FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended: September 30, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission file number: 33-62193
33-91916
33-92842
333-00987
333-07275
333-50873
GLENBROOK LIFE AND ANNUITY COMPANY
(Exact name of registrant as specified in its charter)
ILLINOIS 35-1113325
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
3100 Sanders Road
Northbrook, Illinois 60062
(Address of principal executive offices)
(Zip Code)
847/402-5000
(Registrant's telephone number, including area code)
Not Applicable
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes../X/.. No
Indicate the number of shares of each of the issuer's classes of common
stock, as of September 30, 1998; there were 4,200 shares of common capital stock
outstanding, par value $500 per share all of which shares are held by Allstate
Life Insurance Company.
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements Page
Statements of Financial Position As Of
September 30, 1998 (Unaudited) and December 31, 1997 3
Statements of Operations
Three Months Ended September 30, 1998 and
September 30, 1997 (Unaudited)
Nine Months Ended September 30, 1998 and
September 30, 1997 (Unaudited) 4
Statements of Cash Flows
Nine Months Ended September 30, 1998 and
September 30, 1997 (Unaudited) 5
Notes to Financial Statements (Unaudited) 6
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 10
Item 3. Quantitative and Qualitative Disclosure about Market Risk* N/A
PART II - OTHER INFORMATION
Item 1. Legal Proceedings 14
Item 2. Changes in Securities and the Use of Proceeds* N/A
Item 3. Defaults Upon Senior Securities* N/A
Item 4. Submission of Matters to a Vote of Security Holders* N/A
Item 5. Other Information 14
Item 6. Exhibits and Reports on Form 8-K 14
Signature Page
*Omitted pursuant to General Instruction H(2) of Form 10-Q.
<PAGE>
GLENBROOK LIFE AND ANNUITY COMPANY
STATEMENTS OF FINANCIAL POSITION
<TABLE>
<CAPTION>
September 30, December 31,
($ in thousands) 1998 1997
------------------- --------------------
(Unaudited)
<S> <C> <C>
ASSETS
Investments
Fixed income securities, at fair value
(amortized cost $87,463 and $81,369) $ 96,046 $ 86,243
Short-term 2,593 4,231
------------ ------------
Total investments 98,639 90,474
Reinsurance recoverable from Allstate
Life Insurance Company 2,981,675 2,637,983
Cash 2,505 -
Other assets 2,908 2,549
Separate Accounts 801,444 620,535
------------ ------------
Total assets $ 3,887,171 $ 3,351,541
============ ============
LIABILITIES
Contractholder funds $ 2,981,675 $ 2,637,983
Income taxes payable 1,443 609
Deferred income taxes 3,286 1,772
Net payable to affiliates 5,902 2,698
Separate Accounts 801,444 620,535
------------ ------------
Total liabilities 3,793,750 3,263,597
------------ ------------
Commitments and Contingent Liabilities (Note 4)
SHAREHOLDER'S EQUITY
Common stock, $500 par value, 4,200 shares authorized,
issued, and outstanding 2,100 2,100
Additional capital paid-in 69,641 69,641
Retained income 16,101 13,035
Accumulated other comprehensive income:
Unrealized net capital gains 5,579 3,168
------------ ------------
Total accumulated other comprehensive income 5,579 3,168
------------ ------------
Total shareholder's equity 93,421 87,944
------------ ------------
Total liabilities and shareholder's equity $ 3,887,171 $ 3,351,541
============ ============
</TABLE>
See notes to financial statements.
-3-
<PAGE>
GLENBROOK LIFE AND ANNUITY COMPANY
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Three months ended Nine months ended
September 30, September 30,
------------------------------------ -----------------------------------
($ in thousands) 1998 1997 1998 1997
---------------- ---------------- --------------- ---------------
(Unaudited)
<S> <C> <C> <C> <C>
REVENUES
Net investment income $ 1,563 $ 1,304 $ 4,690 $ 3,838
Realized capital gains and losses - 2,121 - 3,305
---------- ---------- ---------- ----------
INCOME BEFORE INCOME TAX
EXPENSE 1,563 3,425 4,690 7,143
INCOME TAX EXPENSE 559 1,201 1,624 2,508
---------- ---------- ---------- ----------
NET INCOME $ 1,004 $ 2,224 $ 3,066 $ 4,635
========== ========== ========== ==========
</TABLE>
See notes to financial statements.
