.00000
RESULTING VALUE 29-Sep-99 9.959155 #VALUE! #VALUE!
10.000
FORMULA: 1000*(1+T)= #VALUE! - (0.85 * 1000 * 0)
= #VALUE!
T = N/A
R = N/A
NLIC VAII EQUITY GROWTH
29-Sep-89
TO NO. YEARS 10.000
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 29-Sep-89 1000.00 #VALUE! #VALUE!
FEE 29-Sep-90 0 #VALUE! #VALUE!
FEE 29-Sep-91 0 #VALUE! #VALUE!
FEE 29-Sep-92 0 #VALUE! #VALUE!
FEE 29-Sep-93 0 #VALUE! #VALUE!
FEE 29-Sep-94 0 #VALUE! #VALUE!
FEE 29-Sep-95 0 #VALUE! #VALUE!
FEE 29-Sep-96 0 #VALUE! #VALUE!
FEE 29-Sep-97 0 7.201313 0.00000
FEE 29-Sep-98 0 7.405107 0.00000
FEE 29-Sep-99 0 9.820746 0.00000
RESULTING VALUE 29-Sep-99 9.820746 #VALUE! #VALUE!
10.000
FORMULA: 1000*(1+T)= #VALUE! - (0.85 * 1000 * 0)
= #VALUE!
T = N/A
R = N/A
NLIC VAII INTERNATIONAL MAGNUM
29-Sep-89
TO NO. YEARS 10.000
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 29-Sep-89 1000.00 #VALUE! #VALUE!
FEE 29-Sep-90 0 #VALUE! #VALUE!
FEE 29-Sep-91 0 #VALUE! #VALUE!
FEE 29-Sep-92 0 #VALUE! #VALUE!
FEE 29-Sep-93 0 #VALUE! #VALUE!
FEE 29-Sep-94 0 #VALUE! #VALUE!
FEE 29-Sep-95 0 #VALUE! #VALUE!
FEE 29-Sep-96 0 #VALUE! #VALUE!
FEE 29-Sep-97 0 9.062267 0.00000
FEE 29-Sep-98 0 8.364305 0.00000
FEE 29-Sep-99 0 9.791914 0.00000
RESULTING VALUE 29-Sep-99 9.791914 #VALUE! #VALUE!
10.000
FORMULA: 1000*(1+T)= #VALUE! - (0.85 * 1000 * 0)
= #VALUE!
T = N/A
R = N/A
NLIC VAII EMERGING MARKETS
29-Sep-89
TO NO. YEARS 10.000
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 29-Sep-89 1000.00 #VALUE! #VALUE!
FEE 29-Sep-90 0 #VALUE! #VALUE!
FEE 29-Sep-91 0 #VALUE! #VALUE!
FEE 29-Sep-92 0 #VALUE! #VALUE!
FEE 29-Sep-93 0 #VALUE! #VALUE!
FEE 29-Sep-94 0 #VALUE! #VALUE!
FEE 29-Sep-95 0 #VALUE! #VALUE!
FEE 29-Sep-96 0 #VALUE! #VALUE!
FEE 29-Sep-97 0 12.727019 0.00000
FEE 29-Sep-98 0 6.975298 0.00000
FEE 29-Sep-99 0 10.075855 0.00000
RESULTING VALUE 29-Sep-99 10.075855 #VALUE! #VALUE!
10.000
FORMULA: 1000*(1+T)= #VALUE! - (0.85 * 1000 * 0)
= #VALUE!
T = N/A
R = N/A
NLIC VAII EMERGING GROWTH
29-Sep-89
TO NO. YEARS 10.000
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 29-Sep-89 1000.00 #VALUE! #VALUE!
FEE 29-Sep-90 0 #VALUE! #VALUE!
FEE 29-Sep-91 0 #VALUE! #VALUE!
FEE 29-Sep-92 0 #VALUE! #VALUE!
FEE 29-Sep-93 0 #VALUE! #VALUE!
FEE 29-Sep-94 0 #VALUE! #VALUE!
FEE 29-Sep-95 0 4.063069 0.00000
FEE 29-Sep-96 0 5.082432 0.00000
FEE 29-Sep-97 0 6.177474 0.00000
FEE 29-Sep-98 0 6.353320 0.00000
FEE 29-Sep-99 0 10.052362 0.00000
RESULTING VALUE 29-Sep-99 10.052362 #VALUE! #VALUE!
10.000
FORMULA: 1000*(1+T)= #VALUE! - (0.85 * 1000 * 0)
= #VALUE!
T = N/A
R = N/A
NLIC VAII REAL ESTATE
29-Sep-89
TO NO. YEARS 10.000
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 29-Sep-89 1000.00 #VALUE! #VALUE!
FEE 29-Sep-90 0 #VALUE! #VALUE!
FEE 29-Sep-91 0 #VALUE! #VALUE!
FEE 29-Sep-92 0 #VALUE! #VALUE!
FEE 29-Sep-93 0 #VALUE! #VALUE!
FEE 29-Sep-94 0 #VALUE! #VALUE!
FEE 29-Sep-95 0 #VALUE! #VALUE!
FEE 29-Sep-96 0 #VALUE! #VALUE!
FEE 29-Sep-97 0 11.404011 0.00000
FEE 29-Sep-98 0 10.143522 0.00000
FEE 29-Sep-99 0 9.969038 0.00000
RESULTING VALUE 29-Sep-99 9.969038 #VALUE! #VALUE!
10.000
FORMULA: 1000*(1+T)= #VALUE! - (0.85 * 1000 * 0)
= #VALUE!
T = N/A
R = N/A
NLIC VAII COMPETITIVE EDGE
29-Sep-89
TO NO. YEARS 10.000
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 29-Sep-89 1000.00 #VALUE! #VALUE!
FEE 29-Sep-90 0 #VALUE! #VALUE!
FEE 29-Sep-91 0 #VALUE! #VALUE!
FEE 29-Sep-92 0 #VALUE! #VALUE!
FEE 29-Sep-93 0 #VALUE! #VALUE!
FEE 29-Sep-94 0 #VALUE! #VALUE!
FEE 29-Sep-95 0 #VALUE! #VALUE!
FEE 29-Sep-96 0 #VALUE! #VALUE!
FEE 29-Sep-97 0 #VALUE! #VALUE!
FEE 29-Sep-98 0 8.275045 0.00000
FEE 29-Sep-99 0 9.923552 0.00000
RESULTING VALUE 29-Sep-99 9.923552 #VALUE! #VALUE!
10.000
FORMULA: 1000*(1+T)= #VALUE! - (0.85 * 1000 * 0)
= #VALUE!
T = N/A
R = N/A
NLIC VAII S&P 500 INDEX
29-Sep-89
TO NO. YEARS 10.000
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 29-Sep-89 1000.00 #VALUE! #VALUE!
FEE 29-Sep-90 0 #VALUE! #VALUE!
FEE 29-Sep-91 0 #VALUE! #VALUE!
FEE 29-Sep-92 0 #VALUE! #VALUE!
FEE 29-Sep-93 0 #VALUE! #VALUE!
FEE 29-Sep-94 0 #VALUE! #VALUE!
FEE 29-Sep-95 0 #VALUE! #VALUE!
FEE 29-Sep-96 0 #VALUE! #VALUE!
FEE 29-Sep-97 0 #VALUE! #VALUE!
FEE 29-Sep-98 0 8.223953 0.00000
FEE 29-Sep-99 0 9.889236 0.00000
RESULTING VALUE 29-Sep-99 9.889236 #VALUE! #VALUE!
10.000
FORMULA: 1000*(1+T)= #VALUE! - (0.85 * 1000 * 0)
= #VALUE!
T = N/A
R = N/A
NLIC VAII AGGRESSIVE EQUITY
29-Sep-89
TO NO. YEARS 10.000
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 29-Sep-89 1000.00 #VALUE! #VALUE!
FEE 29-Sep-90 0 #VALUE! #VALUE!
FEE 29-Sep-91 0 #VALUE! #VALUE!
FEE 29-Sep-92 0 #VALUE! #VALUE!
FEE 29-Sep-93 0 #VALUE! #VALUE!
FEE 29-Sep-94 0 #VALUE! #VALUE!
FEE 29-Sep-95 0 #VALUE! #VALUE!
FEE 29-Sep-96 0 #VALUE! #VALUE!
FEE 29-Sep-97 0 #VALUE! #VALUE!
FEE 29-Sep-98 0 #VALUE! #VALUE!
FEE 29-Sep-99 0 9.990586 0.00000
RESULTING VALUE 29-Sep-99 9.990586 #VALUE! #VALUE!
10.000
FORMULA: 1000*(1+T)= #VALUE! - (0.85 * 1000 * 0)
= #VALUE!
T = N/A
R = N/A
NLIC VAII SHORT TERM BOND
29-Sep-89
TO NO. YEARS 10.000
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 29-Sep-89 1000.00 #VALUE! #VALUE!
FEE 29-Sep-90 0 #VALUE! #VALUE!
FEE 29-Sep-91 0 #VALUE! #VALUE!
FEE 29-Sep-92 0 #VALUE! #VALUE!
FEE 29-Sep-93 0 #VALUE! #VALUE!
FEE 29-Sep-94 0 #VALUE! #VALUE!
FEE 29-Sep-95 0 #VALUE! #VALUE!
FEE 29-Sep-96 0 #VALUE! #VALUE!
FEE 29-Sep-97 0 #VALUE! #VALUE!
FEE 29-Sep-98 0 #VALUE! #VALUE!
FEE 29-Sep-99 0 9.987655 0.00000
RESULTING VALUE 29-Sep-99 9.987655 #VALUE! #VALUE!
10.000
FORMULA: 1000*(1+T)= #VALUE! - (0.85 * 1000 * 0)
= #VALUE!
T = N/A
R = N/A
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
NLIC VAII MONEY MARKET
09-Mar-84
TO NO. YEARS 15.559
30-Sep-99
<S> <C> <C> <C> <C> <C> <C> <C>
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 09-Mar-84 1000.00 4.868354 205.40823
1 FEE 09-Mar-85 0 5.094083 0.00000 0.06
2 FEE 09-Mar-86 0 5.433954 0.00000 0.05
3 FEE 09-Mar-87 0 5.711294 0.00000 0.04
4 09-Mar-88 0 6.026159 0.00000 0.03
5 09-Mar-89 0 6.424651 0.00000 0.02
6 09-Mar-90 0 6.932585 0.00000 0.01
7 09-Mar-91 0 7.393087 0.00000 0
8 09-Mar-92 0 7.709974 0.00000 0
9 09-Mar-93 0 7.882140 0.00000 0
10 09-Mar-94 0 8.021461 0.00000 0
11 09-Mar-95 0 8.294521 0.00000 0
12 09-Mar-96 0 8.674760 0.00000 0
13 09-Mar-97 0 9.026812 0.00000 0
14 FEE 09-Mar-98 0 9.415901 0.00000 0
15 FEE 09-Mar-99 0 9.800814 0.00000 0
RESULTING VALUE 30-Sep-99 10.000000 205.40823 2054.0823
15.559
FORMULA: 1000*(1+T)= 2054.0823
= 2054.0823
T = 4.74%
R = 105.41%
NLIC VAII HIGH YIELD
09-Mar-84
TO NO. YEARS 15.559
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 09-Mar-84 1000.00 3.424685 291.99763
1 FEE 09-Mar-85 0 3.854215 0.00000 0.06
2 FEE 09-Mar-86 0 4.911060 0.00000 0.05
3 FEE 09-Mar-87 0 5.818912 0.00000 0.04
4 09-Mar-88 0 5.555196 0.00000 0.03
5 09-Mar-89 0 5.955778 0.00000 0.02
6 09-Mar-90 0 4.679603 0.00000 0.01
7 09-Mar-91 0 4.280899 0.00000 0
8 09-Mar-92 0 6.522592 0.00000 0
9 09-Mar-93 0 7.141423 0.00000 0
10 09-Mar-94 0 8.424732 0.00000 0
11 09-Mar-95 0 8.015492 0.00000 0
12 09-Mar-96 0 9.204312 0.00000 0
13 09-Mar-97 0 9.976816 0.00000 0
14 FEE 09-Mar-98 0 11.233127 0.00000 0
15 FEE 09-Mar-99 0 10.138318 0.00000 0
RESULTING VALUE 30-Sep-99 10.000000 291.99763 2919.9763
15.559
FORMULA: 1000*(1+T)= 2919.9763
= 2919.9763
T = 7.13%
R = 192.00%
NLIC VAII EQUITY
09-Mar-84
TO NO. YEARS 15.559
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 09-Mar-84 1000.00 1.040973 960.63936
1 FEE 09-Mar-85 0 1.194637 0.00000 0.06
2 FEE 09-Mar-86 0 1.536008 0.00000 0.05
3 FEE 09-Mar-87 0 1.915487 0.00000 0.04
4 09-Mar-88 0 1.652222 0.00000 0.03
5 09-Mar-89 0 1.702673 0.00000 0.02
6 09-Mar-90 0 1.842306 0.00000 0.01
7 09-Mar-91 0 2.165355 0.00000 0
8 09-Mar-92 0 2.669905 0.00000 0
9 09-Mar-93 0 3.006098 0.00000 0
10 09-Mar-94 0 3.529685 0.00000 0
11 09-Mar-95 0 3.297140 0.00000 0
12 09-Mar-96 0 4.512978 0.00000 0
13 09-Mar-97 0 5.403007 0.00000 0
14 FEE 09-Mar-98 0 7.260885 0.00000 0
15 FEE 09-Mar-99 0 9.597499 0.00000 0
RESULTING VALUE 30-Sep-99 10.000000 960.63936 9606.3936
15.559
FORMULA: 1000*(1+T)= 9606.3936
= 9606.3936
T = 15.65%
R = 860.64%
NLIC VAII QUALITY INCOME
01-Mar-87
TO NO. YEARS 12.583
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 01-Mar-87 1000.00 4.259765 234.75476
1 FEE 01-Mar-88 0 4.514209 0.00000 0.06
2 FEE 01-Mar-89 0 4.624229 0.00000 0.05
3 FEE 01-Mar-90 0 5.044864 0.00000 0.04
4 01-Mar-91 0 5.598110 0.00000 0.03
5 01-Mar-92 0 6.361741 0.00000 0.02
6 01-Mar-93 0 7.250509 0.00000 0.01
7 01-Mar-94 0 7.540175 0.00000 0
8 01-Mar-95 0 7.486225 0.00000 0
9 01-Mar-96 0 8.584619 0.00000 0
10 01-Mar-97 0 8.856885 0.00000 0
11 01-Mar-98 0 9.804325 0.00000 0
12 01-Mar-99 0 10.163630 0.00000 0
13 30-Sep-99 0 10.000000 0.00000 0
14 FEE N/A 0 N/A 0.00000 0
15 FEE N/A 0 N/A 0.00000 0
RESULTING VALUE 30-Sep-99 10.000000 234.75476 2347.5476
12.583
FORMULA: 1000*(1+T)= 2347.5476
= 2347.5476
T = 7.02%
R = 134.75%
NLIC VAII STRATEGIST
01-Mar-87
TO NO. YEARS 12.583
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 01-Mar-87 1000.00 2.882239 346.95253
1 FEE 01-Mar-88 0 3.113534 0.00000 0.06
2 FEE 01-Mar-89 0 3.267614 0.00000 0.05
3 FEE 01-Mar-90 0 3.541766 0.00000 0.04
4 01-Mar-91 0 3.985758 0.00000 0.03
5 01-Mar-92 0 4.576240 0.00000 0.02
6 01-Mar-93 0 4.934636 0.00000 0.01
7 01-Mar-94 0 5.319789 0.00000 0
8 01-Mar-95 0 5.476887 0.00000 0
9 01-Mar-96 0 6.061339 0.00000 0
10 01-Mar-97 0 6.954802 0.00000 0
11 01-Mar-98 0 8.067625 0.00000 0
12 01-Mar-99 0 9.562621 0.00000 0
13 30-Sep-99 0 10.000000 0.00000 0
14 FEE N/A 0 N/A 0.00000 0
15 FEE N/A 0 N/A 0.00000 0
RESULTING VALUE 30-Sep-99 10.000000 346.95253 3469.5253
12.583
FORMULA: 1000*(1+T)= 3469.5253
= 3469.5253
T = 10.39%
R = 246.95%
NLIC VAII DIVIDEND GROWTH
01-Mar-90
TO NO. YEARS 9.582
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 01-Mar-90 1000.00 3.281776 304.71305
1 FEE 01-Mar-91 0 3.392911 0.00000 0.06
2 FEE 01-Mar-92 0 3.822388 0.00000 0.05
3 FEE 01-Mar-93 0 4.215619 0.00000 0.04
4 01-Mar-94 0 4.553041 0.00000 0.03
5 01-Mar-95 0 4.707717 0.00000 0.02
6 01-Mar-96 0 6.335363 0.00000 0.01
7 01-Mar-97 0 7.610655 0.00000 0
8 01-Mar-98 0 9.699366 0.00000 0
9 01-Mar-99 0 10.111160 0.00000 0
10 30-Sep-99 0 10.000000 0.00000 0
11 N/A 0 N/A 0.00000 0
12 N/A 0 N/A 0.00000 0
13 N/A 0 N/A 0.00000 0
14 FEE N/A 0 N/A 0.00000 0
15 FEE N/A 0 N/A 0.00000 0
RESULTING VALUE 30-Sep-99 10.000000 304.71305 3047.1305
9.582
FORMULA: 1000*(1+T)= 3047.1305
= 3047.1305
T = 12.33%
R = 204.71%
NLIC VAII UTILITIES
01-Mar-90
TO NO. YEARS 9.582
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 01-Mar-90 1000.00 3.277254 305.13355
1 FEE 01-Mar-91 0 3.511646 0.00000 0.06
2 FEE 01-Mar-92 0 3.914882 0.00000 0.05
3 FEE 01-Mar-93 0 4.872797 0.00000 0.04
4 01-Mar-94 0 4.933759 0.00000 0.03
5 01-Mar-95 0 4.866491 0.00000 0.02
6 01-Mar-96 0 6.006312 0.00000 0.01
7 01-Mar-97 0 6.485410 0.00000 0
8 01-Mar-98 0 8.317958 0.00000 0
9 01-Mar-99 0 9.559287 0.00000 0
10 30-Sep-99 0 10.000000 0.00000 0
11 N/A 0 N/A 0.00000 0
12 N/A 0 N/A 0.00000 0
13 N/A 0 N/A 0.00000 0
14 FEE N/A 0 N/A 0.00000 0
15 FEE N/A 0 N/A 0.00000 0
RESULTING VALUE 30-Sep-99 10.000000 305.13355 3051.3355
9.582
FORMULA: 1000*(1+T)= 3051.3355
= 3051.3355
T = 12.35%
R = 205.13%
NLIC VAII EUROPEAN GROWTH
01-Mar-91
TO NO. YEARS 8.583
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 01-Mar-91 1000.00 2.773843 360.51072
1 FEE 01-Mar-92 0 2.870566 0.00000 0.06
2 FEE 01-Mar-93 0 3.004937 0.00000 0.05
3 FEE 01-Mar-94 0 4.149651 0.00000 0.04
4 01-Mar-95 0 4.418176 0.00000 0.03
5 01-Mar-96 0 5.644739 0.00000 0.02
6 01-Mar-97 0 6.944865 0.00000 0.01
7 01-Mar-98 0 8.984279 0.00000 0
8 01-Mar-99 0 9.601625 0.00000 0
9 30-Sep-99 0 10.000000 0.00000 0
10 N/A 0 N/A 0.00000 0
11 N/A 0 N/A 0.00000 0
12 N/A 0 N/A 0.00000 0
13 N/A 0 N/A 0.00000 0
14 FEE N/A 0 N/A 0.00000 0
15 FEE N/A 0 N/A 0.00000 0
RESULTING VALUE 30-Sep-99 10.000000 360.51072 3605.1072
8.583
FORMULA: 1000*(1+T)= 3605.1072
= 3605.1072
T = 16.11%
R = 260.51%
NLIC VAII CAPITAL GROWTH
01-Mar-91
TO NO. YEARS 8.583
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 01-Mar-91 1000.00 2.773843 360.51072
1 FEE 01-Mar-92 0 2.870566 0.00000 0.06
2 FEE 01-Mar-93 0 3.004937 0.00000 0.05
3 FEE 01-Mar-94 0 4.149651 0.00000 0.04
4 01-Mar-95 0 4.418176 0.00000 0.03
5 01-Mar-96 0 5.644739 0.00000 0.02
6 01-Mar-97 0 6.944865 0.00000 0.01
7 01-Mar-98 0 8.984279 0.00000 0
8 01-Mar-99 0 9.601625 0.00000 0
9 30-Sep-99 0 10.000000 0.00000 0
10 N/A 0 N/A 0.00000 0
11 N/A 0 N/A 0.00000 0
12 N/A 0 N/A 0.00000 0
13 N/A 0 N/A 0.00000 0
14 FEE N/A 0 N/A 0.00000 0
15 FEE N/A 0 N/A 0.00000 0
RESULTING VALUE 30-Sep-99 10.000000 360.51072 3605.1072
8.583
FORMULA: 1000*(1+T)= 3605.1072
= 3605.1072
T = 16.11%
R = 260.51%
NLIC VAII PACIFIC GROWTH
24-Feb-94
TO NO. YEARS 5.596
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 24-Feb-94 1000.00 13.479949 74.18426
1 FEE 24-Feb-95 0 11.798610 0.00000 0.06
2 FEE 24-Feb-96 0 14.123090 0.00000 0.05
3 FEE 24-Feb-97 0 13.534865 0.00000 0.04
4 24-Feb-98 0 8.313854 0.00000 0.03
5 24-Feb-99 0 7.141351 0.00000 0.02
6 30-Sep-99 0 10.000000 0.00000 0.01
7 N/A 0 N/A 0.00000 0
8 N/A 0 N/A 0.00000 0
9 N/A 0 N/A 0.00000 0
10 N/A 0 N/A 0.00000 0
11 N/A 0 N/A 0.00000 0
12 N/A 0 N/A 0.00000 0
13 N/A 0 N/A 0.00000 0
14 FEE N/A 0 N/A 0.00000 0
15 FEE N/A 0 N/A 0.00000 0
RESULTING VALUE 30-Sep-99 10.000000 74.18426 741.8426
5.596
FORMULA: 1000*(1+T)= 741.8426
= 741.8426
T = -5.20%
R = -25.82%
NLIC VAII GLOBAL DIVIDEND GROWTH
24-Feb-94
TO NO. YEARS 5.596
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 24-Feb-94 1000.00 5.338787 187.30847
1 FEE 24-Feb-95 0 5.342880 0.00000 0.06
2 FEE 24-Feb-96 0 6.641893 0.00000 0.05
3 FEE 24-Feb-97 0 7.564888 0.00000 0.04
4 24-Feb-98 0 8.665012 0.00000 0.03
5 24-Feb-99 0 9.040174 0.00000 0.02
6 30-Sep-99 0 10.000000 0.00000 0.01
7 N/A 0 N/A 0.00000 0
8 N/A 0 N/A 0.00000 0
9 N/A 0 N/A 0.00000 0
10 N/A 0 N/A 0.00000 0
11 N/A 0 N/A 0.00000 0
12 N/A 0 N/A 0.00000 0
13 N/A 0 N/A 0.00000 0
14 FEE N/A 0 N/A 0.00000 0
15 FEE N/A 0 N/A 0.00000 0
RESULTING VALUE 30-Sep-99 10.000000 187.30847 1873.0847
5.596
FORMULA: 1000*(1+T)= 1873.0847
= 1873.0847
T = 11.87%
R = 87.31%
NLIC VAII CAPITAL APPRECIATION
21-Jan-97
TO NO. YEARS 2.689
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 21-Jan-97 1000.00 10.000000 100.00000
1 FEE 21-Jan-98 0 10.951230 0.00000 0.06
2 FEE 21-Jan-99 0 10.562537 0.00000 0.05
3 FEE 30-Sep-99 0 10.871412 0.00000 0.04
4 N/A 0 N/A 0.00000 0.03
5 N/A 0 N/A 0.00000 0.02
6 N/A 0 N/A 0.00000 0.01
7 N/A 0 N/A 0.00000 0
8 N/A 0 N/A 0.00000 0
9 N/A 0 N/A 0.00000 0
10 N/A 0 N/A 0.00000 0
11 N/A 0 N/A 0.00000 0
12 N/A 0 N/A 0.00000 0
13 N/A 0 N/A 0.00000 0
14 FEE N/A 0 N/A 0.00000 0
15 FEE N/A 0 N/A 0.00000 0
RESULTING VALUE 30-Sep-99 10.871412 100.00000 1087.1412
2.689
FORMULA: 1000*(1+T)= 1087.1412
= 1087.1412
T = 3.16%
R = 8.71%
NLIC VAII INCOME BUILDER
21-Jan-97
TO NO. YEARS 2.689
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 21-Jan-97 1000.00 8.016470 124.74319
1 FEE 21-Jan-98 0 9.702579 0.00000 0.06
2 FEE 21-Jan-99 0 10.033031 0.00000 0.05
3 FEE 30-Sep-99 0 10.000000 0.00000 0.04
4 N/A 0 N/A 0.00000 0.03
5 N/A 0 N/A 0.00000 0.02
6 N/A 0 N/A 0.00000 0.01
7 N/A 0 N/A 0.00000 0
8 N/A 0 N/A 0.00000 0
9 N/A 0 N/A 0.00000 0
10 N/A 0 N/A 0.00000 0
11 N/A 0 N/A 0.00000 0
12 N/A 0 N/A 0.00000 0
13 N/A 0 N/A 0.00000 0
14 FEE N/A 0 N/A 0.00000 0
15 FEE N/A 0 N/A 0.00000 0
RESULTING VALUE 30-Sep-99 10.000000 124.74319 1247.4319
2.689
FORMULA: 1000*(1+T)= 1247.4319
= 1247.4319
T = 8.57%
R = 24.74%
NLIC VAII EQUITY GROWTH
02-Jan-97
TO NO. YEARS 2.741
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 02-Jan-97 1000.00 5.647565 177.06748
1 FEE 02-Jan-98 0 7.426418 0.00000 0.06
2 FEE 02-Jan-99 0 8.756335 0.00000 0.05
3 FEE 30-Sep-99 0 10.000000 0.00000 0.04
4 N/A 0 N/A 0.00000 0.03
5 N/A 0 N/A 0.00000 0.02
6 N/A 0 N/A 0.00000 0.01
7 N/A 0 N/A 0.00000 0
8 N/A 0 N/A 0.00000 0
9 N/A 0 N/A 0.00000 0
10 N/A 0 N/A 0.00000 0
11 N/A 0 N/A 0.00000 0
12 N/A 0 N/A 0.00000 0
13 N/A 0 N/A 0.00000 0
14 FEE N/A 0 N/A 0.00000 0
15 FEE N/A 0 N/A 0.00000 0
RESULTING VALUE 30-Sep-99 10.000000 177.06748 1770.6748
2.741
FORMULA: 1000*(1+T)= 1770.6748
= 1770.6748
T = 23.18%
R = 77.07%
NLIC VAII INTERNATIONAL MAGNUM
02-Jan-97
TO NO. YEARS 2.741
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 02-Jan-97 1000.00 7.887184 126.78797
1 FEE 02-Jan-98 0 8.417113 0.00000 0.06
2 FEE 02-Jan-99 0 9.147215 0.00000 0.05
3 FEE 30-Sep-99 0 10.000000 0.00000 0.04
4 N/A 0 N/A 0.00000 0.03
5 N/A 0 N/A 0.00000 0.02
6 N/A 0 N/A 0.00000 0.01
7 N/A 0 N/A 0.00000 0
8 N/A 0 N/A 0.00000 0
9 N/A 0 N/A 0.00000 0
10 N/A 0 N/A 0.00000 0
11 N/A 0 N/A 0.00000 0
12 N/A 0 N/A 0.00000 0
13 N/A 0 N/A 0.00000 0
14 FEE N/A 0 N/A 0.00000 0
15 FEE N/A 0 N/A 0.00000 0
RESULTING VALUE 30-Sep-99 10.000000 126.78797 1267.8797
2.741
FORMULA: 1000*(1+T)= 1267.8797
= 1267.8797
T = 9.05%
R = 26.79%
NLIC VAII EMERGING MARKETS
01-Oct-96
TO NO. YEARS 2.995
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 01-Oct-96 1000.00 10.669769 93.72274
1 FEE 01-Oct-97 0 12.768644 0.00000 0.06
2 FEE 01-Oct-98 0 6.528095 0.00000 0.05
3 FEE 30-Sep-99 0 10.000000 0.00000 0.04
4 N/A 0 N/A 0.00000 0.03
5 N/A 0 N/A 0.00000 0.02
6 N/A 0 N/A 0.00000 0.01
7 N/A 0 N/A 0.00000 0
8 N/A 0 N/A 0.00000 0
9 N/A 0 N/A 0.00000 0
10 N/A 0 N/A 0.00000 0
11 N/A 0 N/A 0.00000 0
12 N/A 0 N/A 0.00000 0
13 N/A 0 N/A 0.00000 0
14 FEE N/A 0 N/A 0.00000 0
15 FEE N/A 0 N/A 0.00000 0
RESULTING VALUE 30-Sep-99 10.000000 93.72274 937.2274
2.995
FORMULA: 1000*(1+T)= 937.2274
= 937.2274
T = -2.14%
R = -6.28%
NLIC VAII EMERGING GROWTH
03-Jul-95
TO NO. YEARS 4.244
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 03-Jul-95 1000.00 3.613368 276.75014
1 FEE 03-Jul-96 0 4.914720 0.00000 0.06
2 FEE 03-Jul-97 0 5.393586 0.00000 0.05
3 FEE 03-Jul-98 0 7.095358 0.00000 0.04
4 03-Jul-99 0 9.845654 0.00000 0.03
5 30-Sep-99 0 10.000000 0.00000 0.02
6 N/A 0 N/A 0.00000 0.01
7 N/A 0 N/A 0.00000 0
8 N/A 0 N/A 0.00000 0
9 N/A 0 N/A 0.00000 0
10 N/A 0 N/A 0.00000 0
11 N/A 0 N/A 0.00000 0
12 N/A 0 N/A 0.00000 0
13 N/A 0 N/A 0.00000 0
14 FEE N/A 0 N/A 0.00000 0
15 FEE N/A 0 N/A 0.00000 0
RESULTING VALUE 30-Sep-99 10.000000 276.75014 2767.5014
4.244
FORMULA: 1000*(1+T)= 2767.5014
= 2767.5014
T = 27.11%
R = 176.75%
NLIC VAII REAL ESTATE
04-Mar-97
TO NO. YEARS 2.574
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 04-Mar-97 1000.00 10.022301 99.77749
1 FEE 04-Mar-98 0 11.467825 0.00000 0.06
2 FEE 04-Mar-99 0 9.752353 0.00000 0.05
3 FEE 30-Sep-99 0 10.000000 0.00000 0.04
4 N/A 0 N/A 0.00000 0.03
5 N/A 0 N/A 0.00000 0.02
6 N/A 0 N/A 0.00000 0.01
7 N/A 0 N/A 0.00000 0
8 N/A 0 N/A 0.00000 0
9 N/A 0 N/A 0.00000 0
10 N/A 0 N/A 0.00000 0
11 N/A 0 N/A 0.00000 0
12 N/A 0 N/A 0.00000 0
13 N/A 0 N/A 0.00000 0
14 FEE N/A 0 N/A 0.00000 0
15 FEE N/A 0 N/A 0.00000 0
RESULTING VALUE 30-Sep-99 10.000000 99.77749 997.7749
2.574
FORMULA: 1000*(1+T)= 997.7749
= 997.7749
T = -0.09%
R = -0.22%
NLIC VAII COMPETITIVE EDGE
18-May-98
TO NO. YEARS 1.369
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 18-May-98 1000.00 9.711913 102.96633
1 FEE 18-May-99 0 9.871268 0.00000 0.06
2 FEE 30-Sep-99 0 10.000000 0.00000 0.05
3 FEE N/A 0 N/A 0.00000 0.04
4 N/A 0 N/A 0.00000 0.03
5 N/A 0 N/A 0.00000 0.02
6 N/A 0 N/A 0.00000 0.01
7 N/A 0 N/A 0.00000 0
8 N/A 0 N/A 0.00000 0
9 N/A 0 N/A 0.00000 0
10 N/A 0 N/A 0.00000 0
11 N/A 0 N/A 0.00000 0
12 N/A 0 N/A 0.00000 0
13 N/A 0 N/A 0.00000 0
14 FEE N/A 0 N/A 0.00000 0
15 FEE N/A 0 N/A 0.00000 0
RESULTING VALUE 30-Sep-99 10.000000 102.96633 1029.6633
1.369
FORMULA: 1000*(1+T)= 1029.6633
= 1029.6633
T = 2.16%
R = 2.97%
NLIC VAII S&P 500 INDEX
18-May-98
TO NO. YEARS 1.369
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 18-May-98 1000.00 8.650298 115.60295
1 FEE 18-May-99 0 10.454763 0.00000 0.06
2 FEE 30-Sep-99 0 10.000000 0.00000 0.05
3 FEE N/A 0 N/A 0.00000 0.04
4 N/A 0 N/A 0.00000 0.03
5 N/A 0 N/A 0.00000 0.02
6 N/A 0 N/A 0.00000 0.01
7 N/A 0 N/A 0.00000 0
8 N/A 0 N/A 0.00000 0
9 N/A 0 N/A 0.00000 0
10 N/A 0 N/A 0.00000 0
11 N/A 0 N/A 0.00000 0
12 N/A 0 N/A 0.00000 0
13 N/A 0 N/A 0.00000 0
14 FEE N/A 0 N/A 0.00000 0
15 FEE N/A 0 N/A 0.00000 0
RESULTING VALUE 30-Sep-99 10.000000 115.60295 1156.0295
1.369
FORMULA: 1000*(1+T)= 1156.0295
= 1156.0295
T = 11.17%
R = 15.60%
NLIC VAII AGGRESSIVE EQUITY
02-May-99
TO NO. YEARS 0.413
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 02-May-99 1000.00 9.683803 103.26521
1 FEE 30-Sep-99 0 10.000000 0.00000 0.06
2 FEE N/A 0 N/A 0.00000 0.05
3 FEE N/A 0 N/A 0.00000 0.04
4 N/A 0 N/A 0.00000 0.03
5 N/A 0 N/A 0.00000 0.02
6 N/A 0 N/A 0.00000 0.01
7 N/A 0 N/A 0.00000 0
8 N/A 0 N/A 0.00000 0
9 N/A 0 N/A 0.00000 0
10 N/A 0 N/A 0.00000 0
11 N/A 0 N/A 0.00000 0
12 N/A 0 N/A 0.00000 0
13 N/A 0 N/A 0.00000 0
14 FEE N/A 0 N/A 0.00000 0
15 FEE N/A 0 N/A 0.00000 0
RESULTING VALUE 30-Sep-99 10.000000 103.26521 1032.6521
0.413
FORMULA: 1000*(1+T)= 1032.6521
= 1032.6521
T = 8.08%
R = 3.27%
NLIC VAII SHORT TERM BOND
02-May-99
TO NO. YEARS 0.413
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 02-May-99 1000.00 9.946559 100.53729
1 FEE 30-Sep-99 0 10.000000 0.00000 0.06
2 FEE N/A 0 N/A 0.00000 0.05
3 FEE N/A 0 N/A 0.00000 0.04
4 N/A 0 N/A 0.00000 0.03
5 N/A 0 N/A 0.00000 0.02
6 N/A 0 N/A 0.00000 0.01
7 N/A 0 N/A 0.00000 0
8 N/A 0 N/A 0.00000 0
9 N/A 0 N/A 0.00000 0
10 N/A 0 N/A 0.00000 0
11 N/A 0 N/A 0.00000 0
12 N/A 0 N/A 0.00000 0
13 N/A 0 N/A 0.00000 0
14 FEE N/A 0 N/A 0.00000 0
15 FEE N/A 0 N/A 0.00000 0
RESULTING VALUE 30-Sep-99 10.000000 100.53729 1005.3729
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
Inception Inception Ten Years Five Years
Fund Date Total Average Total Average Total Average
Money Market 03/09/84 105.41% 4.73% 48.82% 4.06% 22.80% 4.19%
High Yield 03/09/84 192.00% 7.12% 81.16% 6.12% 26.45% 4.81%
Equity 03/09/84 860.64% 15.64% 424.86% 18.03% 212.68% 25.61%
Quality Income 03/01/87 134.75% 7.01% 98.94% 7.12% 40.73% 7.07%
Managed Assets 03/01/87 246.95% 10.38% 188.28% 11.17% 85.65% 13.17%
Dividend Growth 03/01/90 204.71% 12.32% N/A N/A 120.63% 17.15%
Utilities 03/01/90 205.13% 12.34% N/A N/A 111.08% 16.12%
European Growth 03/01/91 260.51% 16.10% N/A N/A 132.98% 18.43%
Capital Growth 03/01/91 260.51% 16.10% N/A N/A 132.98% 18.43%
Pacific Growth 02/24/94 -25.82% -5.19% N/A N/A -26.94% -6.09%
Global Div Growth 02/24/94 87.31% 11.86% N/A N/A 84.23% 13.00%
Capital Appreciation 01/21/97 8.71% 3.15% N/A N/A N/A N/A
Income Builder 01/21/97 24.74% 8.56% N/A N/A N/A N/A
Equity Growth 01/02/97 77.07% 23.16% N/A N/A N/A N/A
International Magnum 01/02/97 26.79% 9.04% N/A N/A N/A N/A
Emerging Markets 10/01/96 -6.28% -2.14% N/A N/A N/A N/A
Emerging Growth 07/03/95 176.75% 27.09% N/A N/A N/A N/A
Real Estate 03/04/97 -0.22% -0.09% N/A N/A N/A N/A
Competitive Edge 05/18/98 2.97% 2.16% N/A N/A N/A N/A
S&P 500 Index 05/18/98 15.60% 11.16% N/A N/A N/A N/A
Aggressive Equity 05/02/99 3.27% 8.08% N/A N/A N/A N/A
Short Term Bond 05/02/99 0.54% 1.30% N/A N/A N/A N/A
Three Years Two Years One Year YTD Three Months
Fund Total Average Total Average
Money Market 12.73% 4.08% 8.19% 4.01% 3.75% 2.72% 0.94%
High Yield 2.97% 0.98% -8.13% -4.15% -3.16% -2.51% -5.98%
Equity 106.35% 27.31% 47.64% 21.51% 34.73% 13.61% -2.55%
Quality Income 16.86% 5.33% 6.20% 3.06% -4.50% -4.42% 0.07%
Managed Assets 57.24% 16.28% 30.09% 14.06% 24.04% 5.73% -2.11%
Dividend Growth 46.98% 13.70% 9.61% 4.69% 9.25% -3.17% -11.21%
Utilities 66.59% 18.55% 38.88% 17.85% 11.67% 0.86% -4.82%
European Growth 59.46% 16.83% 23.23% 11.01% 19.04% 2.42% 0.36%
Capital Growth 59.46% 16.83% 23.23% 11.01% 19.04% 2.42% 0.36%
Pacific Growth -25.35% -9.29% -12.93% -6.69% 70.12% 35.76% 4.56%
Global Div Growth 41.88% 12.37% 14.56% 7.03% 26.29% 8.06% -1.54%
Capital AppreciationN/A N/A -12.07% -6.23% 15.80% 7.11% 0.00%
Income Builder N/A N/A 5.64% 2.78% 10.22% 0.57% -7.29%
Equity Growth N/A N/A 38.87% 17.84% 38.99% 13.67% -1.01%
International MagnumN/A N/A 9.97% 4.87% 21.55% 10.88% 5.12%
Emerging Markets N/A N/A -21.49% -11.39% 47.04% 29.36% -5.91%
Emerging Growth 97.47% 25.46% 61.98% 27.27% 61.41% 26.39% 4.10%
Real Estate N/A N/A -13.37% -6.92% -1.21% -1.18% -8.47%
Competitive Edge N/A N/A N/A N/A 24.64% 5.58% -0.14%
S&P 500 Index N/A N/A N/A N/A 25.41% 3.64% -6.54%
Aggressive Equity N/A N/A N/A N/A N/A 0.00% 1.13%
Short Term Bond N/A N/A N/A N/A N/A 0.00% 0.96%
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
NLIC VAII MONEY MARKET
30-Sep-98 NO. YEARS 1.000
TO
30-Sep-99
<S> <C> <C> <C> <C> <C> <C>
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-98 1000.00 9.615596 103.99772
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 103.99772 1039.9772
1.000
FORMULA: 1000*(1+T)= 1039.9772
= 1039.9772
T = 4.00%
R = 4.00%
NLIC VAII HIGH YIELD
9/30/98 NO. YEARS 1.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-98 1000.00 10.301052 97.07746
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 97.07746 970.7746
1.000
FORMULA: 1000*(1+T)= 970.7746
= 970.7746
T = -2.92%
R = -2.92%
NLIC VAII EQUITY
9/30/98 NO. YEARS 1.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-98 1000.00 7.404472 135.05352
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 135.05352 1350.5352
1.000
FORMULA: 1000*(1+T)= 1350.5352
= 1350.5352
T = 35.05%
R = 35.05%
NLIC VAII QUALITY INCOME
9/30/98 NO. YEARS 1.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-98 1000.00 10.446421 95.72656
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 95.72656 957.2656
1.000
FORMULA: 1000*(1+T)= 957.2656
= 957.2656
T = -4.27%
R = -4.27%
NLIC VAII STRATEGIST
9/30/98 NO. YEARS 1.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-98 1000.00 8.042556 124.33858
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 124.33858 1243.3858
1.000
FORMULA: 1000*(1+T)= 1243.3858
= 1243.3858
T = 24.34%
R = 24.34%
NLIC VAII DIVIDEND GROWTH
9/30/98 NO. YEARS 1.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-98 1000.00 9.130986 109.51719
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 109.51719 1095.1719
1.000
FORMULA: 1000*(1+T)= 1095.1719
= 1095.1719
T = 9.52%
R = 9.52%
NLIC VAII UTILITIES
9/30/98 NO. YEARS 1.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-98 1000.00 8.933279 111.94098
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 111.94098 1119.4098
1.000
FORMULA: 1000*(1+T)= 1119.4098
= 1119.4098
T = 11.94%
R = 11.94%
NLIC VAII EUROPEAN GROWTH
9/30/98 NO. YEARS 1.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-98 1000.00 8.380422 119.32573
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 119.32573 1193.2573
1.000
FORMULA: 1000*(1+T)= 1193.2573
= 1193.2573
T = 19.33%
R = 19.33%
NLIC VAII CAPITAL GROWTH
9/30/98 NO. YEARS 1.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-98 1000.00 8.004773 124.92547
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 124.92547 1249.2547
1.000
FORMULA: 1000*(1+T)= 1249.2547
= 1249.2547
T = 24.93%
R = 24.93%
NLIC VAII PACIFIC GROWTH
9/30/98 NO. YEARS 1.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-98 1000.00 5.864031 170.53115
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 170.53115 1705.3115
1.000
FORMULA: 1000*(1+T)= 1705.3115
= 1705.3115
T = 70.53%
R = 70.53%
NLIC VAII GLOBAL DIVIDEND GROWTH
9/30/98 NO. YEARS 1.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-98 1000.00 7.899315 126.59325
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 126.59325 1265.9325
1.000
FORMULA: 1000*(1+T)= 1265.9325
= 1265.9325
T = 26.59%
R = 26.59%
NLIC VAII CAPITAL APPRECIATION
9/30/98 NO. YEARS 1.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-98 1000.00 9.387763 106.52165
FEE 30-Sep-99 0 10.871412 0.00000
RESULTING VALUE 30-Sep-99 10.871412 106.52165 1158.0407
1.000
FORMULA: 1000*(1+T)= 1158.0407
= 1158.0407
T = 15.80%
R = 15.80%
NLIC VAII INCOME BUILDER
9/30/98 NO. YEARS 1.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-98 1000.00 9.051291 110.48148
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 110.48148 1104.8148
1.000
FORMULA: 1000*(1+T)= 1104.8148
= 1104.8148
T = 10.48%
R = 10.48%
NLIC VAII EQUITY GROWTH
9/30/98 NO. YEARS 1.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-98 1000.00 7.177458 139.32510
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 139.32510 1393.2510
1.000
FORMULA: 1000*(1+T)= 1393.2510
= 1393.2510
T = 39.33%
R = 39.33%
NLIC VAII INTERNATIONAL MAGNUM
9/30/98 NO. YEARS 1.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-98 1000.00 8.207534 121.83927
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 121.83927 1218.3927
1.000
FORMULA: 1000*(1+T)= 1218.3927
= 1218.3927
T = 21.84%
R = 21.84%
NLIC VAII EMERGING MARKETS
9/30/98 NO. YEARS 1.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-98 1000.00 6.784469 147.39547
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 147.39547 1473.9547
1.000
FORMULA: 1000*(1+T)= 1473.9547
= 1473.9547
T = 47.40%
R = 47.40%
NLIC VAII EMERGING GROWTH
9/30/98 NO. YEARS 1.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-98 1000.00 6.180559 161.79766
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 161.79766 1617.9766
1.000
FORMULA: 1000*(1+T)= 1617.9766
= 1617.9766
T = 61.80%
R = 61.80%
NLIC VAII REAL ESTATE
9/30/98 NO. YEARS 1.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-98 1000.00 10.098299 99.02658
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 99.02658 990.2658
1.000
FORMULA: 1000*(1+T)= 990.2658
= 990.2658
T = -0.97%
R = -0.97%
NLIC VAII COMPETITIVE EDGE
9/30/98 NO. YEARS 1.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-98 1000.00 8.003985 124.93776
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 124.93776 1249.3776
1.000
FORMULA: 1000*(1+T)= 1249.3776
= 1249.3776
T = 24.94%
R = 24.94%
NLIC VAII S&P 500 INDEX
9/30/98 NO. YEARS 1.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-98 1000.00 7.954654 125.71256
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 125.71256 1257.1256
1.000
FORMULA: 1000*(1+T)= 1257.1256
= 1257.1256
T = 25.71%
R = 25.71%
NLIC VAII AGGRESSIVE EQUITY
9/30/98 NO. YEARS 1.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-98 1000.00 #VALUE! #VALUE!
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 #VALUE! #VALUE!
1.000
FORMULA: 1000*(1+T)= #VALUE!
= #VALUE!
T = N/A
R = N/A
NLIC VAII SHORT TERM BOND
9/30/98 NO. YEARS 1.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-98 1000.00 #VALUE! #VALUE!
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 #VALUE! #VALUE!
1.000
FORMULA: 1000*(1+T)= #VALUE!
= #VALUE!