-4-
<PAGE>
GLENBROOK LIFE AND ANNUITY COMPANY
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Nine months ended
September 30,
-------------------------------------
($ in thousands) 1998 1997
---------------- -----------------
(Unaudited)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 3,066 $ 4,635
Adjustments to reconcile net income to net cash
provided by (used in) operating activities:
Realized capital gains and losses - (3,305)
Changes in deferred income taxes 211 5
Changes in other operating assets and liabilities 3,649 (7,707)
--------- ----------
Net cash provided by (used in) operating activities 6,926 (6,372)
--------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES
Fixed income securities
Proceeds from sales - 1,405
Investment collections 5,164 1,508
Investment purchases (11,265) (25,542)
Change in short-term investments, net 1,680 (1,055)
Participation in Separate Accounts - 10,056
--------- ----------
Net cash used in investing activities (4,421) (13,628)
--------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES
Capital contribution - 20,000
--------- ----------
Net cash provided by financing activities - 20,000
--------- ----------
NET INCREASE IN CASH 2,505 -
CASH AT BEGINNING OF PERIOD - -
--------- ----------
CASH AT END OF PERIOD $ 2,505 $ -
========= ==========
</TABLE>
See notes to financial statements.
-5-
<PAGE>
GLENBROOK LIFE AND ANNUITY COMPANY
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
1. Basis of Presentation
The accompanying financial statements include the accounts of
Glenbrook Life and Annuity Company (the "Company") a wholly owned
subsidiary of Allstate Life Insurance Company ("ALIC"), which is wholly
owned by Allstate Insurance Company, a wholly owned subsidiary of The
Allstate Corporation.
The financial statements and notes as of September 30, 1998 and for
the three month and nine month periods ended September 30, 1998 and 1997
are unaudited. The financial statements reflect all adjustments (consisting
only of normal recurring accruals) which are, in the opinion of management,
necessary for the fair presentation of the financial position, results of
operations and cash flows for the interim periods. These financial
statements and notes should be read in conjunction with the financial
statements and notes thereto included in the Glenbrook Life and Annuity
Company Annual Report on Form 10-K for 1997. The results of operations for
the interim period should not be considered indicative of results to be
expected for the full year.
Effective January 1, 1998, the Company adopted Statement of Financial
Accounting Standards No. 130, "Reporting Comprehensive Income."
Comprehensive income is a measurement of certain changes in shareholder's
equity that result from transactions and other economic events other than
transactions with shareholders. For the Company, these consist of changes
in unrealized gains and losses of the investment portfolio. These amounts,
presented as other comprehensive income, net of related taxes, are added to
net income which results in comprehensive income. The required disclosures
are presented in Note 3.
In March 1998, the Accounting Standards Executive Committee of the
American Institute of Certified Public Accountants issued Statement of
Position ("SOP") 98-1, "Accounting for the Costs of Computer Software
Developed or Obtained for Internal Use." The SOP provides guidance on
accounting for the costs of computer software developed or obtained for
internal use. Specifically, certain external, payroll and payroll related
costs should be capitalized during the application development stage of a
software development project and depreciated over the computer software's
useful life. The Company has adopted the SOP effective January 1, 1998.
-6-
<PAGE>
GLENBROOK LIFE AND ANNUITY COMPANY
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
In December 1997, the Accounting Standards Executive Committee of the
American Institute of Certified Public Accountants issued SOP 97-3,
"Accounting by Insurance and Other Enterprises for Insurance-Related
Assessments." The SOP is required to be adopted in 1999. The SOP provides
guidance concerning when to recognize a liability for insurance-related
assessments and how those liabilities should be measured. Specifically,
insurance-related assessments should be recognized as liabilities when all
of the following criteria have been met: 1) an assessment has been imposed
or it is probable that an assessment will be imposed, 2) the event
obligating an entity to pay an assessment has occurred and 3) the amount of
the assessment can be reasonably estimated. The requirements of this SOP
are not expected to have a material impact on the results of operations,
liquidity or financial position of the Company. The Company expects to
adopt the SOP as of January 1, 1999.