T = N/A
R = N/A
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
NLIC VAII MONEY MARKET
30-Sep-97 NO. YEARS 2.000
TO
30-Sep-99
<S> <C> <C> <C> <C> <C> <C>
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-97 1000.00 9.198658 108.71151
FEE 30-Sep-98 0 9.615596 0.00000
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 108.71151 1087.1151
2.000
FORMULA: 1000*(1+T)= 1087.1151
= 1087.1151
T = 4.26%
R = 8.71%
NLIC VAII HIGH YIELD
9/30/97 NO. YEARS 2.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-97 1000.00 10.832520 92.31463
FEE 30-Sep-98 0 10.301052 0.00000
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 92.31463 923.1463
2.000
FORMULA: 1000*(1+T)= 923.1463
= 923.1463
T = -3.92%
R = -7.69%
NLIC VAII EQUITY
9/30/97 NO. YEARS 2.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-97 1000.00 6.740697 148.35260
FEE 30-Sep-98 0 7.404472 0.00000
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 148.35260 1483.5260
2.000
FORMULA: 1000*(1+T)= 1483.5260
= 1483.5260
T = 21.80%
R = 48.35%
NLIC VAII QUALITY INCOME
9/30/97 NO. YEARS 2.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-97 1000.00 9.370793 106.71455
FEE 30-Sep-98 0 10.446421 0.00000
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 106.71455 1067.1455
2.000
FORMULA: 1000*(1+T)= 1067.1455
= 1067.1455
T = 3.30%
R = 6.71%
NLIC VAII STRATEGIST
9/30/97 NO. YEARS 2.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-97 1000.00 7.650070 130.71777
FEE 30-Sep-98 0 8.042556 0.00000
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 130.71777 1307.1777
2.000
FORMULA: 1000*(1+T)= 1307.1777
= 1307.1777
T = 14.33%
R = 30.72%
NLIC VAII DIVIDEND GROWTH
9/30/97 NO. YEARS 2.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-97 1000.00 9.079680 110.13604
FEE 30-Sep-98 0 9.130986 0.00000
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 110.13604 1101.3604
2.000
FORMULA: 1000*(1+T)= 1101.3604
= 1101.3604
T = 4.95%
R = 10.14%
NLIC VAII UTILITIES
9/30/97 NO. YEARS 2.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-97 1000.00 7.165790 139.55195
FEE 30-Sep-98 0 8.933279 0.00000
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 139.55195 1395.5195
2.000
FORMULA: 1000*(1+T)= 1395.5195
= 1395.5195
T = 18.13%
R = 39.55%
NLIC VAII EUROPEAN GROWTH
9/30/97 NO. YEARS 2.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-97 1000.00 8.076245 123.81992
FEE 30-Sep-98 0 8.380422 0.00000
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 123.81992 1238.1992
2.000
FORMULA: 1000*(1+T)= 1238.1992
= 1238.1992
T = 11.27%
R = 23.82%
NLIC VAII CAPITAL GROWTH
9/30/97 NO. YEARS 2.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-97 1000.00 8.703496 114.89635
FEE 30-Sep-98 0 8.004773 0.00000
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 114.89635 1148.9635
2.000
FORMULA: 1000*(1+T)= 1148.9635
= 1148.9635
T = 7.19%
R = 14.90%
NLIC VAII PACIFIC GROWTH
9/30/97 NO. YEARS 2.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-97 1000.00 11.430179 87.48770
FEE 30-Sep-98 0 5.864031 0.00000
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 87.48770 874.8770
2.000
FORMULA: 1000*(1+T)= 874.8770
= 874.8770
T = -6.47%
R = -12.51%
NLIC VAII GLOBAL DIVIDEND GROWTH
9/30/97 NO. YEARS 2.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-97 1000.00 8.687398 115.10927
FEE 30-Sep-98 0 7.899315 0.00000
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 115.10927 1151.0927
2.000
FORMULA: 1000*(1+T)= 1151.0927
= 1151.0927
T = 7.29%
R = 15.11%
NLIC VAII CAPITAL APPRECIATION
9/30/97 NO. YEARS 2.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-97 1000.00 12.364355 80.87765
FEE 30-Sep-98 0 9.387763 0.00000
FEE 30-Sep-99 0 10.871412 0.00000
RESULTING VALUE 30-Sep-99 10.871412 80.87765 879.2543
2.000
FORMULA: 1000*(1+T)= 879.2543
= 879.2543
T = -6.23%
R = -12.07%
NLIC VAII INCOME BUILDER
9/30/97 NO. YEARS 2.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-97 1000.00 9.420802 106.14807
FEE 30-Sep-98 0 9.051291 0.00000
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 106.14807 1061.4807
2.000
FORMULA: 1000*(1+T)= 1061.4807
= 1061.4807
T = 3.03%
R = 6.15%
NLIC VAII EQUITY GROWTH
9/30/97 NO. YEARS 2.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-97 1000.00 7.166680 139.53462
FEE 30-Sep-98 0 7.177458 0.00000
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 139.53462 1395.3462
2.000
FORMULA: 1000*(1+T)= 1395.3462
= 1395.3462
T = 18.12%
R = 39.53%
NLIC VAII INTERNATIONAL MAGNUM
9/30/97 NO. YEARS 2.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-97 1000.00 9.049844 110.49914
FEE 30-Sep-98 0 8.207534 0.00000
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 110.49914 1104.9914
2.000
FORMULA: 1000*(1+T)= 1104.9914
= 1104.9914
T = 5.12%
R = 10.50%
NLIC VAII EMERGING MARKETS
9/30/97 NO. YEARS 2.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-97 1000.00 12.676256 78.88765
FEE 30-Sep-98 0 6.784469 0.00000
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 78.88765 788.8765
2.000
FORMULA: 1000*(1+T)= 788.8765
= 788.8765
T = -11.18%
R = -21.11%
NLIC VAII EMERGING GROWTH
9/30/97 NO. YEARS 2.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-97 1000.00 6.144247 162.75387
FEE 30-Sep-98 0 6.180559 0.00000
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 162.75387 1627.5387
2.000
FORMULA: 1000*(1+T)= 1627.5387
= 1627.5387
T = 27.58%
R = 62.75%
NLIC VAII REAL ESTATE
9/30/97 NO. YEARS 2.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-97 1000.00 11.487982 87.04749
FEE 30-Sep-98 0 10.098299 0.00000
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 87.04749 870.4749
2.000
FORMULA: 1000*(1+T)= 870.4749
= 870.4749
T = -6.70%
R = -12.95%
NLIC VAII COMPETITIVE EDGE
9/30/97 NO. YEARS 2.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-97 1000.00 #N/A #N/A
FEE 30-Sep-98 0 8.003985 0.00000
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 #N/A #N/A
2.000
FORMULA: 1000*(1+T)= #N/A
= #N/A
T = #N/A
R = #N/A
NLIC VAII S&P 500 INDEX
9/30/97 NO. YEARS 2.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-97 1000.00 #N/A #N/A
FEE 30-Sep-98 0 7.954654 0.00000
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 #N/A #N/A
2.000
FORMULA: 1000*(1+T)= #N/A
= #N/A
T = #N/A
R = #N/A
NLIC VAII AGGRESSIVE EQUITY
9/30/97 NO. YEARS 2.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-97 1000.00 #N/A #N/A
FEE 30-Sep-98 0 #N/A #N/A
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 #N/A #N/A
2.000
FORMULA: 1000*(1+T)= #N/A
= #N/A
T = #N/A
R = #N/A
NLIC VAII SHORT TERM BOND
9/30/97 NO. YEARS 2.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-97 1000.00 #N/A #N/A
FEE 30-Sep-98 0 #N/A #N/A
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 #N/A #N/A
2.000
FORMULA: 1000*(1+T)= #N/A
= #N/A
T = #N/A
R = #N/A
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
NLIC VAII MONEY MARKET
30-Sep-96 NO. YEARS 3.000
TO
30-Sep-99
<S> <C> <C> <C> <C> <C> <C>
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-96 1000.00 8.807079 113.54502
FEE 30-Sep-97 0 9.198658 0.00000
FEE 30-Sep-98 0 9.615596 0.00000
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 113.54502 1135.4502
3.000
FORMULA: 1000*(1+T)= 1135.4502
= 1135.4502
T = 4.33%
R = 13.55%
NLIC VAII HIGH YIELD
9/30/96 NO. YEARS 3.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-96 1000.00 9.642276 103.70995
FEE 30-Sep-97 0 10.832520 0.00000
FEE 30-Sep-98 0 10.301052 0.00000
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 103.70995 1037.0995
3.000
FORMULA: 1000*(1+T)= 1037.0995
= 1037.0995
T = 1.22%
R = 3.71%
NLIC VAII EQUITY
9/30/96 NO. YEARS 3.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-96 1000.00 4.811498 207.83547
FEE 30-Sep-97 0 6.740697 0.00000
FEE 30-Sep-98 0 7.404472 0.00000
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 207.83547 2078.3547
3.000
FORMULA: 1000*(1+T)= 2078.3547
= 2078.3547
T = 27.62%
R = 107.84%
NLIC VAII QUALITY INCOME
9/30/96 NO. YEARS 3.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-96 1000.00 8.495600 117.70799
FEE 30-Sep-97 0 9.370793 0.00000
FEE 30-Sep-98 0 10.446421 0.00000
30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 117.70799 1177.0799
3.000
FORMULA: 1000*(1+T)= 1177.0799
= 1177.0799
T = 5.58%
R = 17.71%
NLIC VAII STRATEGIST
9/30/96 NO. YEARS 3.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-96 1000.00 6.314257 158.37176
FEE 30-Sep-97 0 7.650070 0.00000
FEE 30-Sep-98 0 8.042556 0.00000
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 158.37176 1583.7176
3.000
FORMULA: 1000*(1+T)= 1583.7176
= 1583.7176
T = 16.56%
R = 58.37%
NLIC VAII DIVIDEND GROWTH
9/30/96 NO. YEARS 3.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-96 1000.00 6.754959 148.03939
FEE 30-Sep-97 0 9.079680 0.00000
FEE 30-Sep-98 0 9.130986 0.00000
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 148.03939 1480.3939
3.000
FORMULA: 1000*(1+T)= 1480.3939
= 1480.3939
T = 13.97%
R = 48.04%
NLIC VAII UTILITIES
9/30/96 NO. YEARS 3.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-96 1000.00 5.959659 167.79482
FEE 30-Sep-97 0 7.165790 0.00000
FEE 30-Sep-98 0 8.933279 0.00000
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 167.79482 1677.9482
3.000
FORMULA: 1000*(1+T)= 1677.9482
= 1677.9482
T = 18.83%
R = 67.79%
NLIC VAII EUROPEAN GROWTH
9/30/96 NO. YEARS 3.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-96 1000.00 6.226190 160.61188
FEE 30-Sep-97 0 8.076245 0.00000
FEE 30-Sep-98 0 8.380422 0.00000
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 160.61188 1606.1188
3.000
FORMULA: 1000*(1+T)= 1606.1188
= 1606.1188
T = 17.11%
R = 60.61%
NLIC VAII CAPITAL GROWTH
9/30/96 NO. YEARS 3.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-96 1000.00 6.563788 152.35106
FEE 30-Sep-97 0 8.703496 0.00000
FEE 30-Sep-98 0 8.004773 0.00000
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 152.35106 1523.5106
3.000
FORMULA: 1000*(1+T)= 1523.5106
= 1523.5106
T = 15.07%
R = 52.35%
NLIC VAII PACIFIC GROWTH
9/30/96 NO. YEARS 3.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-96 1000.00 13.300528 75.18499
FEE 30-Sep-97 0 11.430179 0.00000
FEE 30-Sep-98 0 5.864031 0.00000
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 75.18499 751.8499
3.000
FORMULA: 1000*(1+T)= 751.8499
= 751.8499
T = -9.07%
R = -24.82%
NLIC VAII GLOBAL DIVIDEND GROWTH
9/30/96 NO. YEARS 3.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-96 1000.00 6.997897 142.90008
FEE 30-Sep-97 0 8.687398 0.00000
FEE 30-Sep-98 0 7.899315 0.00000
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 142.90008 1429.0008
3.000
FORMULA: 1000*(1+T)= 1429.0008
= 1429.0008
T = 12.64%
R = 42.90%
NLIC VAII CAPITAL APPRECIATION
9/30/96 NO. YEARS 3.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-96 1000.00 #N/A #N/A
FEE 30-Sep-97 0 12.364355 0.00000
FEE 30-Sep-98 0 9.387763 0.00000
FEE 30-Sep-99 0 10.871412 0.00000
RESULTING VALUE 30-Sep-99 10.871412 #N/A #N/A
3.000
FORMULA: 1000*(1+T)= #N/A
= #N/A
T = #N/A
R = #N/A
NLIC VAII INCOME BUILDER
9/30/96 NO. YEARS 3.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-96 1000.00 #N/A #N/A
FEE 30-Sep-97 0 9.420802 0.00000
FEE 30-Sep-98 0 9.051291 0.00000
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 #N/A #N/A
3.000
FORMULA: 1000*(1+T)= #N/A
= #N/A
T = #N/A
R = #N/A
NLIC VAII EQUITY GROWTH
9/30/96 NO. YEARS 3.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-96 1000.00 #N/A #N/A
FEE 30-Sep-97 0 7.166680 0.00000
FEE 30-Sep-98 0 7.177458 0.00000
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 #N/A #N/A
3.000
FORMULA: 1000*(1+T)= #N/A
= #N/A
T = #N/A
R = #N/A
NLIC VAII INTERNATIONAL MAGNUM
9/30/96 NO. YEARS 3.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-96 1000.00 #N/A #N/A
FEE 30-Sep-97 0 9.049844 0.00000
FEE 30-Sep-98 0 8.207534 0.00000
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 #N/A #N/A
3.000
FORMULA: 1000*(1+T)= #N/A
= #N/A
T = #N/A
R = #N/A
NLIC VAII EMERGING MARKETS
9/30/96 NO. YEARS 3.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-96 1000.00 #N/A #N/A
FEE 30-Sep-97 0 12.676256 0.00000
FEE 30-Sep-98 0 6.784469 0.00000
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 #N/A #N/A
3.000
FORMULA: 1000*(1+T)= #N/A
= #N/A
T = #N/A
R = #N/A
NLIC VAII EMERGING GROWTH
9/30/96 NO. YEARS 3.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-96 1000.00 5.027893 198.89048
FEE 30-Sep-97 0 6.144247 0.00000
FEE 30-Sep-98 0 6.180559 0.00000
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 198.89048 1988.9048
3.000
FORMULA: 1000*(1+T)= 1988.9048
= 1988.9048
T = 25.76%
R = 98.89%
NLIC VAII REAL ESTATE
9/30/96 NO. YEARS 3.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-96 1000.00 #N/A #N/A
FEE 30-Sep-97 0 11.487982 0.00000
FEE 30-Sep-98 0 10.098299 0.00000
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 #N/A #N/A
3.000
FORMULA: 1000*(1+T)= #N/A
= #N/A
T = #N/A
R = #N/A
NLIC VAII COMPETITIVE EDGE
9/30/96 NO. YEARS 3.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-96 1000.00 #N/A #N/A
FEE 30-Sep-97 0 #N/A #N/A
FEE 30-Sep-98 0 8.003985 0.00000
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 #N/A #N/A
3.000
FORMULA: 1000*(1+T)= #N/A - (0.85 * 1000 * 0.03)
= #N/A
T = #N/A
R = #N/A
NLIC VAII S&P 500 INDEX
9/30/96 NO. YEARS 3.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-96 1000.00 #N/A #N/A
FEE 30-Sep-97 0 #N/A #N/A
FEE 30-Sep-98 0 7.954654 0.00000
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 #N/A #N/A
3.000
FORMULA: 1000*(1+T)= #N/A - (0.85 * 1000 * 0.03)
= #N/A
T = #N/A
R = #N/A
NLIC VAII AGGRESSIVE EQUITY
9/30/96 NO. YEARS 3.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-96 1000.00 #N/A #N/A
FEE 30-Sep-97 0 #N/A #N/A
FEE 30-Sep-98 0 #N/A #N/A
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 #N/A #N/A
3.000
FORMULA: 1000*(1+T)= #N/A - (0.85 * 1000 * 0.03)
= #N/A
T = #N/A
R = #N/A
NLIC VAII SHORT TERM BOND
9/30/96 NO. YEARS 3.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-96 1000.00 #N/A #N/A
FEE 30-Sep-97 0 #N/A #N/A
FEE 30-Sep-98 0 #N/A #N/A
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 #N/A #N/A
3.000
FORMULA: 1000*(1+T)= #N/A - (0.85 * 1000 * 0.03)
= #N/A
T = #N/A
R = #N/A
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
NLIC VAII MONEY MARKET
29-Sep-94
TO NO. YEARS 5.000
30-Sep-99
<S> <C> <C> <C> <C> <C> <C>
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-94 1000.00 8.046496 124.27770
FEE 30-Sep-95 0 8.433137 0.00000
FEE 30-Sep-96 0 8.807079 0.00000
FEE 30-Sep-97 0 9.198658 0.00000
FEE 30-Sep-98 0 9.615596 0.00000
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 124.27770 1242.7770
5.000
FORMULA: 1000*(1+T)= 1242.7770
= 1242.7770
T = 4.44%
R = 24.28%
NLIC VAII HIGH YIELD
29-Sep-94
TO NO. YEARS 5.000
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-94 1000.00 7.814018 127.97513
FEE 30-Sep-95 0 8.719285 0.00000
FEE 30-Sep-96 0 9.642276 0.00000
FEE 30-Sep-97 0 10.832520 0.00000
FEE 30-Sep-98 0 10.301052 0.00000
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 127.97513 1279.7513
5.000
FORMULA: 1000*(1+T)= 1279.7513
= 1279.7513
T = 5.06%
R = 27.98%
NLIC VAII EQUITY
29-Sep-94
TO NO. YEARS 5.000
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-94 1000.00 3.160008 316.45493
FEE 30-Sep-95 0 4.265987 0.00000
FEE 30-Sep-96 0 4.811498 0.00000
FEE 30-Sep-97 0 6.740697 0.00000
FEE 30-Sep-98 0 7.404472 0.00000
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 316.45493 3164.5493
5.000
FORMULA: 1000*(1+T)= 3164.5493
= 3164.5493
T = 25.91%
R = 216.45%
NLIC VAII QUALITY INCOME
29-Sep-94
TO NO. YEARS 5.000
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-94 1000.00 7.020965 142.43056
FEE 30-Sep-95 0 8.243586 0.00000
FEE 30-Sep-96 0 8.495600 0.00000
FEE 30-Sep-97 0 9.370793 0.00000
FEE 30-Sep-98 0 10.446421 0.00000
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 142.43056 1424.3056
5.000
FORMULA: 1000*(1+T)= 1424.3056
= 1424.3056
T = 7.33%
R = 42.43%
NLIC VAII STRATEGIST
29-Sep-94
TO NO. YEARS 5.000
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-94 1000.00 5.322340 187.88727
FEE 30-Sep-95 0 5.623176 0.00000
FEE 30-Sep-96 0 6.314257 0.00000
FEE 30-Sep-97 0 7.650070 0.00000
FEE 30-Sep-98 0 8.042556 0.00000
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 187.88727 1878.8727
5.000
FORMULA: 1000*(1+T)= 1878.8727
= 1878.8727
T = 13.44%
R = 87.89%
NLIC VAII DIVIDEND GROWTH
29-Sep-94
TO NO. YEARS 5.000
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-94 1000.00 4.478536 223.28725
FEE 30-Sep-95 0 5.556688 0.00000
FEE 30-Sep-96 0 6.754959 0.00000
FEE 30-Sep-97 0 9.079680 0.00000
FEE 30-Sep-98 0 9.130986 0.00000
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 223.28725 2232.8725
5.000
FORMULA: 1000*(1+T)= 2232.8725
= 2232.8725
T = 17.43%
R = 123.29%
NLIC VAII UTILITIES
29-Sep-94
TO NO. YEARS 5.000
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-94 1000.00 4.680979 213.63054
FEE 30-Sep-95 0 5.565954 0.00000
FEE 30-Sep-96 0 5.959659 0.00000
FEE 30-Sep-97 0 7.165790 0.00000
FEE 30-Sep-98 0 8.933279 0.00000
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 213.63054 2136.3054
5.000
FORMULA: 1000*(1+T)= 2136.3054
= 2136.3054
T = 16.39%
R = 113.63%
NLIC VAII EUROPEAN GROWTH
29-Sep-94
TO NO. YEARS 5.000
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-94 1000.00 4.241043 235.79103
FEE 30-Sep-95 0 5.220766 0.00000
FEE 30-Sep-96 0 6.226190 0.00000
FEE 30-Sep-97 0 8.076245 0.00000
FEE 30-Sep-98 0 8.380422 0.00000
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 235.79103 2357.9103
5.000
FORMULA: 1000*(1+T)= 2357.9103
= 2357.9103
T = 18.71%
R = 135.79%
NLIC VAII CAPITAL GROWTH
29-Sep-94
TO NO. YEARS 5.000
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-94 1000.00 4.499798 222.23218
FEE 30-Sep-95 0 5.423534 0.00000
FEE 30-Sep-96 0 6.563788 0.00000
FEE 30-Sep-97 0 8.703496 0.00000
FEE 30-Sep-98 0 8.004773 0.00000
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 222.23218 2222.3218
5.000
FORMULA: 1000*(1+T)= 2222.3218
= 2222.3218
T = 17.32%
R = 122.23%
NLIC VAII PACIFIC GROWTH
29-Sep-94
TO NO. YEARS 5.000
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-94 1000.00 13.524316 73.94089
FEE 30-Sep-95 0 12.890934 0.00000
FEE 30-Sep-96 0 13.300528 0.00000
FEE 30-Sep-97 0 11.430179 0.00000
FEE 30-Sep-98 0 5.864031 0.00000
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 73.94089 739.4089
5.000
FORMULA: 1000*(1+T)= 739.4089
= 739.4089
T = -5.86%
R = -26.06%
NLIC VAII GLOBAL DIVIDEND GROWTH
29-Sep-94
TO NO. YEARS 5.000
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-94 1000.00 5.363362 186.45022
FEE 30-Sep-95 0 6.065978 0.00000
FEE 30-Sep-96 0 6.997897 0.00000
FEE 30-Sep-97 0 8.687398 0.00000
FEE 30-Sep-98 0 7.899315 0.00000
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 186.45022 1864.5022
5.000
FORMULA: 1000*(1+T)= 1864.5022
= 1864.5022
T = 13.27%
R = 86.45%
NLIC VAII CAPITAL APPRECIATION
29-Sep-94
TO NO. YEARS 5.000
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-94 1000.00 #VALUE! #VALUE!
FEE 30-Sep-95 0 #VALUE! #VALUE!
FEE 30-Sep-96 0 #VALUE! #VALUE!
FEE 30-Sep-97 0 12.364355 0.00000
FEE 30-Sep-98 0 9.387763 0.00000
FEE 30-Sep-99 0 10.871412 0.00000
RESULTING VALUE 30-Sep-99 10.871412 #VALUE! #VALUE!
5.000
FORMULA: 1000*(1+T)= #VALUE!
= #VALUE!
T = N/A
R = N/A
NLIC VAII INCOME BUILDER
29-Sep-94
TO NO. YEARS 5.000
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-94 1000.00 #VALUE! #VALUE!
FEE 30-Sep-95 0 #VALUE! #VALUE!
FEE 30-Sep-96 0 #VALUE! #VALUE!
FEE 30-Sep-97 0 9.420802 0.00000
FEE 30-Sep-98 0 9.051291 0.00000
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 #VALUE! #VALUE!
5.000
FORMULA: 1000*(1+T)= #VALUE!
= #VALUE!
T = N/A
R = N/A
NLIC VAII EQUITY GROWTH
29-Sep-94
TO NO. YEARS 5.000
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-94 1000.00 #VALUE! #VALUE!
FEE 30-Sep-95 0 #VALUE! #VALUE!
FEE 30-Sep-96 0 #VALUE! #VALUE!
FEE 30-Sep-97 0 7.166680 0.00000
FEE 30-Sep-98 0 7.177458 0.00000
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 #VALUE! #VALUE!
5.000
FORMULA: 1000*(1+T)= #VALUE!
= #VALUE!
T = N/A
R = N/A
NLIC VAII INTERNATIONAL MAGNUM
29-Sep-94
TO NO. YEARS 5.000
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-94 1000.00 #VALUE! #VALUE!
FEE 30-Sep-95 0 #VALUE! #VALUE!
FEE 30-Sep-96 0 #VALUE! #VALUE!
FEE 30-Sep-97 0 9.049844 0.00000
FEE 30-Sep-98 0 8.207534 0.00000
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 #VALUE! #VALUE!
5.000
FORMULA: 1000*(1+T)= #VALUE!
= #VALUE!
T = N/A
R = N/A
NLIC VAII EMERGING MARKETS
29-Sep-94
TO NO. YEARS 5.000
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-94 1000.00 #VALUE! #VALUE!
FEE 30-Sep-95 0 #VALUE! #VALUE!
FEE 30-Sep-96 0 #VALUE! #VALUE!
FEE 30-Sep-97 0 12.676256 0.00000
FEE 30-Sep-98 0 6.784469 0.00000
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 #VALUE! #VALUE!
5.000
FORMULA: 1000*(1+T)= #VALUE!
= #VALUE!
T = N/A
R = N/A
NLIC VAII EMERGING GROWTH
29-Sep-94
TO NO. YEARS 5.000
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-94 1000.00 #VALUE! #VALUE!
FEE 30-Sep-95 0 4.024248 0.00000
FEE 30-Sep-96 0 5.027893 0.00000
FEE 30-Sep-97 0 6.144247 0.00000
FEE 30-Sep-98 0 6.180559 0.00000
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 #VALUE! #VALUE!
5.000
FORMULA: 1000*(1+T)= #VALUE!
= #VALUE!
T = N/A
R = N/A
NLIC VAII REAL ESTATE
29-Sep-94
TO NO. YEARS 5.000
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-94 1000.00 #VALUE! #VALUE!
FEE 30-Sep-95 0 #VALUE! #VALUE!
FEE 30-Sep-96 0 #VALUE! #VALUE!
FEE 30-Sep-97 0 11.487982 0.00000
FEE 30-Sep-98 0 10.098299 0.00000
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 #VALUE! #VALUE!
5.000
FORMULA: 1000*(1+T)= #VALUE!
= #VALUE!
T = N/A
R = N/A
NLIC VAII COMPETITIVE EDGE
29-Sep-94
TO NO. YEARS 5.000
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-94 1000.00 #VALUE! #VALUE!
FEE 30-Sep-95 0 #VALUE! #VALUE!
FEE 30-Sep-96 0 #VALUE! #VALUE!
FEE 30-Sep-97 0 #VALUE! #VALUE!
FEE 30-Sep-98 0 8.003985 0.00000
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 #VALUE! #VALUE!
5.000
FORMULA: 1000*(1+T)= #VALUE!
= #VALUE!
T = N/A
R = N/A
NLIC VAII S&P 500 INDEX
29-Sep-94
TO NO. YEARS 5.000
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-94 1000.00 #VALUE! #VALUE!
FEE 30-Sep-95 0 #VALUE! #VALUE!
FEE 30-Sep-96 0 #VALUE! #VALUE!
FEE 30-Sep-97 0 #VALUE! #VALUE!
FEE 30-Sep-98 0 7.954654 0.00000
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 #VALUE! #VALUE!
5.000
FORMULA: 1000*(1+T)= #VALUE!
= #VALUE!
T = N/A
R = N/A
NLIC VAII AGGRESSIVE EQUITY
29-Sep-94
TO NO. YEARS 5.000
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-94 1000.00 #VALUE! #VALUE!
FEE 30-Sep-95 0 #VALUE! #VALUE!
FEE 30-Sep-96 0 #VALUE! #VALUE!
FEE 30-Sep-97 0 #VALUE! #VALUE!
FEE 30-Sep-98 0 #VALUE! #VALUE!
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 #VALUE! #VALUE!
5.000
FORMULA: 1000*(1+T)= #VALUE!
= #VALUE!
T = N/A
R = N/A
NLIC VAII SHORT TERM BOND
29-Sep-94
TO NO. YEARS 5.000
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-94 1000.00 #VALUE! #VALUE!
FEE 30-Sep-95 0 #VALUE! #VALUE!
FEE 30-Sep-96 0 #VALUE! #VALUE!
FEE 30-Sep-97 0 #VALUE! #VALUE!
FEE 30-Sep-98 0 #VALUE! #VALUE!
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 #VALUE! #VALUE!
5.000
FORMULA: 1000*(1+T)= #VALUE!
= #VALUE!
T = N/A
R = N/A
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
NLIC VAII MONEY MARKET
29-Sep-89
TO NO. YEARS 10.000
30-Sep-99
<S> <C> <C> <C> <C> <C> <C>
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 29-Sep-89 1000.00 6.560073 152.43733
FEE 29-Sep-90 0 7.042324 0.00000
FEE 29-Sep-91 0 7.444139 0.00000
FEE 29-Sep-92 0 7.683960 0.00000
FEE 29-Sep-93 0 7.844508 0.00000
FEE 29-Sep-94 0 8.045685 0.00000
FEE 29-Sep-95 0 8.433137 0.00000
FEE 29-Sep-96 0 8.803948 0.00000
FEE 29-Sep-97 0 9.197528 0.00000
FEE 29-Sep-98 0 9.614443 0.00000
FEE 29-Sep-99 0 9.998862 0.00000
RESULTING VALUE 29-Sep-99 9.998862 152.43733 1524.1998
10.000
FORMULA: 1000*(1+T)= 1524.1998 - (0.85 * 1000 * 0)
= 1524.19982
T = 4.30%
R = 52.42%
NLIC VAII HIGH YIELD
29-Sep-89
TO NO. YEARS 10.000
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 29-Sep-89 1000.00 5.389103 185.55965
FEE 29-Sep-90 0 4.202439 0.00000
FEE 29-Sep-91 0 5.148535 0.00000
FEE 29-Sep-92 0 6.632034 0.00000
FEE 29-Sep-93 0 7.626330 0.00000
FEE 29-Sep-94 0 7.799165 0.00000
FEE 29-Sep-95 0 8.719285 0.00000
FEE 29-Sep-96 0 9.622153 0.00000
FEE 29-Sep-97 0 10.803533 0.00000
FEE 29-Sep-98 0 10.310157 0.00000
FEE 29-Sep-99 0 10.046585 0.00000
RESULTING VALUE 29-Sep-99 10.046585 185.55965 1864.2408
10.000
FORMULA: 1000*(1+T)= 1864.2408 - (0.85 * 1000 * 0)
= 1864.24083
T = 6.43%
R = 86.42%
NLIC VAII EQUITY
29-Sep-89
TO NO. YEARS 10.000
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 29-Sep-89 1000.00 1.860107 537.60355
FEE 29-Sep-90 0 1.619645 0.00000
FEE 29-Sep-91 0 2.456574 0.00000
FEE 29-Sep-92 0 2.506898 0.00000
FEE 29-Sep-93 0 3.490928 0.00000
FEE 29-Sep-94 0 3.150280 0.00000
FEE 29-Sep-95 0 4.265987 0.00000
FEE 29-Sep-96 0 4.807855 0.00000
FEE 29-Sep-97 0 6.742533 0.00000
FEE 29-Sep-98 0 7.491743 0.00000
FEE 29-Sep-99 0 9.958555 0.00000
RESULTING VALUE 29-Sep-99 9.958555 537.60355 5353.7547
10.000
FORMULA: 1000*(1+T)= 5353.7547 - (0.85 * 1000 * 0)
= 5353.75471
T = 18.27%
R = 435.38%
NLIC VAII QUALITY INCOME
29-Sep-89
TO NO. YEARS 10.000
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 29-Sep-89 1000.00 4.907355 203.77578
FEE 29-Sep-90 0 5.132647 0.00000
FEE 29-Sep-91 0 5.963222 0.00000
FEE 29-Sep-92 0 6.765753 0.00000
FEE 29-Sep-93 0 7.700460 0.00000
FEE 29-Sep-94 0 7.012340 0.00000
FEE 29-Sep-95 0 8.243586 0.00000
FEE 29-Sep-96 0 8.495770 0.00000
FEE 29-Sep-97 0 9.378949 0.00000
FEE 29-Sep-98 0 10.340656 0.00000
FEE 29-Sep-99 0 9.944784 0.00000
RESULTING VALUE 29-Sep-99 9.944784 203.77578 2026.5060
10.000
FORMULA: 1000*(1+T)= 2026.5060 - (0.85 * 1000 * 0)
= 2026.50605
T = 7.32%
R = 102.65%
NLIC VAII STRATEGIST
29-Sep-89
TO NO. YEARS 10.000
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 29-Sep-89 1000.00 3.386664 295.27580
FEE 29-Sep-90 0 3.281322 0.00000
FEE 29-Sep-91 0 4.171705 0.00000
FEE 29-Sep-92 0 4.635473 0.00000
FEE 29-Sep-93 0 5.072730 0.00000
FEE 29-Sep-94 0 5.322442 0.00000
FEE 29-Sep-95 0 5.623176 0.00000
FEE 29-Sep-96 0 6.312829 0.00000
FEE 29-Sep-97 0 7.692698 0.00000
FEE 29-Sep-98 0 8.230388 0.00000
FEE 29-Sep-99 0 9.928570 0.00000
RESULTING VALUE 29-Sep-99 9.928570 295.27580 2931.6665
10.000
FORMULA: 1000*(1+T)= 2931.6665 - (0.85 * 1000 * 0)
= 2931.66648
T = 11.36%
R = 193.17%
NLIC VAII DIVIDEND GROWTH
29-Sep-89
TO NO. YEARS 10.000
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 29-Sep-89 1000.00 #VALUE! #VALUE!
FEE 29-Sep-90 0 2.699620 0.00000
FEE 29-Sep-91 0 3.508117 0.00000
FEE 29-Sep-92 0 3.909097 0.00000
FEE 29-Sep-93 0 4.393036 0.00000
FEE 29-Sep-94 0 4.478622 0.00000
FEE 29-Sep-95 0 5.556688 0.00000
FEE 29-Sep-96 0 6.737828 0.00000
FEE 29-Sep-97 0 9.110829 0.00000
FEE 29-Sep-98 0 9.402243 0.00000
FEE 29-Sep-99 0 9.910732 0.00000
RESULTING VALUE 29-Sep-99 9.910732 #VALUE! #VALUE!
10.000
FORMULA: 1000*(1+T)= #VALUE! - (0.85 * 1000 * 0)
= #VALUE!
T = N/A
R = N/A
NLIC VAII UTILITIES
29-Sep-89
TO NO. YEARS 10.000
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 29-Sep-89 1000.00 #VALUE! #VALUE!
FEE 29-Sep-90 0 3.037406 0.00000
FEE 29-Sep-91 0 3.679613 0.00000
FEE 29-Sep-92 0 4.242264 0.00000
FEE 29-Sep-93 0 5.339119 0.00000
FEE 29-Sep-94 0 4.661836 0.00000
FEE 29-Sep-95 0 5.565954 0.00000
FEE 29-Sep-96 0 5.955231 0.00000
FEE 29-Sep-97 0 7.168411 0.00000
FEE 29-Sep-98 0 8.986400 0.00000
FEE 29-Sep-99 0 9.888572 0.00000
RESULTING VALUE 29-Sep-99 9.888572 #VALUE! #VALUE!
10.000
FORMULA: 1000*(1+T)= #VALUE! - (0.85 * 1000 * 0)
= #VALUE!
T = N/A
R = N/A
NLIC VAII EUROPEAN GROWTH
29-Sep-89
TO NO. YEARS 10.000
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 29-Sep-89 1000.00 #VALUE! #VALUE!
FEE 29-Sep-90 0 #VALUE! #VALUE!
FEE 29-Sep-91 0 2.682390 0.00000
FEE 29-Sep-92 0 2.837819 0.00000
FEE 29-Sep-93 0 3.560373 0.00000
FEE 29-Sep-94 0 4.241125 0.00000
FEE 29-Sep-95 0 5.220766 0.00000
FEE 29-Sep-96 0 6.194630 0.00000
FEE 29-Sep-97 0 8.009011 0.00000
FEE 29-Sep-98 0 8.578157 0.00000
FEE 29-Sep-99 0 9.948479 0.00000
RESULTING VALUE 29-Sep-99 9.948479 #VALUE! #VALUE!
10.000
FORMULA: 1000*(1+T)= #VALUE! - (0.85 * 1000 * 0)
= #VALUE!
T = N/A
R = N/A
NLIC VAII CAPITAL GROWTH
29-Sep-89
TO NO. YEARS 10.000
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 29-Sep-89 1000.00 #VALUE! #VALUE!
FEE 29-Sep-90 0 #VALUE! #VALUE!
FEE 29-Sep-91 0 4.206090 0.00000
FEE 29-Sep-92 0 4.479353 0.00000
FEE 29-Sep-93 0 4.316431 0.00000
FEE 29-Sep-94 0 4.484327 0.00000
FEE 29-Sep-95 0 5.423534 0.00000
FEE 29-Sep-96 0 6.548394 0.00000
FEE 29-Sep-97 0 8.685910 0.00000
FEE 29-Sep-98 0 8.251237 0.00000
FEE 29-Sep-99 0 9.957156 0.00000
RESULTING VALUE 29-Sep-99 9.957156 #VALUE! #VALUE!
10.000
FORMULA: 1000*(1+T)= #VALUE! - (0.85 * 1000 * 0)
= #VALUE!
T = N/A
R = N/A
NLIC VAII PACIFIC GROWTH
29-Sep-89
TO NO. YEARS 10.000
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 29-Sep-89 1000.00 #VALUE! #VALUE!
FEE 29-Sep-90 0 #VALUE! #VALUE!
FEE 29-Sep-91 0 #VALUE! #VALUE!
FEE 29-Sep-92 0 #VALUE! #VALUE!
FEE 29-Sep-93 0 #VALUE! #VALUE!
FEE 29-Sep-94 0 13.591266 0.00000
FEE 29-Sep-95 0 12.890934 0.00000
FEE 29-Sep-96 0 13.220673 0.00000
FEE 29-Sep-97 0 11.362761 0.00000
FEE 29-Sep-98 0 5.892750 0.00000
FEE 29-Sep-99 0 9.914229 0.00000
RESULTING VALUE 29-Sep-99 9.914229 #VALUE! #VALUE!
10.000
FORMULA: 1000*(1+T)= #VALUE! - (0.85 * 1000 * 0)
= #VALUE!
T = N/A
R = N/A
NLIC VAII GLOBAL DIVIDEND GROWTH
29-Sep-89
TO NO. YEARS 10.000
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 29-Sep-89 1000.00 #VALUE! #VALUE!
FEE 29-Sep-90 0 #VALUE! #VALUE!
FEE 29-Sep-91 0 #VALUE! #VALUE!
FEE 29-Sep-92 0 #VALUE! #VALUE!
FEE 29-Sep-93 0 #VALUE! #VALUE!
FEE 29-Sep-94 0 5.352801 0.00000
FEE 29-Sep-95 0 6.065978 0.00000
FEE 29-Sep-96 0 6.983742 0.00000
FEE 29-Sep-97 0 8.649265 0.00000
FEE 29-Sep-98 0 8.096748 0.00000
FEE 29-Sep-99 0 9.886563 0.00000
RESULTING VALUE 29-Sep-99 9.886563 #VALUE! #VALUE!
10.000
FORMULA: 1000*(1+T)= #VALUE! - (0.85 * 1000 * 0)
= #VALUE!
T = N/A
R = N/A
NLIC VAII CAPITAL APPRECIATION
29-Sep-89
TO NO. YEARS 10.000
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 29-Sep-89 1000.00 #VALUE! #VALUE!
FEE 29-Sep-90 0 #VALUE! #VALUE!
FEE 29-Sep-91 0 #VALUE! #VALUE!
FEE 29-Sep-92 0 #VALUE! #VALUE!
FEE 29-Sep-93 0 #VALUE! #VALUE!
FEE 29-Sep-94 0 #VALUE! #VALUE!
FEE 29-Sep-95 0 #VALUE! #VALUE!
FEE 29-Sep-96 0 #VALUE! #VALUE!
FEE 29-Sep-97 0 12.344996 0.00000
FEE 29-Sep-98 0 9.574896 0.00000
FEE 29-Sep-99 0 10.871412 0.00000
RESULTING VALUE 29-Sep-99 10.871412 #VALUE! #VALUE!
10.000
FORMULA: 1000*(1+T)= #VALUE! - (0.85 * 1000 * 0)
= #VALUE!
T = N/A
R = N/A
NLIC VAII INCOME BUILDER
29-Sep-89
TO NO. YEARS 10.000
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 29-Sep-89 1000.00 #VALUE! #VALUE!
FEE 29-Sep-90 0 #VALUE! #VALUE!
FEE 29-Sep-91 0 #VALUE! #VALUE!
FEE 29-Sep-92 0 #VALUE! #VALUE!
FEE 29-Sep-93 0 #VALUE! #VALUE!
FEE 29-Sep-94 0 #VALUE! #VALUE!
FEE 29-Sep-95 0 #VALUE! #VALUE!
FEE 29-Sep-96 0 #VALUE! #VALUE!
FEE 29-Sep-97 0 9.415857 0.00000
FEE 29-Sep-98 0 9.188357 0.00000
FEE 29-Sep-99 0 9.959090 0.00000
RESULTING VALUE 29-Sep-99 9.959090 #VALUE! #VALUE!
10.000
FORMULA: 1000*(1+T)= #VALUE! - (0.85 * 1000 * 0)
= #VALUE!
T = N/A
R = N/A
NLIC VAII EQUITY GROWTH
29-Sep-89
TO NO. YEARS 10.000
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 29-Sep-89 1000.00 #VALUE! #VALUE!
FEE 29-Sep-90 0 #VALUE! #VALUE!
FEE 29-Sep-91 0 #VALUE! #VALUE!
FEE 29-Sep-92 0 #VALUE! #VALUE!
FEE 29-Sep-93 0 #VALUE! #VALUE!
FEE 29-Sep-94 0 #VALUE! #VALUE!
FEE 29-Sep-95 0 #VALUE! #VALUE!
FEE 29-Sep-96 0 #VALUE! #VALUE!
FEE 29-Sep-97 0 7.166818 0.00000
FEE 29-Sep-98 0 7.387334 0.00000
FEE 29-Sep-99 0 9.820683 0.00000
RESULTING VALUE 29-Sep-99 9.820683 #VALUE! #VALUE!
10.000
FORMULA: 1000*(1+T)= #VALUE! - (0.85 * 1000 * 0)
= #VALUE!
T = N/A
R = N/A
NLIC VAII INTERNATIONAL MAGNUM
29-Sep-89
TO NO. YEARS 10.000
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 29-Sep-89 1000.00 #VALUE! #VALUE!
FEE 29-Sep-90 0 #VALUE! #VALUE!
FEE 29-Sep-91 0 #VALUE! #VALUE!
FEE 29-Sep-92 0 #VALUE! #VALUE!
FEE 29-Sep-93 0 #VALUE! #VALUE!
FEE 29-Sep-94 0 #VALUE! #VALUE!
FEE 29-Sep-95 0 #VALUE! #VALUE!
FEE 29-Sep-96 0 #VALUE! #VALUE!
FEE 29-Sep-97 0 9.018837 0.00000
FEE 29-Sep-98 0 8.344221 0.00000
FEE 29-Sep-99 0 9.791851 0.00000
RESULTING VALUE 29-Sep-99 9.791851 #VALUE! #VALUE!
10.000
FORMULA: 1000*(1+T)= #VALUE! - (0.85 * 1000 * 0)
= #VALUE!
T = N/A
R = N/A
NLIC VAII EMERGING MARKETS
29-Sep-89
TO NO. YEARS 10.000
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 29-Sep-89 1000.00 #VALUE! #VALUE!
FEE 29-Sep-90 0 #VALUE! #VALUE!
FEE 29-Sep-91 0 #VALUE! #VALUE!
FEE 29-Sep-92 0 #VALUE! #VALUE!
FEE 29-Sep-93 0 #VALUE! #VALUE!
FEE 29-Sep-94 0 #VALUE! #VALUE!
FEE 29-Sep-95 0 #VALUE! #VALUE!
FEE 29-Sep-96 0 #VALUE! #VALUE!
FEE 29-Sep-97 0 12.665979 0.00000
FEE 29-Sep-98 0 6.958567 0.00000
FEE 29-Sep-99 0 10.075789 0.00000
RESULTING VALUE 29-Sep-99 10.075789 #VALUE! #VALUE!
10.000
FORMULA: 1000*(1+T)= #VALUE! - (0.85 * 1000 * 0)
= #VALUE!
T = N/A
R = N/A
NLIC VAII EMERGING GROWTH
29-Sep-89
TO NO. YEARS 10.000
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 29-Sep-89 1000.00 #VALUE! #VALUE!
FEE 29-Sep-90 0 #VALUE! #VALUE!
FEE 29-Sep-91 0 #VALUE! #VALUE!
FEE 29-Sep-92 0 #VALUE! #VALUE!
FEE 29-Sep-93 0 #VALUE! #VALUE!
FEE 29-Sep-94 0 #VALUE! #VALUE!
FEE 29-Sep-95 0 4.024248 0.00000
FEE 29-Sep-96 0 5.045912 0.00000
FEE 29-Sep-97 0 6.147886 0.00000
FEE 29-Sep-98 0 6.338083 0.00000
FEE 29-Sep-99 0 10.052295 0.00000
RESULTING VALUE 29-Sep-99 10.052295 #VALUE! #VALUE!
10.000
FORMULA: 1000*(1+T)= #VALUE! - (0.85 * 1000 * 0)
= #VALUE!
T = N/A
R = N/A
NLIC VAII REAL ESTATE
29-Sep-89
TO NO. YEARS 10.000
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 29-Sep-89 1000.00 #VALUE! #VALUE!
FEE 29-Sep-90 0 #VALUE! #VALUE!
FEE 29-Sep-91 0 #VALUE! #VALUE!
FEE 29-Sep-92 0 #VALUE! #VALUE!
FEE 29-Sep-93 0 #VALUE! #VALUE!
FEE 29-Sep-94 0 #VALUE! #VALUE!
FEE 29-Sep-95 0 #VALUE! #VALUE!
FEE 29-Sep-96 0 #VALUE! #VALUE!
FEE 29-Sep-97 0 11.349310 0.00000
FEE 29-Sep-98 0 10.119144 0.00000
FEE 29-Sep-99 0 9.968973 0.00000
RESULTING VALUE 29-Sep-99 9.968973 #VALUE! #VALUE!
10.000
FORMULA: 1000*(1+T)= #VALUE! - (0.85 * 1000 * 0)
= #VALUE!
T = N/A
R = N/A
NLIC VAII COMPETITIVE EDGE
29-Sep-89
TO NO. YEARS 10.000
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 29-Sep-89 1000.00 #VALUE! #VALUE!
FEE 29-Sep-90 0 #VALUE! #VALUE!
FEE 29-Sep-91 0 #VALUE! #VALUE!
FEE 29-Sep-92 0 #VALUE! #VALUE!
FEE 29-Sep-93 0 #VALUE! #VALUE!
FEE 29-Sep-94 0 #VALUE! #VALUE!
FEE 29-Sep-95 0 #VALUE! #VALUE!
FEE 29-Sep-96 0 #VALUE! #VALUE!
FEE 29-Sep-97 0 #VALUE! #VALUE!
FEE 29-Sep-98 0 8.255178 0.00000
FEE 29-Sep-99 0 9.923487 0.00000
RESULTING VALUE 29-Sep-99 9.923487 #VALUE! #VALUE!
10.000
FORMULA: 1000*(1+T)= #VALUE! - (0.85 * 1000 * 0)
= #VALUE!
T = N/A
R = N/A
NLIC VAII S&P 500 INDEX
29-Sep-89
TO NO. YEARS 10.000
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 29-Sep-89 1000.00 #VALUE! #VALUE!
FEE 29-Sep-90 0 #VALUE! #VALUE!
FEE 29-Sep-91 0 #VALUE! #VALUE!
FEE 29-Sep-92 0 #VALUE! #VALUE!
FEE 29-Sep-93 0 #VALUE! #VALUE!
FEE 29-Sep-94 0 #VALUE! #VALUE!
FEE 29-Sep-95 0 #VALUE! #VALUE!
FEE 29-Sep-96 0 #VALUE! #VALUE!
FEE 29-Sep-97 0 #VALUE! #VALUE!
FEE 29-Sep-98 0 8.204206 0.00000
FEE 29-Sep-99 0 9.889171 0.00000
RESULTING VALUE 29-Sep-99 9.889171 #VALUE! #VALUE!
10.000
FORMULA: 1000*(1+T)= #VALUE! - (0.85 * 1000 * 0)
= #VALUE!
T = N/A
R = N/A
NLIC VAII AGGRESSIVE EQUITY
29-Sep-89
TO NO. YEARS 10.000
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 29-Sep-89 1000.00 #VALUE! #VALUE!
FEE 29-Sep-90 0 #VALUE! #VALUE!
FEE 29-Sep-91 0 #VALUE! #VALUE!
FEE 29-Sep-92 0 #VALUE! #VALUE!
FEE 29-Sep-93 0 #VALUE! #VALUE!
FEE 29-Sep-94 0 #VALUE! #VALUE!
FEE 29-Sep-95 0 #VALUE! #VALUE!
FEE 29-Sep-96 0 #VALUE! #VALUE!
FEE 29-Sep-97 0 #VALUE! #VALUE!
FEE 29-Sep-98 0 #VALUE! #VALUE!
FEE 29-Sep-99 0 9.990520 0.00000
RESULTING VALUE 29-Sep-99 9.990520 #VALUE! #VALUE!
10.000
FORMULA: 1000*(1+T)= #VALUE! - (0.85 * 1000 * 0)
= #VALUE!
T = N/A
R = N/A
NLIC VAII SHORT TERM BOND
29-Sep-89
TO NO. YEARS 10.000
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 29-Sep-89 1000.00 #VALUE! #VALUE!
FEE 29-Sep-90 0 #VALUE! #VALUE!
FEE 29-Sep-91 0 #VALUE! #VALUE!
FEE 29-Sep-92 0 #VALUE! #VALUE!
FEE 29-Sep-93 0 #VALUE! #VALUE!
FEE 29-Sep-94 0 #VALUE! #VALUE!
FEE 29-Sep-95 0 #VALUE! #VALUE!
FEE 29-Sep-96 0 #VALUE! #VALUE!
FEE 29-Sep-97 0 #VALUE! #VALUE!
FEE 29-Sep-98 0 #VALUE! #VALUE!
FEE 29-Sep-99 0 9.987590 0.00000
RESULTING VALUE 29-Sep-99 9.987590 #VALUE! #VALUE!
10.000
FORMULA: 1000*(1+T)= #VALUE! - (0.85 * 1000 * 0)
= #VALUE!
T = N/A
R = N/A
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
NLIC VAII MONEY MARKET
09-Mar-84
TO NO. YEARS 15.559
30-Sep-99
<S> <C> <C> <C> <C> <C> <C> <C>
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 09-Mar-84 1000.00 4.689954 213.22171
1 FEE 09-Mar-85 0 4.919141 0.00000 0.06
2 FEE 09-Mar-86 0 5.259910 0.00000 0.05
3 FEE 09-Mar-87 0 5.541721 0.00000 0.04
4 09-Mar-88 0 5.861315 0.00000 0.03
5 09-Mar-89 0 6.263883 0.00000 0.02
6 09-Mar-90 0 6.775341 0.00000 0.01
7 09-Mar-91 0 7.242706 0.00000 0
8 09-Mar-92 0 7.571383 0.00000 0
9 09-Mar-93 0 7.759009 0.00000 0
10 09-Mar-94 0 7.915125 0.00000 0
11 09-Mar-95 0 8.204229 0.00000 0
12 09-Mar-96 0 8.600931 0.00000 0
13 09-Mar-97 0 8.971380 0.00000 0
14 FEE 09-Mar-98 0 9.380685 0.00000 0
15 FEE 09-Mar-99 0 9.787615 0.00000 0
RESULTING VALUE 30-Sep-99 10.000000 213.22171 2132.2171
15.559
FORMULA: 1000*(1+T)= 2132.2171
= 2132.2171
T = 4.99%
R = 113.22%
NLIC VAII HIGH YIELD
09-Mar-84
TO NO. YEARS 15.559
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 09-Mar-84 1000.00 3.299191 303.10457
1 FEE 09-Mar-85 0 3.721854 0.00000 0.06
2 FEE 09-Mar-86 0 4.753759 0.00000 0.05
3 FEE 09-Mar-87 0 5.646135 0.00000 0.04
4 09-Mar-88 0 5.403240 0.00000 0.03
5 09-Mar-89 0 5.806749 0.00000 0.02
6 09-Mar-90 0 4.573478 0.00000 0.01
7 09-Mar-91 0 4.193844 0.00000 0
8 09-Mar-92 0 6.405357 0.00000 0
9 09-Mar-93 0 7.029872 0.00000 0
10 09-Mar-94 0 8.313048 0.00000 0
11 09-Mar-95 0 7.928241 0.00000 0
12 09-Mar-96 0 9.125973 0.00000 0
13 09-Mar-97 0 9.915545 0.00000 0
14 FEE 09-Mar-98 0 11.191101 0.00000 0
15 FEE 09-Mar-99 0 10.124663 0.00000 0
RESULTING VALUE 30-Sep-99 10.000000 303.10457 3031.0457
15.559
FORMULA: 1000*(1+T)= 3031.0457
= 3031.0457
T = 7.39%
R = 203.10%
NLIC VAII EQUITY
09-Mar-84
TO NO. YEARS 15.559
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 09-Mar-84 1000.00 1.002828 997.17978
1 FEE 09-Mar-85 0 1.153612 0.00000 0.06
2 FEE 09-Mar-86 0 1.486811 0.00000 0.05
3 FEE 09-Mar-87 0 1.858614 0.00000 0.04
4 09-Mar-88 0 1.607036 0.00000 0.03
5 09-Mar-89 0 1.660078 0.00000 0.02
6 09-Mar-90 0 1.800534 0.00000 0.01
7 09-Mar-91 0 2.121325 0.00000 0
8 09-Mar-92 0 2.621928 0.00000 0
9 09-Mar-93 0 2.959158 0.00000 0
10 09-Mar-94 0 3.482916 0.00000 0
11 09-Mar-95 0 3.261274 0.00000 0
12 09-Mar-96 0 4.474597 0.00000 0
13 09-Mar-97 0 5.369864 0.00000 0
14 FEE 09-Mar-98 0 7.233758 0.00000 0
15 FEE 09-Mar-99 0 9.584579 0.00000 0
RESULTING VALUE 30-Sep-99 10.000000 997.17978 9971.7978
15.559
FORMULA: 1000*(1+T)= 9971.7978
= 9971.7978
T = 15.93%
R = 897.18%
NLIC VAII QUALITY INCOME
01-Mar-87
TO NO. YEARS 12.583
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 01-Mar-87 1000.00 4.133065 241.95119
1 FEE 01-Mar-88 0 4.390489 0.00000 0.06
2 FEE 01-Mar-89 0 4.508277 0.00000 0.05
3 FEE 01-Mar-90 0 4.930182 0.00000 0.04
4 01-Mar-91 0 5.483994 0.00000 0.03
5 01-Mar-92 0 6.246978 0.00000 0.02
6 01-Mar-93 0 7.136867 0.00000 0.01
7 01-Mar-94 0 7.439821 0.00000 0
8 01-Mar-95 0 7.404343 0.00000 0
9 01-Mar-96 0 8.511161 0.00000 0
10 01-Mar-97 0 8.802089 0.00000 0
11 01-Mar-98 0 9.767004 0.00000 0
12 01-Mar-99 0 10.149403 0.00000 0
13 30-Sep-99 0 10.000000 0.00000 0
14 FEE N/A 0 N/A 0.00000 0
15 FEE N/A 0 N/A 0.00000 0
RESULTING VALUE 30-Sep-99 10.000000 241.95119 2419.5119
12.583
FORMULA: 1000*(1+T)= 2419.5119
= 2419.5119
T = 7.27%
R = 141.95%
NLIC VAII STRATEGIST
01-Mar-87
TO NO. YEARS 12.583
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 01-Mar-87 1000.00 2.796531 357.58591
1 FEE 01-Mar-88 0 3.028224 0.00000 0.06
2 FEE 01-Mar-89 0 3.185700 0.00000 0.05
3 FEE 01-Mar-90 0 3.461275 0.00000 0.04
4 01-Mar-91 0 3.904529 0.00000 0.03
5 01-Mar-92 0 4.493710 0.00000 0.02
6 01-Mar-93 0 4.857318 0.00000 0.01
7 01-Mar-94 0 5.249015 0.00000 0
8 01-Mar-95 0 5.417007 0.00000 0
9 01-Mar-96 0 6.009503 0.00000 0
10 01-Mar-97 0 6.911804 0.00000 0
11 01-Mar-98 0 8.036940 0.00000 0
12 01-Mar-99 0 9.549244 0.00000 0
13 30-Sep-99 0 10.000000 0.00000 0
14 FEE N/A 0 N/A 0.00000 0
15 FEE N/A 0 N/A 0.00000 0
RESULTING VALUE 30-Sep-99 10.000000 357.58591 3575.8591
12.583
FORMULA: 1000*(1+T)= 3575.8591
= 3575.8591
T = 10.66%
R = 257.59%
NLIC VAII DIVIDEND GROWTH
01-Mar-90
TO NO. YEARS 9.582
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 01-Mar-90 1000.00 3.207205 311.79796
1 FEE 01-Mar-91 0 3.323776 0.00000 0.06
2 FEE 01-Mar-92 0 3.753467 0.00000 0.05
3 FEE 01-Mar-93 0 4.149581 0.00000 0.04
4 01-Mar-94 0 4.492478 0.00000 0.03
5 01-Mar-95 0 4.656257 0.00000 0.02
6 01-Mar-96 0 6.281184 0.00000 0.01
7 01-Mar-97 0 7.563597 0.00000 0
8 01-Mar-98 0 9.662457 0.00000 0
9 01-Mar-99 0 10.097015 0.00000 0
10 30-Sep-99 0 10.000000 0.00000 0
11 N/A 0 N/A 0.00000 0
12 N/A 0 N/A 0.00000 0
13 N/A 0 N/A 0.00000 0
14 FEE N/A 0 N/A 0.00000 0
15 FEE N/A 0 N/A 0.00000 0
RESULTING VALUE 30-Sep-99 10.000000 311.79796 3117.9796
9.582
FORMULA: 1000*(1+T)= 3117.9796
= 3117.9796
T = 12.60%
R = 211.80%
NLIC VAII UTILITIES
01-Mar-90
TO NO. YEARS 9.582
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 01-Mar-90 1000.00 3.202770 312.22972
1 FEE 01-Mar-91 0 3.440078 0.00000 0.06
2 FEE 01-Mar-92 0 3.844279 0.00000 0.05
3 FEE 01-Mar-93 0 4.796442 0.00000 0.04
4 01-Mar-94 0 4.868115 0.00000 0.03
5 01-Mar-95 0 4.813285 0.00000 0.02
6 01-Mar-96 0 5.954941 0.00000 0.01
7 01-Mar-97 0 6.445313 0.00000 0
8 01-Mar-98 0 8.286313 0.00000 0
9 01-Mar-99 0 9.545912 0.00000 0
10 30-Sep-99 0 10.000000 0.00000 0
11 N/A 0 N/A 0.00000 0
12 N/A 0 N/A 0.00000 0
13 N/A 0 N/A 0.00000 0
14 FEE N/A 0 N/A 0.00000 0
15 FEE N/A 0 N/A 0.00000 0
RESULTING VALUE 30-Sep-99 10.000000 312.22972 3122.2972
9.582
FORMULA: 1000*(1+T)= 3122.2972
= 3122.2972
T = 12.62%
R = 212.23%
NLIC VAII EUROPEAN GROWTH
01-Mar-91
TO NO. YEARS 8.583
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 01-Mar-91 1000.00 2.717317 368.01007
1 FEE 01-Mar-92 0 2.818805 0.00000 0.06
2 FEE 01-Mar-93 0 2.957867 0.00000 0.05
3 FEE 01-Mar-94 0 4.094459 0.00000 0.04
4 01-Mar-95 0 4.369887 0.00000 0.03
5 01-Mar-96 0 5.596480 0.00000 0.02
6 01-Mar-97 0 6.901936 0.00000 0.01
7 01-Mar-98 0 8.950115 0.00000 0
8 01-Mar-99 0 9.588194 0.00000 0
9 30-Sep-99 0 10.000000 0.00000 0
10 N/A 0 N/A 0.00000 0
11 N/A 0 N/A 0.00000 0
12 N/A 0 N/A 0.00000 0
13 N/A 0 N/A 0.00000 0
14 FEE N/A 0 N/A 0.00000 0
15 FEE N/A 0 N/A 0.00000 0
RESULTING VALUE 30-Sep-99 10.000000 368.01007 3680.1007
8.583
FORMULA: 1000*(1+T)= 3680.1007
= 3680.1007
T = 16.39%
R = 268.01%
NLIC VAII CAPITAL GROWTH
01-Mar-91
TO NO. YEARS 8.583
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 01-Mar-91 1000.00 3.841415 260.32072
1 FEE 01-Mar-92 0 4.694482 0.00000 0.06
2 FEE 01-Mar-93 0 4.609380 0.00000 0.05
3 FEE 01-Mar-94 0 4.601057 0.00000 0.04
4 01-Mar-95 0 4.791239 0.00000 0.03
5 01-Mar-96 0 6.246074 0.00000 0.02
6 01-Mar-97 0 6.745309 0.00000 0.01
7 01-Mar-98 0 8.771444 0.00000 0
8 01-Mar-99 0 9.568406 0.00000 0
9 30-Sep-99 0 10.000000 0.00000 0
10 N/A 0 N/A 0.00000 0
11 N/A 0 N/A 0.00000 0
12 N/A 0 N/A 0.00000 0
13 N/A 0 N/A 0.00000 0
14 FEE N/A 0 N/A 0.00000 0
15 FEE N/A 0 N/A 0.00000 0
RESULTING VALUE 30-Sep-99 10.000000 260.32072 2603.2072
8.583
FORMULA: 1000*(1+T)= 2603.2072
= 2603.2072
T = 11.79%
R = 160.32%
NLIC VAII PACIFIC GROWTH
24-Feb-94
TO NO. YEARS 5.596
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 24-Feb-94 1000.00 13.299985 75.18806
1 FEE 24-Feb-95 0 11.669082 0.00000 0.06
2 FEE 24-Feb-96 0 14.001493 0.00000 0.05
3 FEE 24-Feb-97 0 13.450701 0.00000 0.04
4 24-Feb-98 0 8.282045 0.00000 0.03
5 24-Feb-99 0 7.131151 0.00000 0.02
6 30-Sep-99 0 10.000000 0.00000 0.01
7 N/A 0 N/A 0.00000 0
8 N/A 0 N/A 0.00000 0
9 N/A 0 N/A 0.00000 0
10 N/A 0 N/A 0.00000 0
11 N/A 0 N/A 0.00000 0
12 N/A 0 N/A 0.00000 0
13 N/A 0 N/A 0.00000 0