2. Reinsurance
The Company and ALIC entered into a reinsurance agreement effective
June 5, 1992. All business issued subsequent to that date is ceded to ALIC.
Life insurance in force prior to that date is ceded to non-affiliated
reinsurers. Contract charges, credited interest, policy benefits and
certain expenses are ceded to ALIC and reflected net of such cessions in
the statements of operations. The amounts shown in the Company's statements
of operations relate to the investment of those assets of the Company that
are not transferred to ALIC under the reinsurance agreement. Reinsurance
recoverable and contractholder funds are reported separately in the
statements of financial position. The Company continues to have primary
liability as the direct insurer for risks reinsured.
Investment income earned on the assets which support contractholder
funds is not included in the Company's financial statements as those assets
are owned and managed by ALIC under the terms of reinsurance agreements.
The following amounts were ceded to ALIC under the reinsurance agreements.
<TABLE>
<CAPTION>
($ in thousands) Three months ended Nine months ended
September 30, September 30,
------------------------------- --------------------------------
1998 1997 1998 1997
------------- -------------- ------------- -------------
<S> <C> <C> <C> <C>
Contract charges $ 5,010 $ 3,072 $ 14,198 $ 7,692
Credited interest, policy benefits
and other expenses 62,025 44,967 156,627 124,030
</TABLE>
-7-
<PAGE>
GLENBROOK LIFE AND ANNUITY COMPANY
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
3. Comprehensive Income
The components of other comprehensive income on a pretax and after-tax
basis are as follows:
<TABLE>
<CAPTION>
Three months ended September 30,
---------------------------------------------------------------------------
($ in thousands) 1998 1997
---------------------------------- --------------------------------------
Income Income
tax After- tax After-
Pretax effect tax Pretax effect tax
------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
Unrealized capital gains and losses:
Unrealized holding gains arising
during the period $3,115 $(1,090) $2,025 $ 1,912 $ (669) $ 1,243
Less: reclassification adjust-
ment for realized net
capital gains included in
net income - - - 2,121 (743) 1,378
------ ------- ------ ------- ------ -------
Other comprehensive income $3,115 $(1,090) $2,025 $ (209) $ 74 $ (135)
====== ======= ------ ======= ====== -------
Net income 1,004 2,224
------ -------
Comprehensive income $3,029 $ 2,089
====== =======
Nine months ended September 30,
---------------------------------------------------------------------------
($ in thousands) 1998 1997
---------------------------------- --------------------------------------
Income Income
tax After- tax After-
Pretax effect tax Pretax effect tax
------ ------ ------ ------ ------ ------
Unrealized capital gains and losses:
Unrealized holding gains arising
during the period $3,710 $(1,299) $ 2,411 $2,741 $ (959) $1,782
Less: reclassification adjust-
ment for realized net
capital gains included in
net income - - - 3,305 (1,157) 2,148
------ ------- ------- ------ ------ ------
Other comprehensive income $3,710 $(1,299) $ 2,411 $ (564) $ 198 $ (366)
====== ======= ------- ====== ====== ------
Net income 3,066 4,635
------- ------
Comprehensive income $ 5,477 $4,269
======= ======
</TABLE>
-8-
<PAGE>
GLENBROOK LIFE AND ANNUITY COMPANY
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
4. Regulation and Legal Proceedings
The Company's business is subject to the effects of a changing social,
economic and regulatory environment. Public and regulatory initiatives have
varied and have included employee benefit regulation, removal of barriers
preventing banks from engaging in the securities and insurance business,
tax law changes affecting the taxation of insurance companies, the tax
treatment of insurance products and its impact on the relative desirability
of various personal investment vehicles, and proposed legislation to
prohibit the use of gender in determining insurance rates and benefits. The
ultimate changes and eventual effects, if any, of these initiatives are
uncertain.
From time to time the Company is involved in pending and threatened
litigation in the normal course of its business in which claims for
monetary damages are asserted. In the opinion of management, the ultimate
liability, if any, arising from such pending or threatened litigation is
not expected to have a material effect on the results of operations,
liquidity or financial position of the Company.
-9-
<PAGE>
Glenbrook Life and Annuity Company
Management's Discussion and Analysis
of Financial Condition and Results of Operations
The following discussion highlights significant factors influencing results
of operations and changes in financial position of Glenbrook Life and Annuity
Company (the "Company"). It should be read in conjunction with the financial
statements and notes thereto found under Part I. Item 1 contained herein and the
discussion, analysis, financial statements and notes thereto found under Part
II. Item 7 and Item 8 of the Glenbrook Life and Annuity Company Annual Report on
Form 10-K for 1997.
The Company, a wholly owned subsidiary of Allstate Life Insurance Company
("ALIC"), which is wholly owned by Allstate Insurance Company ("AIC"), a wholly
owned subsidiary of The Allstate Corporation (the "Corporation"), markets life
insurance and annuity products through banks and broker-dealers. Life insurance
policies include both interest-sensitive and variable life insurance products.
Annuity contracts include deferred annuities, such as variable annuities and
fixed rate flexible premium annuities.
Flexible premium deferred variable annuity contracts and variable life
policies are legally segregated and reflected as Separate Account assets and
liabilities and are carried at fair value in the statements of financial
position. Certain of the Separate Account investment portfolios were initially
funded with a $10.0 million seed money contribution from the Company in 1995.
During 1997, the Company liquidated its funding in the Separate Account
investment portfolios. Investment income and realized gains and losses of the
Separate Accounts, other than the portion which related to the Company's
participation, accrue directly to the contractholders (net of fees) and,
therefore, are not included in the Company's statements of operations.
Results of Operations
($ in thousands)
<TABLE>
<CAPTION>
Three months ended Nine months ended
September 30, September 30,
------------------------------------ ------------------------------------
1998 1997 1998 1997
---------------- ---------------- ---------------- ----------------
<S> <C> <C> <C> <C>
Net investment income $ 1,563 $ 1,304 $ 4,690 $ 3,838
======= ======= ======= =======
Realized capital gains and
losses, after-tax $ - $ 1,379 $ - $ 2,148
======= ======= ======= =======
Net income $ 1,004 $ 2,224 $ 3,066 $ 4,635
======= ======= ======= =======
Investments $98,639 $75,450 $98,639 $75,450
======= ======= ======= =======
</TABLE>
The Company and ALIC entered into a reinsurance agreement effective June 5,
1992. All business issued subsequent to that date is ceded to ALIC. Life
insurance in force prior to that date is ceded to non-affiliated reinsurers. The
Company's results of operations include only investment income and realized
capital gains and losses earned on the assets of the Company that are not
transferred to ALIC under the reinsurance agreement.
Net income for the three month and nine month periods ended September 30,
1998 decreased $1.2 million and $1.6 million, respectively, compared with the
same periods in 1997. Increased net investment income was more than offset by
decreased realized capital gains in both periods. Realized capital gains in 1997
were associated primarily with the withdrawal of the Company's seed money
investment in Separate Account portfolios.
-10-
<PAGE>
Glenbrook Life and Annuity Company
Management's Discussion and Analysis
of Financial Condition and Results of Operations
(Continued)
Pretax net investment income increased 19.9% and 22.2% in the third quarter
and the first nine months of 1998, respectively, from the comparable 1997
periods. Additional investment income earned on higher investment balances was
partially offset by lower portfolio yields.
Financial Position
($ in thousands)
<TABLE>
<CAPTION>
September 30, December 31,
1998 1997
---------------- -----------------
<S> <C> <C>
Fixed income securities (1) $ 96,046 $ 86,243
Short-term investments 2,593 4,231
----------- -----------
Total investments $ 98,639 $ 90,474
=========== ===========
Reinsurance recoverable from ALIC $ 2,981,675 $ 2,637,983
=========== ===========
Separate Account assets and liabilities $ 801,444 $ 620,535
=========== ===========
Contractholder funds $ 2,981,675 $ 2,637,983
=========== ===========
(1) Fixed income securities are carried at fair value. Amortized
cost for these securities was $87,463 and $81,369 at September
30, 1998 and December 31, 1997, respectively.
</TABLE>
The Company's fixed income securities portfolio consists of publicly traded
corporate bonds, mortgage-backed securities, U.S. government bonds and municipal
bonds. The Company generally holds its fixed income securities for the long
term, but has classified all of these securities as available for sale to allow
maximum flexibility in portfolio management.