14 FEE N/A 0 N/A 0.00000 0
15 FEE N/A 0 N/A 0.00000 0
RESULTING VALUE 30-Sep-99 10.000000 75.18806 751.8806
5.596
FORMULA: 1000*(1+T)= 751.8806
= 751.8806
T = -4.97%
R = -24.81%
NLIC VAII GLOBAL DIVIDEND GROWTH
24-Feb-94
TO NO. YEARS 5.596
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 24-Feb-94 1000.00 5.267584 189.84035
1 FEE 24-Feb-95 0 5.284289 0.00000 0.06
2 FEE 24-Feb-96 0 6.584780 0.00000 0.05
3 FEE 24-Feb-97 0 7.517907 0.00000 0.04
4 24-Feb-98 0 8.631877 0.00000 0.03
5 24-Feb-99 0 9.027239 0.00000 0.02
6 30-Sep-99 0 10.000000 0.00000 0.01
7 N/A 0 N/A 0.00000 0
8 N/A 0 N/A 0.00000 0
9 N/A 0 N/A 0.00000 0
10 N/A 0 N/A 0.00000 0
11 N/A 0 N/A 0.00000 0
12 N/A 0 N/A 0.00000 0
13 N/A 0 N/A 0.00000 0
14 FEE N/A 0 N/A 0.00000 0
15 FEE N/A 0 N/A 0.00000 0
RESULTING VALUE 30-Sep-99 10.000000 189.84035 1898.4035
5.596
FORMULA: 1000*(1+T)= 1898.4035
= 1898.4035
T = 12.14%
R = 89.84%
NLIC VAII CAPITAL APPRECIATION
21-Jan-97
TO NO. YEARS 2.689
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 21-Jan-97 1000.00 10.000000 100.00000
1 FEE 21-Jan-98 0 10.951230 0.00000 0.06
2 FEE 21-Jan-99 0 10.562537 0.00000 0.05
3 FEE 30-Sep-99 0 10.871412 0.00000 0.04
4 N/A 0 N/A 0.00000 0.03
5 N/A 0 N/A 0.00000 0.02
6 N/A 0 N/A 0.00000 0.01
7 N/A 0 N/A 0.00000 0
8 N/A 0 N/A 0.00000 0
9 N/A 0 N/A 0.00000 0
10 N/A 0 N/A 0.00000 0
11 N/A 0 N/A 0.00000 0
12 N/A 0 N/A 0.00000 0
13 N/A 0 N/A 0.00000 0
14 FEE N/A 0 N/A 0.00000 0
15 FEE N/A 0 N/A 0.00000 0
RESULTING VALUE 30-Sep-99 10.871412 100.00000 1087.1412
2.689
FORMULA: 1000*(1+T)= 1087.1412
= 1087.1412
T = 3.16%
R = 8.71%
NLIC VAII INCOME BUILDER
21-Jan-97
TO NO. YEARS 2.689
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 21-Jan-97 1000.00 7.964898 125.55089
1 FEE 21-Jan-98 0 9.663302 0.00000 0.06
2 FEE 21-Jan-99 0 10.016422 0.00000 0.05
3 FEE 30-Sep-99 0 10.000000 0.00000 0.04
4 N/A 0 N/A 0.00000 0.03
5 N/A 0 N/A 0.00000 0.02
6 N/A 0 N/A 0.00000 0.01
7 N/A 0 N/A 0.00000 0
8 N/A 0 N/A 0.00000 0
9 N/A 0 N/A 0.00000 0
10 N/A 0 N/A 0.00000 0
11 N/A 0 N/A 0.00000 0
12 N/A 0 N/A 0.00000 0
13 N/A 0 N/A 0.00000 0
14 FEE N/A 0 N/A 0.00000 0
15 FEE N/A 0 N/A 0.00000 0
RESULTING VALUE 30-Sep-99 10.000000 125.55089 1255.5089
2.689
FORMULA: 1000*(1+T)= 1255.5089
= 1255.5089
T = 8.83%
R = 25.55%
NLIC VAII EQUITY GROWTH
02-Jan-97
TO NO. YEARS 2.741
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 02-Jan-97 1000.00 5.610560 178.23534
1 FEE 02-Jan-98 0 7.395460 0.00000 0.06
2 FEE 02-Jan-99 0 8.740707 0.00000 0.05
3 FEE 30-Sep-99 0 10.000000 0.00000 0.04
4 N/A 0 N/A 0.00000 0.03
5 N/A 0 N/A 0.00000 0.02
6 N/A 0 N/A 0.00000 0.01
7 N/A 0 N/A 0.00000 0
8 N/A 0 N/A 0.00000 0
9 N/A 0 N/A 0.00000 0
10 N/A 0 N/A 0.00000 0
11 N/A 0 N/A 0.00000 0
12 N/A 0 N/A 0.00000 0
13 N/A 0 N/A 0.00000 0
14 FEE N/A 0 N/A 0.00000 0
15 FEE N/A 0 N/A 0.00000 0
RESULTING VALUE 30-Sep-99 10.000000 178.23534 1782.3534
2.741
FORMULA: 1000*(1+T)= 1782.3534
= 1782.3534
T = 23.48%
R = 78.24%
NLIC VAII INTERNATIONAL MAGNUM
02-Jan-97
TO NO. YEARS 2.741
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 02-Jan-97 1000.00 7.835468 127.62480
1 FEE 02-Jan-98 0 8.382012 0.00000 0.06
2 FEE 02-Jan-99 0 9.130881 0.00000 0.05
3 FEE 30-Sep-99 0 10.000000 0.00000 0.04
4 N/A 0 N/A 0.00000 0.03
5 N/A 0 N/A 0.00000 0.02
6 N/A 0 N/A 0.00000 0.01
7 N/A 0 N/A 0.00000 0
8 N/A 0 N/A 0.00000 0
9 N/A 0 N/A 0.00000 0
10 N/A 0 N/A 0.00000 0
11 N/A 0 N/A 0.00000 0
12 N/A 0 N/A 0.00000 0
13 N/A 0 N/A 0.00000 0
14 FEE N/A 0 N/A 0.00000 0
15 FEE N/A 0 N/A 0.00000 0
RESULTING VALUE 30-Sep-99 10.000000 127.62480 1276.2480
2.741
FORMULA: 1000*(1+T)= 1276.2480
= 1276.2480
T = 9.31%
R = 27.62%
NLIC VAII EMERGING MARKETS
01-Oct-96
TO NO. YEARS 2.995
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 01-Oct-96 1000.00 10.593313 94.39917
1 FEE 01-Oct-97 0 12.707572 0.00000 0.06
2 FEE 01-Oct-98 0 6.512525 0.00000 0.05
3 FEE 30-Sep-99 0 10.000000 0.00000 0.04
4 N/A 0 N/A 0.00000 0.03
5 N/A 0 N/A 0.00000 0.02
6 N/A 0 N/A 0.00000 0.01
7 N/A 0 N/A 0.00000 0
8 N/A 0 N/A 0.00000 0
9 N/A 0 N/A 0.00000 0
10 N/A 0 N/A 0.00000 0
11 N/A 0 N/A 0.00000 0
12 N/A 0 N/A 0.00000 0
13 N/A 0 N/A 0.00000 0
14 FEE N/A 0 N/A 0.00000 0
15 FEE N/A 0 N/A 0.00000 0
RESULTING VALUE 30-Sep-99 10.000000 94.39917 943.9917
2.995
FORMULA: 1000*(1+T)= 943.9917
= 943.9917
T = -1.91%
R = -5.60%
NLIC VAII EMERGING GROWTH
03-Jul-95
TO NO. YEARS 4.244
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 03-Jul-95 1000.00 3.576778 279.58121
1 FEE 03-Jul-96 0 4.876647 0.00000 0.06
2 FEE 03-Jul-97 0 5.364656 0.00000 0.05
3 FEE 03-Jul-98 0 7.074200 0.00000 0.04
4 03-Jul-99 0 9.839828 0.00000 0.03
5 30-Sep-99 0 10.000000 0.00000 0.02
6 N/A 0 N/A 0.00000 0.01
7 N/A 0 N/A 0.00000 0
8 N/A 0 N/A 0.00000 0
9 N/A 0 N/A 0.00000 0
10 N/A 0 N/A 0.00000 0
11 N/A 0 N/A 0.00000 0
12 N/A 0 N/A 0.00000 0
13 N/A 0 N/A 0.00000 0
14 FEE N/A 0 N/A 0.00000 0
15 FEE N/A 0 N/A 0.00000 0
RESULTING VALUE 30-Sep-99 10.000000 279.58121 2795.8121
4.244
FORMULA: 1000*(1+T)= 2795.8121
= 2795.8121
T = 27.41%
R = 179.58%
NLIC VAII REAL ESTATE
04-Mar-97
TO NO. YEARS 2.574
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 04-Mar-97 1000.00 9.960540 100.39617
1 FEE 04-Mar-98 0 11.424532 0.00000 0.06
2 FEE 04-Mar-99 0 9.738898 0.00000 0.05
3 FEE 30-Sep-99 0 10.000000 0.00000 0.04
4 N/A 0 N/A 0.00000 0.03
5 N/A 0 N/A 0.00000 0.02
6 N/A 0 N/A 0.00000 0.01
7 N/A 0 N/A 0.00000 0
8 N/A 0 N/A 0.00000 0
9 N/A 0 N/A 0.00000 0
10 N/A 0 N/A 0.00000 0
11 N/A 0 N/A 0.00000 0
12 N/A 0 N/A 0.00000 0
13 N/A 0 N/A 0.00000 0
14 FEE N/A 0 N/A 0.00000 0
15 FEE N/A 0 N/A 0.00000 0
RESULTING VALUE 30-Sep-99 10.000000 100.39617 1003.9617
2.574
FORMULA: 1000*(1+T)= 1003.9617
= 1003.9617
T = 0.15%
R = 0.40%
NLIC VAII COMPETITIVE EDGE
18-May-98
TO NO. YEARS 1.369
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 18-May-98 1000.00 9.680053 103.30522
1 FEE 18-May-99 0 9.862510 0.00000 0.06
2 FEE 30-Sep-99 0 10.000000 0.00000 0.05
3 FEE N/A 0 N/A 0.00000 0.04
4 N/A 0 N/A 0.00000 0.03
5 N/A 0 N/A 0.00000 0.02
6 N/A 0 N/A 0.00000 0.01
7 N/A 0 N/A 0.00000 0
8 N/A 0 N/A 0.00000 0
9 N/A 0 N/A 0.00000 0
10 N/A 0 N/A 0.00000 0
11 N/A 0 N/A 0.00000 0
12 N/A 0 N/A 0.00000 0
13 N/A 0 N/A 0.00000 0
14 FEE N/A 0 N/A 0.00000 0
15 FEE N/A 0 N/A 0.00000 0
RESULTING VALUE 30-Sep-99 10.000000 103.30522 1033.0522
1.369
FORMULA: 1000*(1+T)= 1033.0522
= 1033.0522
T = 2.40%
R = 3.31%
NLIC VAII S&P 500 INDEX
18-May-98
TO NO. YEARS 1.369
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 18-May-98 1000.00 8.621927 115.98335
1 FEE 18-May-99 0 10.445478 0.00000 0.06
2 FEE 30-Sep-99 0 10.000000 0.00000 0.05
3 FEE N/A 0 N/A 0.00000 0.04
4 N/A 0 N/A 0.00000 0.03
5 N/A 0 N/A 0.00000 0.02
6 N/A 0 N/A 0.00000 0.01
7 N/A 0 N/A 0.00000 0
8 N/A 0 N/A 0.00000 0
9 N/A 0 N/A 0.00000 0
10 N/A 0 N/A 0.00000 0
11 N/A 0 N/A 0.00000 0
12 N/A 0 N/A 0.00000 0
13 N/A 0 N/A 0.00000 0
14 FEE N/A 0 N/A 0.00000 0
15 FEE N/A 0 N/A 0.00000 0
RESULTING VALUE 30-Sep-99 10.000000 115.98335 1159.8335
1.369
FORMULA: 1000*(1+T)= 1159.8335
= 1159.8335
T = 11.44%
R = 15.98%
NLIC VAII AGGRESSIVE EQUITY
02-May-99
TO NO. YEARS 0.413
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 02-May-99 1000.00 9.674196 103.36776
1 FEE 30-Sep-99 0 10.000000 0.00000 0.06
2 FEE N/A 0 N/A 0.00000 0.05
3 FEE N/A 0 N/A 0.00000 0.04
4 N/A 0 N/A 0.00000 0.03
5 N/A 0 N/A 0.00000 0.02
6 N/A 0 N/A 0.00000 0.01
7 N/A 0 N/A 0.00000 0
8 N/A 0 N/A 0.00000 0
9 N/A 0 N/A 0.00000 0
10 N/A 0 N/A 0.00000 0
11 N/A 0 N/A 0.00000 0
12 N/A 0 N/A 0.00000 0
13 N/A 0 N/A 0.00000 0
14 FEE N/A 0 N/A 0.00000 0
15 FEE N/A 0 N/A 0.00000 0
RESULTING VALUE 30-Sep-99 10.000000 103.36776 1033.6776
0.413
FORMULA: 1000*(1+T)= 1033.6776
= 1033.6776
T = 8.34%
R = 3.37%
NLIC VAII SHORT TERM BOND
02-May-99
TO NO. YEARS 0.413
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 02-May-99 1000.00 9.936688 100.63715
1 FEE 30-Sep-99 0 10.000000 0.00000 0.06
2 FEE N/A 0 N/A 0.00000 0.05
3 FEE N/A 0 N/A 0.00000 0.04
4 N/A 0 N/A 0.00000 0.03
5 N/A 0 N/A 0.00000 0.02
6 N/A 0 N/A 0.00000 0.01
7 N/A 0 N/A 0.00000 0
8 N/A 0 N/A 0.00000 0
9 N/A 0 N/A 0.00000 0
10 N/A 0 N/A 0.00000 0
11 N/A 0 N/A 0.00000 0
12 N/A 0 N/A 0.00000 0
13 N/A 0 N/A 0.00000 0
14 FEE N/A 0 N/A 0.00000 0
15 FEE N/A 0 N/A 0.00000 0
RESULTING VALUE 30-Sep-99 10.000000 100.63715 1006.3715
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
Inception Inception Ten Years Five Years
Fund Date Total Average Total Average Total Average
Money Market 03/09/84 113.22% 4.98% 52.44% 4.31% 24.28% 4.44%
High Yield 03/09/84 203.10% 7.38% 85.56% 6.38% 27.98% 5.06%
Equity 03/09/84 897.18% 15.92% 437.60% 18.32% 216.45% 25.91%
Quality Income 03/01/87 141.95% 7.27% 103.78% 7.38% 42.43% 7.33%
Managed Assets 03/01/87 257.59% 10.65% 195.28% 11.44% 87.89% 13.44%
Dividend Growth 03/01/90 211.80% 12.59% N/A N/A 123.29% 17.43%
Utilities 03/01/90 212.23% 12.61% N/A N/A 113.63% 16.39%
European Growth 03/01/91 268.01% 16.38% N/A N/A 135.79% 18.71%
Capital Growth 03/01/91 160.32% 11.78% N/A N/A 122.23% 17.32%
Pacific Growth 02/24/94 -24.81% -4.96% N/A N/A -26.06% -5.86%
Global Div Growth 02/24/94 89.84% 12.13% N/A N/A 86.45% 13.27%
Capital Appreciation 01/21/97 8.71% 3.15% N/A N/A N/A N/A
Income Builder 01/21/97 25.55% 8.83% N/A N/A N/A N/A
Equity Growth 01/02/97 78.24% 23.46% N/A N/A N/A N/A
International Magnum 01/02/97 27.62% 9.30% N/A N/A N/A N/A
Emerging Markets 10/01/96 -5.60% -1.90% N/A N/A N/A N/A
Emerging Growth 07/03/95 179.58% 27.39% N/A N/A N/A N/A
Real Estate 03/04/97 0.40% 0.15% N/A N/A N/A N/A
Competitive Edge 05/18/98 3.31% 2.40% N/A N/A N/A N/A
S&P 500 Index 05/18/98 15.98% 11.43% N/A N/A N/A N/A
Aggressive Equity 05/02/99 3.37% 8.34% N/A N/A N/A N/A
Short Term Bond 05/02/99 0.64% 1.55% N/A N/A N/A N/A
Three Years Two Years One Year YTD Three Months
Fund Total Average Total Average
Money Market 13.55% 4.33% 8.71% 4.26% 4.00% 2.91% 1.00%
High Yield 3.71% 1.22% -7.69% -3.92% -2.92% -2.33% -5.92%
Equity 107.84% 27.62% 48.35% 21.80% 35.05% 13.81% -2.49%
Quality Income 17.71% 5.58% 6.71% 3.30% -4.27% -4.25% 0.13%
Managed Assets 58.37% 16.56% 30.72% 14.33% 24.34% 5.92% -2.05%
Dividend Growth 48.04% 13.97% 10.14% 4.95% 9.52% -3.00% -11.16%
Utilities 67.79% 18.83% 39.55% 18.13% 11.94% 1.04% -4.77%
European Growth 60.61% 17.11% 23.82% 11.27% 19.33% 2.60% 0.42%
Capital Growth 52.35% 15.07% 14.90% 7.19% 24.93% 3.88% -3.04%
Pacific Growth -24.82% -9.07% -12.51% -6.47% 70.53% 36.00% 4.62%
Global Div Growth 42.90% 12.64% 15.11% 7.29% 26.59% 8.26% -1.48%
Capital AppreciationN/A N/A -12.07% -6.23% 15.80% 7.11% 0.00%
Income Builder N/A N/A 6.15% 3.03% 10.48% 0.75% -7.24%
Equity Growth N/A N/A 39.53% 18.12% 39.33% 13.87% -0.95%
International MagnumN/A N/A 10.50% 5.12% 21.84% 11.08% 5.19%
Emerging Markets N/A N/A -21.11% -11.18% 47.40% 29.59% -5.85%
Emerging Growth 98.89% 25.76% 62.75% 27.58% 61.80% 26.61% 4.17%
Real Estate N/A N/A -12.95% -6.70% -0.97% -1.00% -8.41%
Competitive Edge N/A N/A N/A N/A 24.94% 5.77% -0.08%
S&P 500 Index N/A N/A N/A N/A 25.71% 3.82% -6.49%
Aggressive Equity N/A N/A N/A N/A N/A 0.00% 1.19%
Short Term Bond N/A N/A N/A N/A N/A 0.00% 1.02%
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
NLIC VAII MONEY MARKET
30-Sep-98 NO. YEARS 1.000
TO
30-Sep-99
<S> <C> <C> <C> <C> <C> <C>
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-98 1000.00 9.628101 103.86264
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 103.86264 1038.6264
1.000
FORMULA: 1000*(1+T)= 1038.6264
= 1038.6264
T = 3.86%
R = 3.86%
NLIC VAII HIGH YIELD
9/30/98 NO. YEARS 1.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-98 1000.00 10.314450 96.95137
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 96.95137 969.5137
1.000
FORMULA: 1000*(1+T)= 969.5137
= 969.5137
T = -3.05%
R = -3.05%
NLIC VAII EQUITY
9/30/98 NO. YEARS 1.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-98 1000.00 7.414085 134.87841
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 134.87841 1348.7841
1.000
FORMULA: 1000*(1+T)= 1348.7841
= 1348.7841
T = 34.88%
R = 34.88%
NLIC VAII QUALITY INCOME
9/30/98 NO. YEARS 1.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-98 1000.00 10.460013 95.60217
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 95.60217 956.0217
1.000
FORMULA: 1000*(1+T)= 956.0217
= 956.0217
T = -4.40%
R = -4.40%
NLIC VAII STRATEGIST
9/30/98 NO. YEARS 1.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-98 1000.00 8.053005 124.17724
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 124.17724 1241.7724
1.000
FORMULA: 1000*(1+T)= 1241.7724
= 1241.7724
T = 24.18%
R = 24.18%
NLIC VAII DIVIDEND GROWTH
9/30/98 NO. YEARS 1.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-98 1000.00 9.142857 109.37500
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 109.37500 1093.7500
1.000
FORMULA: 1000*(1+T)= 1093.7500
= 1093.7500
T = 9.38%
R = 9.38%
NLIC VAII UTILITIES
9/30/98 NO. YEARS 1.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-98 1000.00 8.944893 111.79563
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 111.79563 1117.9563
1.000
FORMULA: 1000*(1+T)= 1117.9563
= 1117.9563
T = 11.80%
R = 11.80%
NLIC VAII EUROPEAN GROWTH
9/30/98 NO. YEARS 1.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-98 1000.00 8.391309 119.17092
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 119.17092 1191.7092
1.000
FORMULA: 1000*(1+T)= 1191.7092
= 1191.7092
T = 19.17%
R = 19.17%
NLIC VAII CAPITAL GROWTH
9/30/98 NO. YEARS 1.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-98 1000.00 8.015168 124.76346
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 124.76346 1247.6346
1.000
FORMULA: 1000*(1+T)= 1247.6346
= 1247.6346
T = 24.76%
R = 24.76%
NLIC VAII PACIFIC GROWTH
9/30/98 NO. YEARS 1.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-98 1000.00 5.871643 170.31009
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 170.31009 1703.1009
1.000
FORMULA: 1000*(1+T)= 1703.1009
= 1703.1009
T = 70.31%
R = 70.31%
NLIC VAII GLOBAL DIVIDEND GROWTH
9/30/98 NO. YEARS 1.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-98 1000.00 7.909579 126.42899
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 126.42899 1264.2899
1.000
FORMULA: 1000*(1+T)= 1264.2899
= 1264.2899
T = 26.43%
R = 26.43%
NLIC VAII CAPITAL APPRECIATION
9/30/98 NO. YEARS 1.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-98 1000.00 9.387763 106.52165
FEE 30-Sep-99 0 10.871412 0.00000
RESULTING VALUE 30-Sep-99 10.871412 106.52165 1158.0407
1.000
FORMULA: 1000*(1+T)= 1158.0407
= 1158.0407
T = 15.80%
R = 15.80%
NLIC VAII INCOME BUILDER
9/30/98 NO. YEARS 1.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-98 1000.00 9.063059 110.33802
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 110.33802 1103.3802
1.000
FORMULA: 1000*(1+T)= 1103.3802
= 1103.3802
T = 10.34%
R = 10.34%
NLIC VAII EQUITY GROWTH
9/30/98 NO. YEARS 1.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-98 1000.00 7.186779 139.14439
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 139.14439 1391.4439
1.000
FORMULA: 1000*(1+T)= 1391.4439
= 1391.4439
T = 39.14%
R = 39.14%
NLIC VAII INTERNATIONAL MAGNUM
9/30/98 NO. YEARS 1.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-98 1000.00 8.218199 121.68116
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 121.68116 1216.8116
1.000
FORMULA: 1000*(1+T)= 1216.8116
= 1216.8116
T = 21.68%
R = 21.68%
NLIC VAII EMERGING MARKETS
9/30/98 NO. YEARS 1.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-98 1000.00 6.793275 147.20440
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 147.20440 1472.0440
1.000
FORMULA: 1000*(1+T)= 1472.0440
= 1472.0440
T = 47.20%
R = 47.20%
NLIC VAII EMERGING GROWTH
9/30/98 NO. YEARS 1.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-98 1000.00 6.188580 161.58795
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 161.58795 1615.8795
1.000
FORMULA: 1000*(1+T)= 1615.8795
= 1615.8795
T = 61.59%
R = 61.59%
NLIC VAII REAL ESTATE
9/30/98 NO. YEARS 1.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-98 1000.00 10.111433 98.89795
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 98.89795 988.9795
1.000
FORMULA: 1000*(1+T)= 988.9795
= 988.9795
T = -1.10%
R = -1.10%
NLIC VAII COMPETITIVE EDGE
9/30/98 NO. YEARS 1.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-98 1000.00 8.014384 124.77565
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 124.77565 1247.7565
1.000
FORMULA: 1000*(1+T)= 1247.7565
= 1247.7565
T = 24.78%
R = 24.78%
NLIC VAII S&P 500 INDEX
9/30/98 NO. YEARS 1.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-98 1000.00 7.964990 125.54943
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 125.54943 1255.4943
1.000
FORMULA: 1000*(1+T)= 1255.4943
= 1255.4943
T = 25.55%
R = 25.55%
NLIC VAII AGGRESSIVE EQUITY
9/30/98 NO. YEARS 1.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-98 1000.00 #VALUE! #VALUE!
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 #VALUE! #VALUE!
1.000
FORMULA: 1000*(1+T)= #VALUE!
= #VALUE!
T = N/A
R = N/A
NLIC VAII SHORT TERM BOND
9/30/98 NO. YEARS 1.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-98 1000.00 #VALUE! #VALUE!
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 #VALUE! #VALUE!
1.000
FORMULA: 1000*(1+T)= #VALUE!
= #VALUE!
T = N/A
R = N/A
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
NLIC VAII MONEY MARKET
30-Sep-97 NO. YEARS 2.000
TO
30-Sep-99
<S> <C> <C> <C> <C> <C> <C>
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-97 1000.00 9.222600 108.42929
FEE 30-Sep-98 0 9.628101 0.00000
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 108.42929 1084.2929
2.000
FORMULA: 1000*(1+T)= 1084.2929
= 1084.2929
T = 4.13%
R = 8.43%
NLIC VAII HIGH YIELD
9/30/97 NO. YEARS 2.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-97 1000.00 10.860721 92.07492
FEE 30-Sep-98 0 10.314450 0.00000
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 92.07492 920.7492
2.000
FORMULA: 1000*(1+T)= 920.7492
= 920.7492
T = -4.04%
R = -7.93%
NLIC VAII EQUITY
9/30/97 NO. YEARS 2.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-97 1000.00 6.758225 147.96785
FEE 30-Sep-98 0 7.414085 0.00000
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 147.96785 1479.6785
2.000
FORMULA: 1000*(1+T)= 1479.6785
= 1479.6785
T = 21.64%
R = 47.97%
NLIC VAII QUALITY INCOME
9/30/97 NO. YEARS 2.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-97 1000.00 9.395187 106.43747
FEE 30-Sep-98 0 10.460013 0.00000
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 106.43747 1064.3747
2.000
FORMULA: 1000*(1+T)= 1064.3747
= 1064.3747
T = 3.17%
R = 6.44%
NLIC VAII STRATEGIST
9/30/97 NO. YEARS 2.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-97 1000.00 7.669969 130.37863
FEE 30-Sep-98 0 8.053005 0.00000
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 130.37863 1303.7863
2.000
FORMULA: 1000*(1+T)= 1303.7863
= 1303.7863
T = 14.18%
R = 30.38%
NLIC VAII DIVIDEND GROWTH
9/30/97 NO. YEARS 2.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-97 1000.00 9.103306 109.85020
FEE 30-Sep-98 0 9.142857 0.00000
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 109.85020 1098.5020
2.000
FORMULA: 1000*(1+T)= 1098.5020
= 1098.5020
T = 4.81%
R = 9.85%
NLIC VAII UTILITIES
9/30/97 NO. YEARS 2.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-97 1000.00 7.184430 139.18988
FEE 30-Sep-98 0 8.944893 0.00000
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 139.18988 1391.8988
2.000
FORMULA: 1000*(1+T)= 1391.8988
= 1391.8988
T = 17.98%
R = 39.19%
NLIC VAII EUROPEAN GROWTH
9/30/97 NO. YEARS 2.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-97 1000.00 8.097245 123.49879
FEE 30-Sep-98 0 8.391309 0.00000
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 123.49879 1234.9879
2.000
FORMULA: 1000*(1+T)= 1234.9879
= 1234.9879
T = 11.13%
R = 23.50%
NLIC VAII CAPITAL GROWTH
9/30/97 NO. YEARS 2.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-97 1000.00 8.726139 114.59823
FEE 30-Sep-98 0 8.015168 0.00000
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 114.59823 1145.9823
2.000
FORMULA: 1000*(1+T)= 1145.9823
= 1145.9823
T = 7.05%
R = 14.60%
NLIC VAII PACIFIC GROWTH
9/30/97 NO. YEARS 2.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-97 1000.00 11.459949 87.26042
FEE 30-Sep-98 0 5.871643 0.00000
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 87.26042 872.6042
2.000
FORMULA: 1000*(1+T)= 872.6042
= 872.6042
T = -6.59%
R = -12.74%
NLIC VAII GLOBAL DIVIDEND GROWTH
9/30/97 NO. YEARS 2.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-97 1000.00 8.710001 114.81055
FEE 30-Sep-98 0 7.909579 0.00000
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 114.81055 1148.1055
2.000
FORMULA: 1000*(1+T)= 1148.1055
= 1148.1055
T = 7.15%
R = 14.81%
NLIC VAII CAPITAL APPRECIATION
9/30/97 NO. YEARS 2.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-97 1000.00 12.364355 80.87765
FEE 30-Sep-98 0 9.387763 0.00000
FEE 30-Sep-99 0 10.871412 0.00000
RESULTING VALUE 30-Sep-99 10.871412 80.87765 879.2543
2.000
FORMULA: 1000*(1+T)= 879.2543
= 879.2543
T = -6.23%
R = -12.07%
NLIC VAII INCOME BUILDER
9/30/97 NO. YEARS 2.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-97 1000.00 9.445322 105.87252
FEE 30-Sep-98 0 9.063059 0.00000
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 105.87252 1058.7252
2.000
FORMULA: 1000*(1+T)= 1058.7252
= 1058.7252
T = 2.89%
R = 5.87%
NLIC VAII EQUITY GROWTH
9/30/97 NO. YEARS 2.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-97 1000.00 7.185319 139.17267
FEE 30-Sep-98 0 7.186779 0.00000
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 139.17267 1391.7267
2.000
FORMULA: 1000*(1+T)= 1391.7267
= 1391.7267
T = 17.97%
R = 39.17%
NLIC VAII INTERNATIONAL MAGNUM
9/30/97 NO. YEARS 2.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-97 1000.00 9.073391 110.21237
FEE 30-Sep-98 0 8.218199 0.00000
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 110.21237 1102.1237
2.000
FORMULA: 1000*(1+T)= 1102.1237
= 1102.1237
T = 4.98%
R = 10.21%
NLIC VAII EMERGING MARKETS
9/30/97 NO. YEARS 2.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-97 1000.00 12.709264 78.68276
FEE 30-Sep-98 0 6.793275 0.00000
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 78.68276 786.8276
2.000
FORMULA: 1000*(1+T)= 786.8276
= 786.8276
T = -11.30%
R = -21.32%
NLIC VAII EMERGING GROWTH
9/30/97 NO. YEARS 2.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-97 1000.00 6.160225 162.33174
FEE 30-Sep-98 0 6.188580 0.00000
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 162.33174 1623.3174
2.000
FORMULA: 1000*(1+T)= 1623.3174
= 1623.3174
T = 27.41%
R = 62.33%
NLIC VAII REAL ESTATE
9/30/97 NO. YEARS 2.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-97 1000.00 11.517900 86.82138
FEE 30-Sep-98 0 10.111433 0.00000
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 86.82138 868.2138
2.000
FORMULA: 1000*(1+T)= 868.2138
= 868.2138
T = -6.82%
R = -13.18%
NLIC VAII COMPETITIVE EDGE
9/30/97 NO. YEARS 2.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-97 1000.00 #N/A #N/A
FEE 30-Sep-98 0 8.014384 0.00000
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 #N/A #N/A
2.000
FORMULA: 1000*(1+T)= #N/A
= #N/A
T = #N/A
R = #N/A
NLIC VAII S&P 500 INDEX
9/30/97 NO. YEARS 2.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-97 1000.00 #N/A #N/A
FEE 30-Sep-98 0 7.964990 0.00000
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 #N/A #N/A
2.000
FORMULA: 1000*(1+T)= #N/A
= #N/A
T = #N/A
R = #N/A
NLIC VAII AGGRESSIVE EQUITY
9/30/97 NO. YEARS 2.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-97 1000.00 #N/A #N/A
FEE 30-Sep-98 0 #N/A #N/A
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 #N/A #N/A
2.000
FORMULA: 1000*(1+T)= #N/A
= #N/A
T = #N/A
R = #N/A
NLIC VAII SHORT TERM BOND
9/30/97 NO. YEARS 2.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-97 1000.00 #N/A #N/A
FEE 30-Sep-98 0 #N/A #N/A
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 #N/A #N/A
2.000
FORMULA: 1000*(1+T)= #N/A
= #N/A
T = #N/A
R = #N/A
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
NLIC VAII MONEY MARKET
30-Sep-96 NO. YEARS 3.000
TO
30-Sep-99
<S> <C> <C> <C> <C> <C> <C>
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-96 1000.00 8.841478 113.10326
FEE 30-Sep-97 0 9.222600 0.00000
FEE 30-Sep-98 0 9.628101 0.00000
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 113.10326 1131.0326
3.000
FORMULA: 1000*(1+T)= 1131.0326
= 1131.0326
T = 4.19%
R = 13.10%
NLIC VAII HIGH YIELD
9/30/96 NO. YEARS 3.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-96 1000.00 9.679939 103.30644
FEE 30-Sep-97 0 10.860721 0.00000
FEE 30-Sep-98 0 10.314450 0.00000
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 103.30644 1033.0644
3.000
FORMULA: 1000*(1+T)= 1033.0644
= 1033.0644
T = 1.09%
R = 3.31%
NLIC VAII EQUITY
9/30/96 NO. YEARS 3.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-96 1000.00 4.830273 207.02764
FEE 30-Sep-97 0 6.758225 0.00000
FEE 30-Sep-98 0 7.414085 0.00000
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 207.02764 2070.2764
3.000
FORMULA: 1000*(1+T)= 2070.2764
= 2070.2764
T = 27.45%
R = 107.03%
NLIC VAII QUALITY INCOME
9/30/96 NO. YEARS 3.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-96 1000.00 8.528783 117.25002
FEE 30-Sep-97 0 9.395187 0.00000
FEE 30-Sep-98 0 10.460013 0.00000
30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 117.25002 1172.5002
3.000
FORMULA: 1000*(1+T)= 1172.5002
= 1172.5002
T = 5.45%
R = 17.25%
NLIC VAII STRATEGIST
9/30/96 NO. YEARS 3.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-96 1000.00 6.338904 157.75598
FEE 30-Sep-97 0 7.669969 0.00000
FEE 30-Sep-98 0 8.053005 0.00000
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 157.75598 1577.5598
3.000
FORMULA: 1000*(1+T)= 1577.5598
= 1577.5598
T = 16.41%
R = 57.76%
NLIC VAII DIVIDEND GROWTH
9/30/96 NO. YEARS 3.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-96 1000.00 6.781327 147.46377
FEE 30-Sep-97 0 9.103306 0.00000
FEE 30-Sep-98 0 9.142857 0.00000
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 147.46377 1474.6377
3.000
FORMULA: 1000*(1+T)= 1474.6377
= 1474.6377
T = 13.82%
R = 47.46%
NLIC VAII UTILITIES
9/30/96 NO. YEARS 3.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-96 1000.00 5.982923 167.14239
FEE 30-Sep-97 0 7.184430 0.00000
FEE 30-Sep-98 0 8.944893 0.00000
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 167.14239 1671.4239
3.000
FORMULA: 1000*(1+T)= 1671.4239
= 1671.4239
T = 18.68%
R = 67.14%
NLIC VAII EUROPEAN GROWTH
9/30/96 NO. YEARS 3.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-96 1000.00 6.250487 159.98754
FEE 30-Sep-97 0 8.097245 0.00000
FEE 30-Sep-98 0 8.391309 0.00000
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 159.98754 1599.8754
3.000
FORMULA: 1000*(1+T)= 1599.8754
= 1599.8754
T = 16.96%
R = 59.99%
NLIC VAII CAPITAL GROWTH
9/30/96 NO. YEARS 3.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-96 1000.00 6.589410 151.75865
FEE 30-Sep-97 0 8.726139 0.00000
FEE 30-Sep-98 0 8.015168 0.00000
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 151.75865 1517.5865
3.000
FORMULA: 1000*(1+T)= 1517.5865
= 1517.5865
T = 14.92%
R = 51.76%
NLIC VAII PACIFIC GROWTH
9/30/96 NO. YEARS 3.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-96 1000.00 13.352522 74.89222
FEE 30-Sep-97 0 11.459949 0.00000
FEE 30-Sep-98 0 5.871643 0.00000
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 74.89222 748.9222
3.000
FORMULA: 1000*(1+T)= 748.9222
= 748.9222
T = -9.19%
R = -25.11%
NLIC VAII GLOBAL DIVIDEND GROWTH
9/30/96 NO. YEARS 3.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-96 1000.00 7.025218 142.34434
FEE 30-Sep-97 0 8.710001 0.00000
FEE 30-Sep-98 0 7.909579 0.00000
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 142.34434 1423.4434
3.000
FORMULA: 1000*(1+T)= 1423.4434
= 1423.4434
T = 12.49%
R = 42.34%
NLIC VAII CAPITAL APPRECIATION
9/30/96 NO. YEARS 3.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-96 1000.00 #N/A #N/A
FEE 30-Sep-97 0 12.364355 0.00000
FEE 30-Sep-98 0 9.387763 0.00000
FEE 30-Sep-99 0 10.871412 0.00000
RESULTING VALUE 30-Sep-99 10.871412 #N/A #N/A
3.000
FORMULA: 1000*(1+T)= #N/A
= #N/A
T = #N/A
R = #N/A
NLIC VAII INCOME BUILDER
9/30/96 NO. YEARS 3.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-96 1000.00 #N/A #N/A
FEE 30-Sep-97 0 9.445322 0.00000
FEE 30-Sep-98 0 9.063059 0.00000
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 #N/A #N/A
3.000
FORMULA: 1000*(1+T)= #N/A
= #N/A
T = #N/A
R = #N/A
NLIC VAII EQUITY GROWTH
9/30/96 NO. YEARS 3.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-96 1000.00 #N/A #N/A
FEE 30-Sep-97 0 7.185319 0.00000
FEE 30-Sep-98 0 7.186779 0.00000
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 #N/A #N/A
3.000
FORMULA: 1000*(1+T)= #N/A
= #N/A
T = #N/A
R = #N/A
NLIC VAII INTERNATIONAL MAGNUM
9/30/96 NO. YEARS 3.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-96 1000.00 #N/A #N/A
FEE 30-Sep-97 0 9.073391 0.00000
FEE 30-Sep-98 0 8.218199 0.00000
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 #N/A #N/A
3.000
FORMULA: 1000*(1+T)= #N/A
= #N/A
T = #N/A
R = #N/A
NLIC VAII EMERGING MARKETS
9/30/96 NO. YEARS 3.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-96 1000.00 #N/A #N/A
FEE 30-Sep-97 0 12.709264 0.00000
FEE 30-Sep-98 0 6.793275 0.00000
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 #N/A #N/A
3.000
FORMULA: 1000*(1+T)= #N/A
= #N/A
T = #N/A
R = #N/A
NLIC VAII EMERGING GROWTH
9/30/96 NO. YEARS 3.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-96 1000.00 5.047517 198.11720
FEE 30-Sep-97 0 6.160225 0.00000
FEE 30-Sep-98 0 6.188580 0.00000
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 198.11720 1981.1720
3.000
FORMULA: 1000*(1+T)= 1981.1720
= 1981.1720
T = 25.60%
R = 98.12%
NLIC VAII REAL ESTATE
9/30/96 NO. YEARS 3.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-96 1000.00 #N/A #N/A
FEE 30-Sep-97 0 11.517900 0.00000
FEE 30-Sep-98 0 10.111433 0.00000
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 #N/A #N/A
3.000
FORMULA: 1000*(1+T)= #N/A
= #N/A
T = #N/A
R = #N/A
NLIC VAII COMPETITIVE EDGE
9/30/96 NO. YEARS 3.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-96 1000.00 #N/A #N/A
FEE 30-Sep-97 0 #N/A #N/A
FEE 30-Sep-98 0 8.014384 0.00000
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 #N/A #N/A
3.000
FORMULA: 1000*(1+T)= #N/A - (0.85 * 1000 * 0.03)
= #N/A
T = #N/A
R = #N/A
NLIC VAII S&P 500 INDEX
9/30/96 NO. YEARS 3.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-96 1000.00 #N/A #N/A
FEE 30-Sep-97 0 #N/A #N/A
FEE 30-Sep-98 0 7.964990 0.00000
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 #N/A #N/A
3.000
FORMULA: 1000*(1+T)= #N/A - (0.85 * 1000 * 0.03)
= #N/A
T = #N/A
R = #N/A
NLIC VAII AGGRESSIVE EQUITY
9/30/96 NO. YEARS 3.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-96 1000.00 #N/A #N/A
FEE 30-Sep-97 0 #N/A #N/A
FEE 30-Sep-98 0 #N/A #N/A
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 #N/A #N/A
3.000
FORMULA: 1000*(1+T)= #N/A - (0.85 * 1000 * 0.03)
= #N/A
T = #N/A
R = #N/A
NLIC VAII SHORT TERM BOND
9/30/96 NO. YEARS 3.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-96 1000.00 #N/A #N/A
FEE 30-Sep-97 0 #N/A #N/A
FEE 30-Sep-98 0 #N/A #N/A
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 #N/A #N/A
3.000
FORMULA: 1000*(1+T)= #N/A - (0.85 * 1000 * 0.03)
= #N/A
T = #N/A
R = #N/A
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
NLIC VAII MONEY MARKET
29-Sep-94
TO NO. YEARS 5.000
30-Sep-99
<S> <C> <C> <C> <C> <C> <C>
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-94 1000.00 8.098956 123.47270
FEE 30-Sep-95 0 8.477124 0.00000
FEE 30-Sep-96 0 8.841478 0.00000
FEE 30-Sep-97 0 9.222600 0.00000
FEE 30-Sep-98 0 9.628101 0.00000
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 123.47270 1234.7270
5.000
FORMULA: 1000*(1+T)= 1234.7270
= 1234.7270
T = 4.31%
R = 23.47%
NLIC VAII HIGH YIELD
29-Sep-94
TO NO. YEARS 5.000
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-94 1000.00 7.864961 127.14621
FEE 30-Sep-95 0 8.764765 0.00000
FEE 30-Sep-96 0 9.679939 0.00000
FEE 30-Sep-97 0 10.860721 0.00000
FEE 30-Sep-98 0 10.314450 0.00000
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 127.14621 1271.4621
5.000
FORMULA: 1000*(1+T)= 1271.4621
= 1271.4621
T = 4.92%
R = 27.15%
NLIC VAII EQUITY
29-Sep-94
TO NO. YEARS 5.000
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-94 1000.00 3.180596 314.40647
FEE 30-Sep-95 0 4.288225 0.00000
FEE 30-Sep-96 0 4.830273 0.00000
FEE 30-Sep-97 0 6.758225 0.00000
FEE 30-Sep-98 0 7.414085 0.00000
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 314.40647 3144.0647
5.000
FORMULA: 1000*(1+T)= 3144.0647
= 3144.0647
T = 25.75%
R = 214.41%
NLIC VAII QUALITY INCOME
29-Sep-94
TO NO. YEARS 5.000
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-94 1000.00 7.066738 141.50800
FEE 30-Sep-95 0 8.286588 0.00000
FEE 30-Sep-96 0 8.528783 0.00000
FEE 30-Sep-97 0 9.395187 0.00000
FEE 30-Sep-98 0 10.460013 0.00000
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 141.50800 1415.0800
5.000
FORMULA: 1000*(1+T)= 1415.0800
= 1415.0800
T = 7.19%
R = 41.51%
NLIC VAII STRATEGIST
29-Sep-94
TO NO. YEARS 5.000
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-94 1000.00 5.357027 186.67071
FEE 30-Sep-95 0 5.652493 0.00000
FEE 30-Sep-96 0 6.338904 0.00000
FEE 30-Sep-97 0 7.669969 0.00000
FEE 30-Sep-98 0 8.053005 0.00000
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 186.67071 1866.7071
5.000
FORMULA: 1000*(1+T)= 1866.7071
= 1866.7071
T = 13.30%
R = 86.67%
NLIC VAII DIVIDEND GROWTH
29-Sep-94
TO NO. YEARS 5.000
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-94 1000.00 4.507717 221.84178
FEE 30-Sep-95 0 5.585655 0.00000
FEE 30-Sep-96 0 6.781327 0.00000
FEE 30-Sep-97 0 9.103306 0.00000
FEE 30-Sep-98 0 9.142857 0.00000
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 221.84178 2218.4178
5.000
FORMULA: 1000*(1+T)= 2218.4178
= 2218.4178
T = 17.28%
R = 121.84%
NLIC VAII UTILITIES
29-Sep-94
TO NO. YEARS 5.000
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-94 1000.00 4.711485 212.24729
FEE 30-Sep-95 0 5.594975 0.00000
FEE 30-Sep-96 0 5.982923 0.00000
FEE 30-Sep-97 0 7.184430 0.00000
FEE 30-Sep-98 0 8.944893 0.00000
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 212.24729 2122.4729
5.000
FORMULA: 1000*(1+T)= 2122.4729
= 2122.4729
T = 16.24%
R = 112.25%
NLIC VAII EUROPEAN GROWTH
29-Sep-94
TO NO. YEARS 5.000
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-94 1000.00 4.268676 234.26468
FEE 30-Sep-95 0 5.247977 0.00000
FEE 30-Sep-96 0 6.250487 0.00000
FEE 30-Sep-97 0 8.097245 0.00000
FEE 30-Sep-98 0 8.391309 0.00000
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 234.26468 2342.6468
5.000
FORMULA: 1000*(1+T)= 2342.6468
= 2342.6468
T = 18.56%
R = 134.26%
NLIC VAII CAPITAL GROWTH
29-Sep-94
TO NO. YEARS 5.000
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-94 1000.00 4.529120 220.79345
FEE 30-Sep-95 0 5.451809 0.00000
FEE 30-Sep-96 0 6.589410 0.00000
FEE 30-Sep-97 0 8.726139 0.00000
FEE 30-Sep-98 0 8.015168 0.00000
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 220.79345 2207.9345
5.000
FORMULA: 1000*(1+T)= 2207.9345
= 2207.9345
T = 17.16%
R = 120.79%
NLIC VAII PACIFIC GROWTH
29-Sep-94
TO NO. YEARS 5.000
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-94 1000.00 13.612561 73.46156
FEE 30-Sep-95 0 12.958225 0.00000
FEE 30-Sep-96 0 13.352522 0.00000
FEE 30-Sep-97 0 11.459949 0.00000
FEE 30-Sep-98 0 5.871643 0.00000
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 73.46156 734.6156
5.000
FORMULA: 1000*(1+T)= 734.6156
= 734.6156
T = -5.98%
R = -26.54%
NLIC VAII GLOBAL DIVIDEND GROWTH
29-Sep-94
TO NO. YEARS 5.000
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-94 1000.00 5.398318 185.24288
FEE 30-Sep-95 0 6.097607 0.00000
FEE 30-Sep-96 0 7.025218 0.00000
FEE 30-Sep-97 0 8.710001 0.00000
FEE 30-Sep-98 0 7.909579 0.00000
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 185.24288 1852.4288
5.000
FORMULA: 1000*(1+T)= 1852.4288
= 1852.4288
T = 13.12%
R = 85.24%
NLIC VAII CAPITAL APPRECIATION
29-Sep-94
TO NO. YEARS 5.000
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-94 1000.00 #VALUE! #VALUE!
FEE 30-Sep-95 0 #VALUE! #VALUE!
FEE 30-Sep-96 0 #VALUE! #VALUE!
FEE 30-Sep-97 0 12.364355 0.00000
FEE 30-Sep-98 0 9.387763 0.00000
FEE 30-Sep-99 0 10.871412 0.00000
RESULTING VALUE 30-Sep-99 10.871412 #VALUE! #VALUE!
5.000
FORMULA: 1000*(1+T)= #VALUE!
= #VALUE!
T = N/A
R = N/A
NLIC VAII INCOME BUILDER
29-Sep-94
TO NO. YEARS 5.000
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-94 1000.00 #VALUE! #VALUE!
FEE 30-Sep-95 0 #VALUE! #VALUE!
FEE 30-Sep-96 0 #VALUE! #VALUE!
FEE 30-Sep-97 0 9.445322 0.00000
FEE 30-Sep-98 0 9.063059 0.00000
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 #VALUE! #VALUE!
5.000
FORMULA: 1000*(1+T)= #VALUE!
= #VALUE!
T = N/A
R = N/A
NLIC VAII EQUITY GROWTH
29-Sep-94
TO NO. YEARS 5.000
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-94 1000.00 #VALUE! #VALUE!
FEE 30-Sep-95 0 #VALUE! #VALUE!
FEE 30-Sep-96 0 #VALUE! #VALUE!
FEE 30-Sep-97 0 7.185319 0.00000
FEE 30-Sep-98 0 7.186779 0.00000
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 #VALUE! #VALUE!
5.000
FORMULA: 1000*(1+T)= #VALUE!
= #VALUE!
T = N/A
R = N/A
NLIC VAII INTERNATIONAL MAGNUM
29-Sep-94
TO NO. YEARS 5.000
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-94 1000.00 #VALUE! #VALUE!
FEE 30-Sep-95 0 #VALUE! #VALUE!
FEE 30-Sep-96 0 #VALUE! #VALUE!
FEE 30-Sep-97 0 9.073391 0.00000
FEE 30-Sep-98 0 8.218199 0.00000
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 #VALUE! #VALUE!
5.000
FORMULA: 1000*(1+T)= #VALUE!
= #VALUE!
T = N/A
R = N/A
NLIC VAII EMERGING MARKETS
29-Sep-94
TO NO. YEARS 5.000
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-94 1000.00 #VALUE! #VALUE!
FEE 30-Sep-95 0 #VALUE! #VALUE!
FEE 30-Sep-96 0 #VALUE! #VALUE!
FEE 30-Sep-97 0 12.709264 0.00000
FEE 30-Sep-98 0 6.793275 0.00000
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 #VALUE! #VALUE!
5.000
FORMULA: 1000*(1+T)= #VALUE!
= #VALUE!
T = N/A
R = N/A
NLIC VAII EMERGING GROWTH
29-Sep-94
TO NO. YEARS 5.000
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-94 1000.00 #VALUE! #VALUE!
FEE 30-Sep-95 0 4.045230 0.00000
FEE 30-Sep-96 0 5.047517 0.00000
FEE 30-Sep-97 0 6.160225 0.00000
FEE 30-Sep-98 0 6.188580 0.00000
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 #VALUE! #VALUE!
5.000
FORMULA: 1000*(1+T)= #VALUE!
= #VALUE!
T = N/A
R = N/A
NLIC VAII REAL ESTATE
29-Sep-94
TO NO. YEARS 5.000
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-94 1000.00 #VALUE! #VALUE!
FEE 30-Sep-95 0 #VALUE! #VALUE!
FEE 30-Sep-96 0 #VALUE! #VALUE!
FEE 30-Sep-97 0 11.517900 0.00000
FEE 30-Sep-98 0 10.111433 0.00000
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 #VALUE! #VALUE!
5.000
FORMULA: 1000*(1+T)= #VALUE!
= #VALUE!
T = N/A
R = N/A
NLIC VAII COMPETITIVE EDGE
29-Sep-94
TO NO. YEARS 5.000
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-94 1000.00 #VALUE! #VALUE!
FEE 30-Sep-95 0 #VALUE! #VALUE!
FEE 30-Sep-96 0 #VALUE! #VALUE!
FEE 30-Sep-97 0 #VALUE! #VALUE!
FEE 30-Sep-98 0 8.014384 0.00000
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 #VALUE! #VALUE!
5.000
FORMULA: 1000*(1+T)= #VALUE!
= #VALUE!
T = N/A
R = N/A
NLIC VAII S&P 500 INDEX
29-Sep-94
TO NO. YEARS 5.000
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-94 1000.00 #VALUE! #VALUE!
FEE 30-Sep-95 0 #VALUE! #VALUE!
FEE 30-Sep-96 0 #VALUE! #VALUE!
FEE 30-Sep-97 0 #VALUE! #VALUE!
FEE 30-Sep-98 0 7.964990 0.00000
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 #VALUE! #VALUE!
5.000
FORMULA: 1000*(1+T)= #VALUE!
= #VALUE!
T = N/A
R = N/A
NLIC VAII AGGRESSIVE EQUITY
29-Sep-94
TO NO. YEARS 5.000
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-94 1000.00 #VALUE! #VALUE!
FEE 30-Sep-95 0 #VALUE! #VALUE!
FEE 30-Sep-96 0 #VALUE! #VALUE!
FEE 30-Sep-97 0 #VALUE! #VALUE!
FEE 30-Sep-98 0 #VALUE! #VALUE!
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 #VALUE! #VALUE!
5.000
FORMULA: 1000*(1+T)= #VALUE!
= #VALUE!
T = N/A
R = N/A
NLIC VAII SHORT TERM BOND
29-Sep-94
TO NO. YEARS 5.000
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-94 1000.00 #VALUE! #VALUE!
FEE 30-Sep-95 0 #VALUE! #VALUE!
FEE 30-Sep-96 0 #VALUE! #VALUE!
FEE 30-Sep-97 0 #VALUE! #VALUE!
FEE 30-Sep-98 0 #VALUE! #VALUE!
FEE 30-Sep-99 0 10.000000 0.00000
RESULTING VALUE 30-Sep-99 10.000000 #VALUE! #VALUE!
5.000
FORMULA: 1000*(1+T)= #VALUE!
= #VALUE!
T = N/A
R = N/A
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
NLIC VAII MONEY MARKET
29-Sep-89
TO NO. YEARS 10.000
30-Sep-99
<S> <C> <C> <C> <C> <C> <C>
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 29-Sep-89 1000.00 6.645915 150.46837
FEE 29-Sep-90 0 7.125237 0.00000
FEE 29-Sep-91 0 7.522028 0.00000
FEE 29-Sep-92 0 7.754210 0.00000
FEE 29-Sep-93 0 7.905950 0.00000
FEE 29-Sep-94 0 8.098168 0.00000
FEE 29-Sep-95 0 8.477124 0.00000
FEE 29-Sep-96 0 8.838429 0.00000
FEE 29-Sep-97 0 9.221501 0.00000
FEE 29-Sep-98 0 9.626982 0.00000
FEE 29-Sep-99 0 9.998898 0.00000
RESULTING VALUE 29-Sep-99 9.998898 150.46837 1504.5178
10.000
FORMULA: 1000*(1+T)= 1504.5178 - (0.85 * 1000 * 0)
= 1504.51783
T = 4.17%
R = 50.45%
NLIC VAII HIGH YIELD
29-Sep-89
TO NO. YEARS 10.000
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 29-Sep-89 1000.00 5.459616 183.16307
FEE 29-Sep-90 0 4.251906 0.00000
FEE 29-Sep-91 0 5.202393 0.00000
FEE 29-Sep-92 0 6.692661 0.00000
FEE 29-Sep-93 0 7.686061 0.00000
FEE 29-Sep-94 0 7.850040 0.00000
FEE 29-Sep-95 0 8.764765 0.00000
FEE 29-Sep-96 0 9.659840 0.00000
FEE 29-Sep-97 0 10.831697 0.00000
FEE 29-Sep-98 0 10.323604 0.00000
FEE 29-Sep-99 0 10.046621 0.00000
RESULTING VALUE 29-Sep-99 10.046621 183.16307 1840.1700
10.000
FORMULA: 1000*(1+T)= 1840.1700 - (0.85 * 1000 * 0)
= 1840.16998
T = 6.29%
R = 84.02%
NLIC VAII EQUITY
29-Sep-89
TO NO. YEARS 10.000
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 29-Sep-89 1000.00 1.884440 530.66161
FEE 29-Sep-90 0 1.638705 0.00000
FEE 29-Sep-91 0 2.482267 0.00000
FEE 29-Sep-92 0 2.529807 0.00000
FEE 29-Sep-93 0 3.518259 0.00000
FEE 29-Sep-94 0 3.170816 0.00000
FEE 29-Sep-95 0 4.288225 0.00000
FEE 29-Sep-96 0 4.826667 0.00000
FEE 29-Sep-97 0 6.760090 0.00000
FEE 29-Sep-98 0 7.501496 0.00000
FEE 29-Sep-99 0 9.958591 0.00000
RESULTING VALUE 29-Sep-99 9.958591 530.66161 5284.6418
10.000
FORMULA: 1000*(1+T)= 5284.6418 - (0.85 * 1000 * 0)
= 5284.64175
T = 18.11%
R = 428.46%
NLIC VAII QUALITY INCOME
29-Sep-89
TO NO. YEARS 10.000
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 29-Sep-89 1000.00 4.971570 201.14372
FEE 29-Sep-90 0 5.193072 0.00000
FEE 29-Sep-91 0 6.025614 0.00000
FEE 29-Sep-92 0 6.827608 0.00000
FEE 29-Sep-93 0 7.760779 0.00000
FEE 29-Sep-94 0 7.058082 0.00000
FEE 29-Sep-95 0 8.286588 0.00000
FEE 29-Sep-96 0 8.529045 0.00000
FEE 29-Sep-97 0 9.403398 0.00000
FEE 29-Sep-98 0 10.354146 0.00000
FEE 29-Sep-99 0 9.944819 0.00000
RESULTING VALUE 29-Sep-99 9.944819 201.14372 2000.3379
10.000
FORMULA: 1000*(1+T)= 2000.3379 - (0.85 * 1000 * 0)
= 2000.33792
T = 7.18%
R = 100.03%
NLIC VAII STRATEGIST
29-Sep-89
TO NO. YEARS 10.000
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 29-Sep-89 1000.00 3.430968 291.46292
FEE 29-Sep-90 0 3.319940 0.00000
FEE 29-Sep-91 0 4.215338 0.00000
FEE 29-Sep-92 0 4.677839 0.00000
FEE 29-Sep-93 0 5.112448 0.00000
FEE 29-Sep-94 0 5.357149 0.00000
FEE 29-Sep-95 0 5.652493 0.00000
FEE 29-Sep-96 0 6.337538 0.00000
FEE 29-Sep-97 0 7.712736 0.00000
FEE 29-Sep-98 0 8.241111 0.00000
FEE 29-Sep-99 0 9.928605 0.00000
RESULTING VALUE 29-Sep-99 9.928605 291.46292 2893.8202
10.000
FORMULA: 1000*(1+T)= 2893.8202 - (0.85 * 1000 * 0)
= 2893.82025
T = 11.21%
NLIC VAII DIVIDEND GROWTH
29-Sep-89
TO NO. YEARS 10.000
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 29-Sep-89 1000.00 #VALUE! #VALUE!
FEE 29-Sep-90 0 2.731386 0.00000
FEE 29-Sep-91 0 3.544803 0.00000
FEE 29-Sep-92 0 3.944816 0.00000
FEE 29-Sep-93 0 4.427426 0.00000
FEE 29-Sep-94 0 4.507820 0.00000
FEE 29-Sep-95 0 5.585655 0.00000
FEE 29-Sep-96 0 6.764201 0.00000
FEE 29-Sep-97 0 9.134568 0.00000
FEE 29-Sep-98 0 9.414501 0.00000
FEE 29-Sep-99 0 9.910767 0.00000
RESULTING VALUE 29-Sep-99 9.910767 #VALUE! #VALUE!
10.000
FORMULA: 1000*(1+T)= #VALUE! - (0.85 * 1000 * 0)
= #VALUE!
T = N/A
R = N/A
NLIC VAII UTILITIES
29-Sep-89
TO NO. YEARS 10.000
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 29-Sep-89 1000.00 #VALUE! #VALUE!
FEE 29-Sep-90 0 3.073155 0.00000
FEE 29-Sep-91 0 3.718102 0.00000
FEE 29-Sep-92 0 4.281038 0.00000
FEE 29-Sep-93 0 5.380930 0.00000
FEE 29-Sep-94 0 4.692235 0.00000
FEE 29-Sep-95 0 5.594975 0.00000
FEE 29-Sep-96 0 5.978541 0.00000
FEE 29-Sep-97 0 7.187083 0.00000
FEE 29-Sep-98 0 8.998115 0.00000
FEE 29-Sep-99 0 9.888607 0.00000
RESULTING VALUE 29-Sep-99 9.888607 #VALUE! #VALUE!
10.000
FORMULA: 1000*(1+T)= #VALUE! - (0.85 * 1000 * 0)
= #VALUE!
T = N/A
R = N/A
NLIC VAII EUROPEAN GROWTH
29-Sep-89
TO NO. YEARS 10.000
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 29-Sep-89 1000.00 #VALUE! #VALUE!
FEE 29-Sep-90 0 #VALUE! #VALUE!
FEE 29-Sep-91 0 2.710442 0.00000
FEE 29-Sep-92 0 2.863750 0.00000
FEE 29-Sep-93 0 3.588242 0.00000
FEE 29-Sep-94 0 4.268773 0.00000
FEE 29-Sep-95 0 5.247977 0.00000
FEE 29-Sep-96 0 6.218870 0.00000
FEE 29-Sep-97 0 8.029865 0.00000
FEE 29-Sep-98 0 8.589332 0.00000
FEE 29-Sep-99 0 9.948515 0.00000
RESULTING VALUE 29-Sep-99 9.948515 #VALUE! #VALUE!
10.000
FORMULA: 1000*(1+T)= #VALUE! - (0.85 * 1000 * 0)
= #VALUE!
T = N/A
R = N/A
NLIC VAII CAPITAL GROWTH
29-Sep-89
TO NO. YEARS 10.000
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 29-Sep-89 1000.00 #VALUE! #VALUE!
FEE 29-Sep-90 0 #VALUE! #VALUE!
FEE 29-Sep-91 0 4.250085 0.00000
FEE 29-Sep-92 0 4.520290 0.00000
FEE 29-Sep-93 0 4.350224 0.00000
FEE 29-Sep-94 0 4.513564 0.00000
FEE 29-Sep-95 0 5.451809 0.00000
FEE 29-Sep-96 0 6.574026 0.00000
FEE 29-Sep-97 0 8.708537 0.00000
FEE 29-Sep-98 0 8.261982 0.00000
FEE 29-Sep-99 0 9.957192 0.00000
RESULTING VALUE 29-Sep-99 9.957192 #VALUE! #VALUE!
10.000
FORMULA: 1000*(1+T)= #VALUE! - (0.85 * 1000 * 0)
= #VALUE!
T = N/A
NLIC VAII PACIFIC GROWTH
29-Sep-89
TO NO. YEARS 10.000
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 29-Sep-89 1000.00 #VALUE! #VALUE!
FEE 29-Sep-90 0 #VALUE! #VALUE!
FEE 29-Sep-91 0 #VALUE! #VALUE!
FEE 29-Sep-92 0 #VALUE! #VALUE!
FEE 29-Sep-93 0 #VALUE! #VALUE!
FEE 29-Sep-94 0 13.679996 0.00000
FEE 29-Sep-95 0 12.958225 0.00000
FEE 29-Sep-96 0 13.272495 0.00000
FEE 29-Sep-97 0 11.392397 0.00000
FEE 29-Sep-98 0 5.900420 0.00000
FEE 29-Sep-99 0 9.914264 0.00000
RESULTING VALUE 29-Sep-99 9.914264 #VALUE! #VALUE!
10.000
FORMULA: 1000*(1+T)= #VALUE! - (0.85 * 1000 * 0)
= #VALUE!
T = N/A
R = N/A
NLIC VAII GLOBAL DIVIDEND GROWTH
29-Sep-89
TO NO. YEARS 10.000
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 29-Sep-89 1000.00 #VALUE! #VALUE!
FEE 29-Sep-90 0 #VALUE! #VALUE!
FEE 29-Sep-91 0 #VALUE! #VALUE!
FEE 29-Sep-92 0 #VALUE! #VALUE!
FEE 29-Sep-93 0 #VALUE! #VALUE!
FEE 29-Sep-94 0 5.387708 0.00000
FEE 29-Sep-95 0 6.097607 0.00000
FEE 29-Sep-96 0 7.011083 0.00000
FEE 29-Sep-97 0 8.671800 0.00000
FEE 29-Sep-98 0 8.107298 0.00000
FEE 29-Sep-99 0 9.886598 0.00000
RESULTING VALUE 29-Sep-99 9.886598 #VALUE! #VALUE!
10.000
FORMULA: 1000*(1+T)= #VALUE! - (0.85 * 1000 * 0)
= #VALUE!
T = N/A
R = N/A
NLIC VAII CAPITAL APPRECIATION
29-Sep-89
TO NO. YEARS 10.000
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 29-Sep-89 1000.00 #VALUE! #VALUE!
FEE 29-Sep-90 0 #VALUE! #VALUE!
FEE 29-Sep-91 0 #VALUE! #VALUE!
FEE 29-Sep-92 0 #VALUE! #VALUE!
FEE 29-Sep-93 0 #VALUE! #VALUE!
FEE 29-Sep-94 0 #VALUE! #VALUE!
FEE 29-Sep-95 0 #VALUE! #VALUE!
FEE 29-Sep-96 0 #VALUE! #VALUE!
FEE 29-Sep-97 0 12.344996 0.00000
FEE 29-Sep-98 0 9.574896 0.00000
FEE 29-Sep-99 0 10.871412 0.00000
RESULTING VALUE 29-Sep-99 10.871412 #VALUE! #VALUE!
10.000
FORMULA: 1000*(1+T)= #VALUE! - (0.85 * 1000 * 0)
= #VALUE!
T = N/A
R = N/A
NLIC VAII INCOME BUILDER
29-Sep-89
TO NO. YEARS 10.000
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 29-Sep-89 1000.00 #VALUE! #VALUE!
FEE 29-Sep-90 0 #VALUE! #VALUE!
FEE 29-Sep-91 0 #VALUE! #VALUE!
FEE 29-Sep-92 0 #VALUE! #VALUE!
FEE 29-Sep-93 0 #VALUE! #VALUE!
FEE 29-Sep-94 0 #VALUE! #VALUE!
FEE 29-Sep-95 0 #VALUE! #VALUE!
FEE 29-Sep-96 0 #VALUE! #VALUE!
FEE 29-Sep-97 0 9.440398 0.00000
FEE 29-Sep-98 0 9.200337 0.00000
FEE 29-Sep-99 0 9.959125 0.00000
RESULTING VALUE 29-Sep-99 9.959125 #VALUE! #VALUE!
10.000
FORMULA: 1000*(1+T)= #VALUE! - (0.85 * 1000 * 0)
= #VALUE!
T = N/A
R = N/A
NLIC VAII EQUITY GROWTH
29-Sep-89
TO NO. YEARS 10.000
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 29-Sep-89 1000.00 #VALUE! #VALUE!
FEE 29-Sep-90 0 #VALUE! #VALUE!
FEE 29-Sep-91 0 #VALUE! #VALUE!
FEE 29-Sep-92 0 #VALUE! #VALUE!
FEE 29-Sep-93 0 #VALUE! #VALUE!
FEE 29-Sep-94 0 #VALUE! #VALUE!
FEE 29-Sep-95 0 #VALUE! #VALUE!
FEE 29-Sep-96 0 #VALUE! #VALUE!
FEE 29-Sep-97 0 7.185482 0.00000
FEE 29-Sep-98 0 7.396956 0.00000
FEE 29-Sep-99 0 9.820717 0.00000
RESULTING VALUE 29-Sep-99 9.820717 #VALUE! #VALUE!
10.000
FORMULA: 1000*(1+T)= #VALUE! - (0.85 * 1000 * 0)
= #VALUE!
T = N/A
R = N/A
NLIC VAII INTERNATIONAL MAGNUM
29-Sep-89
TO NO. YEARS 10.000
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 29-Sep-89 1000.00 #VALUE! #VALUE!
FEE 29-Sep-90 0 #VALUE! #VALUE!
FEE 29-Sep-91 0 #VALUE! #VALUE!
FEE 29-Sep-92 0 #VALUE! #VALUE!
FEE 29-Sep-93 0 #VALUE! #VALUE!
FEE 29-Sep-94 0 #VALUE! #VALUE!
FEE 29-Sep-95 0 #VALUE! #VALUE!
FEE 29-Sep-96 0 #VALUE! #VALUE!
FEE 29-Sep-97 0 9.042336 0.00000
FEE 29-Sep-98 0 8.355094 0.00000
FEE 29-Sep-99 0 9.791885 0.00000
RESULTING VALUE 29-Sep-99 9.791885 #VALUE! #VALUE!
10.000
FORMULA: 1000*(1+T)= #VALUE! - (0.85 * 1000 * 0)
= #VALUE!
T = N/A
R = N/A
NLIC VAII EMERGING MARKETS
29-Sep-89
TO NO. YEARS 10.000
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 29-Sep-89 1000.00 #VALUE! #VALUE!
FEE 29-Sep-90 0 #VALUE! #VALUE!
FEE 29-Sep-91 0 #VALUE! #VALUE!
FEE 29-Sep-92 0 #VALUE! #VALUE!
FEE 29-Sep-93 0 #VALUE! #VALUE!
FEE 29-Sep-94 0 #VALUE! #VALUE!
FEE 29-Sep-95 0 #VALUE! #VALUE!
FEE 29-Sep-96 0 #VALUE! #VALUE!
FEE 29-Sep-97 0 12.699006 0.00000
FEE 29-Sep-98 0 6.967624 0.00000
FEE 29-Sep-99 0 10.075825 0.00000
RESULTING VALUE 29-Sep-99 10.075825 #VALUE! #VALUE!
10.000
FORMULA: 1000*(1+T)= #VALUE! - (0.85 * 1000 * 0)
= #VALUE!
T = N/A
R = N/A
NLIC VAII EMERGING GROWTH
29-Sep-89
TO NO. YEARS 10.000
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 29-Sep-89 1000.00 #VALUE! #VALUE!
FEE 29-Sep-90 0 #VALUE! #VALUE!
FEE 29-Sep-91 0 #VALUE! #VALUE!
FEE 29-Sep-92 0 #VALUE! #VALUE!
FEE 29-Sep-93 0 #VALUE! #VALUE!
FEE 29-Sep-94 0 #VALUE! #VALUE!
FEE 29-Sep-95 0 4.045230 0.00000
FEE 29-Sep-96 0 5.065661 0.00000
FEE 29-Sep-97 0 6.163895 0.00000
FEE 29-Sep-98 0 6.346332 0.00000
FEE 29-Sep-99 0 10.052331 0.00000
RESULTING VALUE 29-Sep-99 10.052331 #VALUE! #VALUE!
10.000
FORMULA: 1000*(1+T)= #VALUE! - (0.85 * 1000 * 0)
= #VALUE!
T = N/A
R = N/A
NLIC VAII REAL ESTATE
29-Sep-89
TO NO. YEARS 10.000
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 29-Sep-89 1000.00 #VALUE! #VALUE!
FEE 29-Sep-90 0 #VALUE! #VALUE!
FEE 29-Sep-91 0 #VALUE! #VALUE!
FEE 29-Sep-92 0 #VALUE! #VALUE!
FEE 29-Sep-93 0 #VALUE! #VALUE!
FEE 29-Sep-94 0 #VALUE! #VALUE!
FEE 29-Sep-95 0 #VALUE! #VALUE!
FEE 29-Sep-96 0 #VALUE! #VALUE!
FEE 29-Sep-97 0 11.378907 0.00000
FEE 29-Sep-98 0 10.132341 0.00000
FEE 29-Sep-99 0 9.969009 0.00000
RESULTING VALUE 29-Sep-99 9.969009 #VALUE! #VALUE!
10.000
FORMULA: 1000*(1+T)= #VALUE! - (0.85 * 1000 * 0)
= #VALUE!
T = N/A
R = N/A
NLIC VAII COMPETITIVE EDGE
29-Sep-89
TO NO. YEARS 10.000
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 29-Sep-89 1000.00 #VALUE! #VALUE!
FEE 29-Sep-90 0 #VALUE! #VALUE!
FEE 29-Sep-91 0 #VALUE! #VALUE!
FEE 29-Sep-92 0 #VALUE! #VALUE!
FEE 29-Sep-93 0 #VALUE! #VALUE!
FEE 29-Sep-94 0 #VALUE! #VALUE!
FEE 29-Sep-95 0 #VALUE! #VALUE!
FEE 29-Sep-96 0 #VALUE! #VALUE!
FEE 29-Sep-97 0 #VALUE! #VALUE!
FEE 29-Sep-98 0 8.265934 0.00000
FEE 29-Sep-99 0 9.923522 0.00000
RESULTING VALUE 29-Sep-99 9.923522 #VALUE! #VALUE!
10.000
FORMULA: 1000*(1+T)= #VALUE! - (0.85 * 1000 * 0)
= #VALUE!
T = N/A
R = N/A
NLIC VAII S&P 500 INDEX
29-Sep-89
TO NO. YEARS 10.000
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 29-Sep-89 1000.00 #VALUE! #VALUE!
FEE 29-Sep-90 0 #VALUE! #VALUE!
FEE 29-Sep-91 0 #VALUE! #VALUE!
FEE 29-Sep-92 0 #VALUE! #VALUE!
FEE 29-Sep-93 0 #VALUE! #VALUE!
FEE 29-Sep-94 0 #VALUE! #VALUE!
FEE 29-Sep-95 0 #VALUE! #VALUE!
FEE 29-Sep-96 0 #VALUE! #VALUE!
FEE 29-Sep-97 0 #VALUE! #VALUE!
FEE 29-Sep-98 0 8.214896 0.00000
FEE 29-Sep-99 0 9.889206 0.00000
RESULTING VALUE 29-Sep-99 9.889206 #VALUE! #VALUE!
10.000
FORMULA: 1000*(1+T)= #VALUE! - (0.85 * 1000 * 0)
= #VALUE!
T = N/A
R = N/A
NLIC VAII AGGRESSIVE EQUITY
29-Sep-89
TO NO. YEARS 10.000
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 29-Sep-89 1000.00 #VALUE! #VALUE!
FEE 29-Sep-90 0 #VALUE! #VALUE!
FEE 29-Sep-91 0 #VALUE! #VALUE!
FEE 29-Sep-92 0 #VALUE! #VALUE!
FEE 29-Sep-93 0 #VALUE! #VALUE!
FEE 29-Sep-94 0 #VALUE! #VALUE!
FEE 29-Sep-95 0 #VALUE! #VALUE!
FEE 29-Sep-96 0 #VALUE! #VALUE!
FEE 29-Sep-97 0 #VALUE! #VALUE!
FEE 29-Sep-98 0 #VALUE! #VALUE!
FEE 29-Sep-99 0 9.990556 0.00000
RESULTING VALUE 29-Sep-99 9.990556 #VALUE! #VALUE!
10.000
FORMULA: 1000*(1+T)= #VALUE! - (0.85 * 1000 * 0)
= #VALUE!
T = N/A
R = N/A
NLIC VAII SHORT TERM BOND
29-Sep-89
TO NO. YEARS 10.000
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 29-Sep-89 1000.00 #VALUE! #VALUE!
FEE 29-Sep-90 0 #VALUE! #VALUE!
FEE 29-Sep-91 0 #VALUE! #VALUE!
FEE 29-Sep-92 0 #VALUE! #VALUE!
FEE 29-Sep-93 0 #VALUE! #VALUE!
FEE 29-Sep-94 0 #VALUE! #VALUE!
FEE 29-Sep-95 0 #VALUE! #VALUE!
FEE 29-Sep-96 0 #VALUE! #VALUE!
FEE 29-Sep-97 0 #VALUE! #VALUE!
FEE 29-Sep-98 0 #VALUE! #VALUE!
FEE 29-Sep-99 0 9.987625 0.00000
RESULTING VALUE 29-Sep-99 9.987625 #VALUE! #VALUE!
10.000
FORMULA: 1000*(1+T)= #VALUE! - (0.85 * 1000 * 0)
= #VALUE!
T = N/A
R = N/A
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
NLIC VAII MONEY MARKET
09-Mar-84
TO NO. YEARS 15.559
30-Sep-99
<S> <C> <C> <C> <C> <C> <C> <C>
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 09-Mar-84 1000.00 4.785760 208.95323
1 FEE 09-Mar-85 0 5.013142 0.00000 0.06
2 FEE 09-Mar-86 0 5.353480 0.00000 0.05
3 FEE 09-Mar-87 0 5.632938 0.00000 0.04
4 09-Mar-88 0 5.950037 0.00000 0.03
5 09-Mar-89 0 6.350460 0.00000 0.02
6 09-Mar-90 0 6.860066 0.00000 0.01
7 09-Mar-91 0 7.323778 0.00000 0
8 09-Mar-92 0 7.646141 0.00000 0
9 09-Mar-93 0 7.825464 0.00000 0
10 09-Mar-94 0 7.972547 0.00000 0
11 09-Mar-95 0 8.253015 0.00000 0
12 09-Mar-96 0 8.640843 0.00000 0
13 09-Mar-97 0 9.001363 0.00000 0
14 FEE 09-Mar-98 0 9.399744 0.00000 0
15 FEE 09-Mar-99 0 9.794762 0.00000 0
RESULTING VALUE 30-Sep-99 10.000000 208.95323 2089.5323
15.559
FORMULA: 1000*(1+T)= 2089.5323
= 2089.5323
T = 4.85%
R = 108.95%
NLIC VAII HIGH YIELD
09-Mar-84
TO NO. YEARS 15.559
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 09-Mar-84 1000.00 3.366585 297.03688
1 FEE 09-Mar-85 0 3.792975 0.00000 0.06
2 FEE 09-Mar-86 0 4.838327 0.00000 0.05
3 FEE 09-Mar-87 0 5.739076 0.00000 0.04
4 09-Mar-88 0 5.485026 0.00000 0.03
5 09-Mar-89 0 5.887004 0.00000 0.02
6 09-Mar-90 0 4.630660 0.00000 0.01
7 09-Mar-91 0 4.240776 0.00000 0
8 09-Mar-92 0 6.468595 0.00000 0
9 09-Mar-93 0 7.090077 0.00000 0
10 09-Mar-94 0 8.373358 0.00000 0
11 09-Mar-95 0 7.975383 0.00000 0
12 09-Mar-96 0 9.168324 0.00000 0
13 09-Mar-97 0 9.948686 0.00000 0
14 FEE 09-Mar-98 0 11.213846 0.00000 0
15 FEE 09-Mar-99 0 10.132057 0.00000 0
RESULTING VALUE 30-Sep-99 10.000000 297.03688 2970.3688
15.559
FORMULA: 1000*(1+T)= 2970.3688
= 2970.3688
T = 7.25%
R = 197.04%
NLIC VAII EQUITY
09-Mar-84
TO NO. YEARS 15.559
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 09-Mar-84 1000.00 1.023313 977.21787
1 FEE 09-Mar-85 0 1.175656 0.00000 0.06
2 FEE 09-Mar-86 0 1.513260 0.00000 0.05
3 FEE 09-Mar-87 0 1.889207 0.00000 0.04
4 09-Mar-88 0 1.631356 0.00000 0.03
5 09-Mar-89 0 1.683016 0.00000 0.02
6 09-Mar-90 0 1.823042 0.00000 0.01
7 09-Mar-91 0 2.145063 0.00000 0
8 09-Mar-92 0 2.647807 0.00000 0
9 09-Mar-93 0 2.984492 0.00000 0
10 09-Mar-94 0 3.508172 0.00000 0
11 09-Mar-95 0 3.280653 0.00000 0
12 09-Mar-96 0 4.495346 0.00000 0
13 09-Mar-97 0 5.387791 0.00000 0
14 FEE 09-Mar-98 0 7.248439 0.00000 0
15 FEE 09-Mar-99 0 9.591575 0.00000 0
RESULTING VALUE 30-Sep-99 10.000000 977.21787 9772.1787
15.559
FORMULA: 1000*(1+T)= 9772.1787
= 9772.1787
T = 15.78%
R = 877.22%
NLIC VAII QUALITY INCOME
01-Mar-87
TO NO. YEARS 12.583
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 01-Mar-87 1000.00 4.201219 238.02617
1 FEE 01-Mar-88 0 4.457077 0.00000 0.06
2 FEE 01-Mar-89 0 4.570718 0.00000 0.05
3 FEE 01-Mar-90 0 4.991974 0.00000 0.04
4 01-Mar-91 0 5.545515 0.00000 0.03
5 01-Mar-92 0 6.308882 0.00000 0.02
6 01-Mar-93 0 7.198200 0.00000 0.01
7 01-Mar-94 0 7.494013 0.00000 0
8 01-Mar-95 0 7.448584 0.00000 0
9 01-Mar-96 0 8.550873 0.00000 0
10 01-Mar-97 0 8.831728 0.00000 0
11 01-Mar-98 0 9.787202 0.00000 0
12 01-Mar-99 0 10.157107 0.00000 0
13 30-Sep-99 0 10.000000 0.00000 0
14 FEE N/A 0 N/A 0.00000 0
15 FEE N/A 0 N/A 0.00000 0
RESULTING VALUE 30-Sep-99 10.000000 238.02617 2380.2617
12.583
FORMULA: 1000*(1+T)= 2380.2617
= 2380.2617
T = 7.13%
R = 138.03%
NLIC VAII STRATEGIST
01-Mar-87
TO NO. YEARS 12.583
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 01-Mar-87 1000.00 2.842634 351.78635
1 FEE 01-Mar-88 0 3.074139 0.00000 0.06
2 FEE 01-Mar-89 0 3.229812 0.00000 0.05
3 FEE 01-Mar-90 0 3.504644 0.00000 0.04
4 01-Mar-91 0 3.948320 0.00000 0.03
5 01-Mar-92 0 4.538227 0.00000 0.02
6 01-Mar-93 0 4.899047 0.00000 0.01
7 01-Mar-94 0 5.287233 0.00000 0
8 01-Mar-95 0 5.449360 0.00000 0
9 01-Mar-96 0 6.037526 0.00000 0
10 01-Mar-97 0 6.935061 0.00000 0
11 01-Mar-98 0 8.053547 0.00000 0
12 01-Mar-99 0 9.556488 0.00000 0
13 30-Sep-99 0 10.000000 0.00000 0
14 FEE N/A 0 N/A 0.00000 0
15 FEE N/A 0 N/A 0.00000 0
RESULTING VALUE 30-Sep-99 10.000000 351.78635 3517.8635
12.583
FORMULA: 1000*(1+T)= 3517.8635
= 3517.8635
T = 10.51%
R = 251.79%
NLIC VAII DIVIDEND GROWTH
01-Mar-90
TO NO. YEARS 9.582
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 01-Mar-90 1000.00 3.247385 307.94010
1 FEE 01-Mar-91 0 3.361047 0.00000 0.06
2 FEE 01-Mar-92 0 3.790644 0.00000 0.05
3 FEE 01-Mar-93 0 4.185222 0.00000 0.04
4 01-Mar-94 0 4.525182 0.00000 0.03
5 01-Mar-95 0 4.684061 0.00000 0.02
6 01-Mar-96 0 6.310473 0.00000 0.01
7 01-Mar-97 0 7.589050 0.00000 0
8 01-Mar-98 0 9.682432 0.00000 0
9 01-Mar-99 0 10.104674 0.00000 0
10 30-Sep-99 0 10.000000 0.00000 0
11 N/A 0 N/A 0.00000 0
12 N/A 0 N/A 0.00000 0
13 N/A 0 N/A 0.00000 0
14 FEE N/A 0 N/A 0.00000 0
15 FEE N/A 0 N/A 0.00000 0
RESULTING VALUE 30-Sep-99 10.000000 307.94010 3079.4010
9.582
FORMULA: 1000*(1+T)= 3079.4010
= 3079.4010
T = 12.45%
R = 207.94%
NLIC VAII UTILITIES
01-Mar-90
TO NO. YEARS 9.582
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 01-Mar-90 1000.00 3.242903 308.36573
1 FEE 01-Mar-91 0 3.478661 0.00000 0.06
2 FEE 01-Mar-92 0 3.882362 0.00000 0.05
3 FEE 01-Mar-93 0 4.837651 0.00000 0.04
4 01-Mar-94 0 4.903562 0.00000 0.03
5 01-Mar-95 0 4.842032 0.00000 0.02
6 01-Mar-96 0 5.982712 0.00000 0.01
7 01-Mar-97 0 6.467001 0.00000 0
8 01-Mar-98 0 8.303439 0.00000 0
9 01-Mar-99 0 9.553154 0.00000 0
10 30-Sep-99 0 10.000000 0.00000 0
11 N/A 0 N/A 0.00000 0
12 N/A 0 N/A 0.00000 0
13 N/A 0 N/A 0.00000 0
14 FEE N/A 0 N/A 0.00000 0
15 FEE N/A 0 N/A 0.00000 0
RESULTING VALUE 30-Sep-99 10.000000 308.36573 3083.6573
9.582
FORMULA: 1000*(1+T)= 3083.6573
= 3083.6573
T = 12.47%
R = 208.37%
NLIC VAII EUROPEAN GROWTH
01-Mar-91
TO NO. YEARS 8.583
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 01-Mar-91 1000.00 2.747790 363.92877
1 FEE 01-Mar-92 0 2.846725 0.00000 0.06
2 FEE 01-Mar-93 0 2.983271 0.00000 0.05
3 FEE 01-Mar-94 0 4.124263 0.00000 0.04
4 01-Mar-95 0 4.395977 0.00000 0.03
5 01-Mar-96 0 5.622569 0.00000 0.02
6 01-Mar-97 0 6.925156 0.00000 0.01
7 01-Mar-98 0 8.968604 0.00000 0
8 01-Mar-99 0 9.595467 0.00000 0
9 30-Sep-99 0 10.000000 0.00000 0
10 N/A 0 N/A 0.00000 0
11 N/A 0 N/A 0.00000 0
12 N/A 0 N/A 0.00000 0
13 N/A 0 N/A 0.00000 0
14 FEE N/A 0 N/A 0.00000 0
15 FEE N/A 0 N/A 0.00000 0
RESULTING VALUE 30-Sep-99 10.000000 363.92877 3639.2877
8.583
FORMULA: 1000*(1+T)= 3639.2877
= 3639.2877
T = 16.24%
R = 263.93%
NLIC VAII CAPITAL GROWTH
01-Mar-91
TO NO. YEARS 8.583
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 01-Mar-91 1000.00 3.884500 257.43337
1 FEE 01-Mar-92 0 4.740990 0.00000 0.06
2 FEE 01-Mar-93 0 4.648976 0.00000 0.05
3 FEE 01-Mar-94 0 4.634554 0.00000 0.04
4 01-Mar-95 0 4.819852 0.00000 0.03
5 01-Mar-96 0 6.275202 0.00000 0.02
6 01-Mar-97 0 6.768005 0.00000 0.01
7 01-Mar-98 0 8.789568 0.00000 0
8 01-Mar-99 0 9.575662 0.00000 0
9 30-Sep-99 0 10.000000 0.00000 0
10 N/A 0 N/A 0.00000 0
11 N/A 0 N/A 0.00000 0
12 N/A 0 N/A 0.00000 0
13 N/A 0 N/A 0.00000 0
14 FEE N/A 0 N/A 0.00000 0
15 FEE N/A 0 N/A 0.00000 0
RESULTING VALUE 30-Sep-99 10.000000 257.43337 2574.3337
8.583
FORMULA: 1000*(1+T)= 2574.3337
= 2574.3337
T = 11.65%
R = 157.43%
NLIC VAII PACIFIC GROWTH
24-Feb-94
TO NO. YEARS 5.596
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 24-Feb-94 1000.00 13.397165 74.64266
1 FEE 24-Feb-95 0 11.739065 0.00000 0.06
2 FEE 24-Feb-96 0 14.067227 0.00000 0.05
3 FEE 24-Feb-97 0 13.496225 0.00000 0.04
4 24-Feb-98 0 8.299260 0.00000 0.03
5 24-Feb-99 0 7.136674 0.00000 0.02
6 30-Sep-99 0 10.000000 0.00000 0.01
7 N/A 0 N/A 0.00000 0
8 N/A 0 N/A 0.00000 0
9 N/A 0 N/A 0.00000 0
10 N/A 0 N/A 0.00000 0
11 N/A 0 N/A 0.00000 0
12 N/A 0 N/A 0.00000 0
13 N/A 0 N/A 0.00000 0
14 FEE N/A 0 N/A 0.00000 0
15 FEE N/A 0 N/A 0.00000 0
RESULTING VALUE 30-Sep-99 10.000000 74.64266 746.4266
5.596
FORMULA: 1000*(1+T)= 746.4266
= 746.4266
T = -5.09%
R = -25.36%
NLIC VAII GLOBAL DIVIDEND GROWTH
24-Feb-94
TO NO. YEARS 5.596
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 24-Feb-94 1000.00 5.306033 188.46470
1 FEE 24-Feb-95 0 5.315946 0.00000 0.06
2 FEE 24-Feb-96 0 6.615655 0.00000 0.05
3 FEE 24-Feb-97 0 7.543318 0.00000 0.04
4 24-Feb-98 0 8.649809 0.00000 0.03
5 24-Feb-99 0 9.034243 0.00000 0.02
6 30-Sep-99 0 10.000000 0.00000 0.01
7 N/A 0 N/A 0.00000 0
8 N/A 0 N/A 0.00000 0
9 N/A 0 N/A 0.00000 0
10 N/A 0 N/A 0.00000 0
11 N/A 0 N/A 0.00000 0
12 N/A 0 N/A 0.00000 0
13 N/A 0 N/A 0.00000 0
14 FEE N/A 0 N/A 0.00000 0
15 FEE N/A 0 N/A 0.00000 0
RESULTING VALUE 30-Sep-99 10.000000 188.46470 1884.6470
5.596
FORMULA: 1000*(1+T)= 1884.6470
= 1884.6470
T = 11.99%
R = 88.46%
NLIC VAII CAPITAL APPRECIATION
21-Jan-97
TO NO. YEARS 2.689
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 21-Jan-97 1000.00 10.000000 100.00000
1 FEE 21-Jan-98 0 10.951230 0.00000 0.06
2 FEE 21-Jan-99 0 10.562537 0.00000 0.05
3 FEE 30-Sep-99 0 10.871412 0.00000 0.04
4 N/A 0 N/A 0.00000 0.03
5 N/A 0 N/A 0.00000 0.02
6 N/A 0 N/A 0.00000 0.01
7 N/A 0 N/A 0.00000 0
8 N/A 0 N/A 0.00000 0
9 N/A 0 N/A 0.00000 0
10 N/A 0 N/A 0.00000 0
11 N/A 0 N/A 0.00000 0
12 N/A 0 N/A 0.00000 0
13 N/A 0 N/A 0.00000 0
14 FEE N/A 0 N/A 0.00000 0
15 FEE N/A 0 N/A 0.00000 0
RESULTING VALUE 30-Sep-99 10.871412 100.00000 1087.1412
2.689
FORMULA: 1000*(1+T)= 1087.1412
= 1087.1412
T = 3.16%
R = 8.71%
NLIC VAII INCOME BUILDER
21-Jan-97
TO NO. YEARS 2.689
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 21-Jan-97 1000.00 7.992791 125.11274
1 FEE 21-Jan-98 0 9.684557 0.00000 0.06
2 FEE 21-Jan-99 0 10.025415 0.00000 0.05
3 FEE 30-Sep-99 0 10.000000 0.00000 0.04
4 N/A 0 N/A 0.00000 0.03
5 N/A 0 N/A 0.00000 0.02
6 N/A 0 N/A 0.00000 0.01
7 N/A 0 N/A 0.00000 0
8 N/A 0 N/A 0.00000 0
9 N/A 0 N/A 0.00000 0
10 N/A 0 N/A 0.00000 0
11 N/A 0 N/A 0.00000 0
12 N/A 0 N/A 0.00000 0
13 N/A 0 N/A 0.00000 0
14 FEE N/A 0 N/A 0.00000 0
15 FEE N/A 0 N/A 0.00000 0
RESULTING VALUE 30-Sep-99 10.000000 125.11274 1251.1274
2.689
FORMULA: 1000*(1+T)= 1251.1274
= 1251.1274
T = 8.69%
R = 25.11%
NLIC VAII EQUITY GROWTH
02-Jan-97
TO NO. YEARS 2.741
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 02-Jan-97 1000.00 5.630574 177.60180
1 FEE 02-Jan-98 0 7.412213 0.00000 0.06
2 FEE 02-Jan-99 0 8.749168 0.00000 0.05
3 FEE 30-Sep-99 0 10.000000 0.00000 0.04
4 N/A 0 N/A 0.00000 0.03
5 N/A 0 N/A 0.00000 0.02
6 N/A 0 N/A 0.00000 0.01
7 N/A 0 N/A 0.00000 0
8 N/A 0 N/A 0.00000 0
9 N/A 0 N/A 0.00000 0
10 N/A 0 N/A 0.00000 0
11 N/A 0 N/A 0.00000 0
12 N/A 0 N/A 0.00000 0
13 N/A 0 N/A 0.00000 0
14 FEE N/A 0 N/A 0.00000 0
15 FEE N/A 0 N/A 0.00000 0
RESULTING VALUE 30-Sep-99 10.000000 177.60180 1776.0180
2.741
FORMULA: 1000*(1+T)= 1776.0180
= 1776.0180
T = 23.32%
R = 77.60%
NLIC VAII INTERNATIONAL MAGNUM
02-Jan-97
TO NO. YEARS 2.741
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 02-Jan-97 1000.00 7.863438 127.17084
1 FEE 02-Jan-98 0 8.401007 0.00000 0.06
2 FEE 02-Jan-99 0 9.139725 0.00000 0.05
3 FEE 30-Sep-99 0 10.000000 0.00000 0.04
4 N/A 0 N/A 0.00000 0.03
5 N/A 0 N/A 0.00000 0.02
6 N/A 0 N/A 0.00000 0.01
7 N/A 0 N/A 0.00000 0
8 N/A 0 N/A 0.00000 0
9 N/A 0 N/A 0.00000 0
10 N/A 0 N/A 0.00000 0
11 N/A 0 N/A 0.00000 0
12 N/A 0 N/A 0.00000 0
13 N/A 0 N/A 0.00000 0
14 FEE N/A 0 N/A 0.00000 0
15 FEE N/A 0 N/A 0.00000 0
RESULTING VALUE 30-Sep-99 10.000000 127.17084 1271.7084
2.741
FORMULA: 1000*(1+T)= 1271.7084
= 1271.7084
T = 9.17%
R = 27.17%
NLIC VAII EMERGING MARKETS
01-Oct-96
TO NO. YEARS 2.995
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 01-Oct-96 1000.00 10.634658 94.03217
1 FEE 01-Oct-97 0 12.740616 0.00000 0.06
2 FEE 01-Oct-98 0 6.520954 0.00000 0.05
3 FEE 30-Sep-99 0 10.000000 0.00000 0.04
4 N/A 0 N/A 0.00000 0.03
5 N/A 0 N/A 0.00000 0.02
6 N/A 0 N/A 0.00000 0.01
7 N/A 0 N/A 0.00000 0
8 N/A 0 N/A 0.00000 0
9 N/A 0 N/A 0.00000 0
10 N/A 0 N/A 0.00000 0
11 N/A 0 N/A 0.00000 0
12 N/A 0 N/A 0.00000 0
13 N/A 0 N/A 0.00000 0
14 FEE N/A 0 N/A 0.00000 0
15 FEE N/A 0 N/A 0.00000 0
RESULTING VALUE 30-Sep-99 10.000000 94.03217 940.3217
2.995
FORMULA: 1000*(1+T)= 940.3217
= 940.3217
T = -2.03%
R = -5.97%
NLIC VAII EMERGING GROWTH
03-Jul-95
TO NO. YEARS 4.244
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 03-Jul-95 1000.00 3.596551 278.04414
1 FEE 03-Jul-96 0 4.897233 0.00000 0.06
2 FEE 03-Jul-97 0 5.380307 0.00000 0.05
3 FEE 03-Jul-98 0 7.085653 0.00000 0.04
4 03-Jul-99 0 9.842983 0.00000 0.03
5 30-Sep-99 0 10.000000 0.00000 0.02
6 N/A 0 N/A 0.00000 0.01
7 N/A 0 N/A 0.00000 0
8 N/A 0 N/A 0.00000 0
9 N/A 0 N/A 0.00000 0
10 N/A 0 N/A 0.00000 0
11 N/A 0 N/A 0.00000 0
12 N/A 0 N/A 0.00000 0
13 N/A 0 N/A 0.00000 0
14 FEE N/A 0 N/A 0.00000 0
15 FEE N/A 0 N/A 0.00000 0
RESULTING VALUE 30-Sep-99 10.000000 278.04414 2780.4414
4.244
FORMULA: 1000*(1+T)= 2780.4414
= 2780.4414
T = 27.25%
R = 178.04%
NLIC VAII REAL ESTATE
04-Mar-97
TO NO. YEARS 2.574
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 04-Mar-97 1000.00 9.993946 100.06058
1 FEE 04-Mar-98 0 11.447962 0.00000 0.06
2 FEE 04-Mar-99 0 9.746184 0.00000 0.05
3 FEE 30-Sep-99 0 10.000000 0.00000 0.04
4 N/A 0 N/A 0.00000 0.03
5 N/A 0 N/A 0.00000 0.02
6 N/A 0 N/A 0.00000 0.01
7 N/A 0 N/A 0.00000 0
8 N/A 0 N/A 0.00000 0
9 N/A 0 N/A 0.00000 0
10 N/A 0 N/A 0.00000 0
11 N/A 0 N/A 0.00000 0
12 N/A 0 N/A 0.00000 0
13 N/A 0 N/A 0.00000 0
14 FEE N/A 0 N/A 0.00000 0
15 FEE N/A 0 N/A 0.00000 0
RESULTING VALUE 30-Sep-99 10.000000 100.06058 1000.6058
2.574
FORMULA: 1000*(1+T)= 1000.6058
= 1000.6058
T = 0.02%
R = 0.06%
NLIC VAII COMPETITIVE EDGE
18-May-98
TO NO. YEARS 1.369
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 18-May-98 1000.00 9.697297 103.12152
1 FEE 18-May-99 0 9.867253 0.00000 0.06
2 FEE 30-Sep-99 0 10.000000 0.00000 0.05
3 FEE N/A 0 N/A 0.00000 0.04
4 N/A 0 N/A 0.00000 0.03
5 N/A 0 N/A 0.00000 0.02
6 N/A 0 N/A 0.00000 0.01
7 N/A 0 N/A 0.00000 0
8 N/A 0 N/A 0.00000 0
9 N/A 0 N/A 0.00000 0
10 N/A 0 N/A 0.00000 0
11 N/A 0 N/A 0.00000 0
12 N/A 0 N/A 0.00000 0
13 N/A 0 N/A 0.00000 0
14 FEE N/A 0 N/A 0.00000 0
15 FEE N/A 0 N/A 0.00000 0
RESULTING VALUE 30-Sep-99 10.000000 103.12152 1031.2152
1.369
FORMULA: 1000*(1+T)= 1031.2152
= 1031.2152
T = 2.27%
R = 3.12%
NLIC VAII S&P 500 INDEX
18-May-98
TO NO. YEARS 1.369
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 18-May-98 1000.00 8.637283 115.77715
1 FEE 18-May-99 0 10.450507 0.00000 0.06
2 FEE 30-Sep-99 0 10.000000 0.00000 0.05
3 FEE N/A 0 N/A 0.00000 0.04
4 N/A 0 N/A 0.00000 0.03
5 N/A 0 N/A 0.00000 0.02
6 N/A 0 N/A 0.00000 0.01
7 N/A 0 N/A 0.00000 0
8 N/A 0 N/A 0.00000 0
9 N/A 0 N/A 0.00000 0
10 N/A 0 N/A 0.00000 0
11 N/A 0 N/A 0.00000 0
12 N/A 0 N/A 0.00000 0
13 N/A 0 N/A 0.00000 0
14 FEE N/A 0 N/A 0.00000 0
15 FEE N/A 0 N/A 0.00000 0
RESULTING VALUE 30-Sep-99 10.000000 115.77715 1157.7715
1.369
FORMULA: 1000*(1+T)= 1157.7715
= 1157.7715
T = 11.30%
R = 15.78%
NLIC VAII AGGRESSIVE EQUITY
02-May-99
TO NO. YEARS 0.413
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 02-May-99 1000.00 9.679399 103.31220
1 FEE 30-Sep-99 0 10.000000 0.00000 0.06
2 FEE N/A 0 N/A 0.00000 0.05
3 FEE N/A 0 N/A 0.00000 0.04
4 N/A 0 N/A 0.00000 0.03
5 N/A 0 N/A 0.00000 0.02
6 N/A 0 N/A 0.00000 0.01
7 N/A 0 N/A 0.00000 0
8 N/A 0 N/A 0.00000 0
9 N/A 0 N/A 0.00000 0
10 N/A 0 N/A 0.00000 0
11 N/A 0 N/A 0.00000 0
12 N/A 0 N/A 0.00000 0
13 N/A 0 N/A 0.00000 0
14 FEE N/A 0 N/A 0.00000 0
15 FEE N/A 0 N/A 0.00000 0
RESULTING VALUE 30-Sep-99 10.000000 103.31220 1033.1220
0.413
FORMULA: 1000*(1+T)= 1033.1220
= 1033.1220
T = 8.20%
R = 3.31%
NLIC VAII SHORT TERM BOND
02-May-99
TO NO. YEARS 0.413
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 02-May-99 1000.00 9.942034 100.58304
1 FEE 30-Sep-99 0 10.000000 0.00000 0.06
2 FEE N/A 0 N/A 0.00000 0.05
3 FEE N/A 0 N/A 0.00000 0.04
4 N/A 0 N/A 0.00000 0.03
5 N/A 0 N/A 0.00000 0.02
6 N/A 0 N/A 0.00000 0.01
7 N/A 0 N/A 0.00000 0
8 N/A 0 N/A 0.00000 0
9 N/A 0 N/A 0.00000 0
10 N/A 0 N/A 0.00000 0
11 N/A 0 N/A 0.00000 0
12 N/A 0 N/A 0.00000 0
13 N/A 0 N/A 0.00000 0
14 FEE N/A 0 N/A 0.00000 0
15 FEE N/A 0 N/A 0.00000 0
RESULTING VALUE 30-Sep-99 10.000000 100.58304 1005.8304
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
Inception Inception Ten Years Five Years
Fund Date Total Average Total Average Total Average
Money Market 03/09/84 108.95% 4.85% 50.47% 4.17% 23.47% 4.31%
High Yield 03/09/84 197.04% 7.24% 83.16% 6.24% 27.15% 4.92%
Equity 03/09/84 877.22% 15.77% 430.66% 18.16% 214.41% 25.75%
Quality Income 03/01/87 138.03% 7.13% 101.14% 7.24% 41.51% 7.19%
Managed Assets 03/01/87 251.79% 10.51% 191.46% 11.29% 86.67% 13.30%
Dividend Growth 03/01/90 207.94% 12.44% N/A N/A 121.84% 17.28%
Utilities 03/01/90 208.37% 12.46% N/A N/A 112.25% 16.24%
European Growth 03/01/91 263.93% 16.23% N/A N/A 134.26% 18.56%
Capital Growth 03/01/91 157.43% 11.64% N/A N/A 120.79% 17.16%
Pacific Growth 02/24/94 -25.36% -5.09% N/A N/A -26.54% -5.98%
Global Div Growth 02/24/94 88.46% 11.98% N/A N/A 85.24% 13.12%
Capital Appreciation 01/21/97 8.71% 3.15% N/A N/A N/A N/A
Income Builder 01/21/97 25.11% 8.68% N/A N/A N/A N/A
Equity Growth 01/02/97 77.60% 23.30% N/A N/A N/A N/A
International Magnum 01/02/97 27.17% 9.16% N/A N/A N/A N/A
Emerging Markets 10/01/96 -5.97% -2.03% N/A N/A N/A N/A
Emerging Growth 07/03/95 178.04% 27.23% N/A N/A N/A N/A
Real Estate 03/04/97 0.06% 0.02% N/A N/A N/A N/A
Competitive Edge 05/18/98 3.12% 2.27% N/A N/A N/A N/A
S&P 500 Index 05/18/98 15.78% 11.29% N/A N/A N/A N/A
Aggressive Equity 05/02/99 3.31% 8.20% N/A N/A N/A N/A
Short Term Bond 05/02/99 0.58% 1.42% N/A N/A N/A N/A
Three Years Two Years One Year YTD Three Months
Fund Total Average Total Average
Money Market 13.10% 4.19% 8.43% 4.13% 3.86% 2.81% 0.97%
High Yield 3.31% 1.09% -7.93% -4.04% -3.05% -2.43% -5.96%
Equity 107.03% 27.45% 47.97% 21.64% 34.88% 13.70% -2.52%
Quality Income 17.25% 5.45% 6.44% 3.17% -4.40% -4.35% 0.10%
Managed Assets 57.76% 16.41% 30.38% 14.18% 24.18% 5.82% -2.08%
Dividend Growth 47.46% 13.82% 9.85% 4.81% 9.38% -3.09% -11.19%
Utilities 67.14% 18.68% 39.19% 17.98% 11.80% 0.94% -4.80%
European Growth 59.99% 16.96% 23.50% 11.13% 19.17% 2.50% 0.39%
Capital Growth 51.76% 14.92% 14.60% 7.05% 24.76% 3.78% -3.08%
Pacific Growth -25.11% -9.19% -12.74% -6.59% 70.31% 35.87% 4.59%
Global Div Growth 42.34% 12.49% 14.81% 7.15% 26.43% 8.15% -1.51%
Capital AppreciationN/A N/A -12.07% -6.23% 15.80% 7.11% 0.00%
Income Builder N/A N/A 5.87% 2.89% 10.34% 0.66% -7.27%
Equity Growth N/A N/A 39.17% 17.97% 39.14% 13.76% -0.98%
International MagnumN/A N/A 10.21% 4.98% 21.68% 10.97% 5.15%
Emerging Markets N/A N/A -21.32% -11.30% 47.20% 29.46% -5.88%
Emerging Growth 98.12% 25.60% 62.33% 27.41% 61.59% 26.49% 4.13%
Real Estate N/A N/A -13.18% -6.82% -1.10% -1.10% -8.44%
Competitive Edge N/A N/A N/A N/A 24.78% 5.66% -0.11%
S&P 500 Index N/A N/A N/A N/A 25.55% 3.72% -6.52%
Aggressive Equity N/A N/A N/A N/A N/A 0.00% 1.16%
Short Term Bond N/A N/A N/A N/A N/A 0.00% 0.99%
</TABLE>
Exhibit (99)(d)
Power of Attorney
With Respect to the Northbrook Life Insurance Company Filing on Form N-4 for
Northbrook Variable Annuity Account II
("Preferred Client Variable Annuity")
Know all men by these presents that Samuel H. Pilch., whose signature
appears below, constitutes and appoints Louis G. Lower, II, and Michael J.
Velotta, and each of them, his attorney-in-fact, with power of substitution, and
herein any and all capacities, to sign any registration statements and
amendments thereto for the Northbrook Life Insurance Company, Northbrook
Variable Annuity Account II and to file the same, with exhibits thereto and
other documents, in connection therewith, with the Securities and Exchange
Commission, hereby ratifying and confirming all that each of said
attorneys-in-fact, or his substitute or substitutes, may do or cause to be done
by virtue hereof.
Date: November 8, 1999
/s/ SAMUEL H. PILCH
- ----------------------------
Samuel H. Pilch
Controller
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