Total investments increased to $98.6 million at September 30, 1998 from
$90.5 million at December 31, 1997. The increase in investments is primarily due
to amounts invested from positive cash flows generated from operations and an
increase in unrealized net capital gains on the fixed income securities
portfolio. At September 30, 1998, unrealized net capital gains on fixed income
securities were $8.6 million compared to $4.9 million at December 31, 1997.
The Company's fixed income securities portfolio is rated investment grade,
with a National Association of Insurance Commissioners rating of 1 or 2 or a
Moody's rating of Aaa, Aa, A, or Baa, or a comparable Company internal rating.
The carrying value of the Company's short-term investment portfolio was
$2.6 million and $4.2 million at September 30, 1998 and December 31, 1997,
respectively. The Company generally invests available cash balances primarily in
taxable short-term securities having a final maturity date or redemption date of
one year or less.
During 1998, contractholder funds and amounts recoverable from ALIC under
the reinsurance agreement increased by $343.7 million. The increases resulted
from sales of the Company's fixed annuities and interest credited to
contractholders, partially offset by surrenders, withdrawals and benefits paid.
Reinsurance recoverable from ALIC relates to contract benefit obligations ceded
to ALIC.
-11-
<PAGE>
Glenbrook Life and Annuity Company
Management's Discussion and Analysis
of Financial Condition and Results of Operations
(Continued)
Separate Account assets and liabilities increased by $180.9 million
compared with December 31, 1997. The increases were primarily attributable to
sales of variable annuity contracts partially offset by variable annuity
surrenders and withdrawals, and a decline in the investment performance of the
Separate Account investment portfolios.
Liquidity and Capital Resources
Under the terms of reinsurance agreements, premiums and deposits on life
insurance policies and annuity contracts, excluding those relating to Separate
Accounts, are transferred to ALIC, which maintains the investment portfolios
supporting the Company's products. The Company continues to have primary
liability as the direct insurer for risks reinsured.
Year 2000
The Company is heavily dependent upon complex computer systems for all
phases of its operations, including customer service, policy and contract
administration, investment processing and other enterprise systems. Since many
of the Company's older computer software programs recognize only the last two
digits of the year in any date, some software may fail to operate properly in or
after the year 1999, if the software is not reprogrammed, remediated, or
replaced ("Year 2000"). Also, many systems and equipment that are not typically
thought of as computer-related (referred to as "non-IT") contain imbedded
hardware or software that may have a Year 2000 sensitive component. The Company
believes that many of its counterparties and suppliers also have Year 2000
issues and non-IT issues which could affect the Company.
In 1995, the Corporation commenced a plan consisting of four phases which
are intended to mitigate and/or prevent the adverse affects of the Year 2000
issues on its systems: (1) assessment and analysis of affected systems and
equipment; (2) remediation and compliance of systems and equipment through
strategies that include the enhancement of new and existing systems, upgrades to
operating systems already covered by maintenance agreements and modifications to
existing systems to make them Year 2000 compliant; (3) testing of systems and
equipment using clock-forward testing for both current and future dates and for
dates which trigger specific processing; and (4) contingency planning which will
address possible adverse scenarios and the potential financial impact to the
Company's results of operations, liquidity or financial position.
The Corporation believes that the first step of this plan, assessment, is
complete, and is currently in the remediation phase for all systems and
equipment. The Corporation is relying on other remediation techniques for its
midrange and personal computer environments, and certain mainframe applications.
Management believes the majority of the Corporation's computer systems and
equipment will be remediated by the end of 1998, with the investment processing
systems and certain midrange computers to be remediated by the middle of 1999.
The third phase of the plan which includes clock-forward testing of the
Corporation's systems and non-IT, is scheduled to be largely complete by the end
of 1998. The Corporation is currently in the process of identifying key
processes and developing contingency plans in the event that the systems and
equipment supporting these processes are not Year 2000 compliant at the end of
1999. Management believes these contingency plans should be completed by
mid-1999. Until these plans are complete, management is unable to determine an
estimate of the most reasonably possible worst case scenario due to issues
relating to the Year 2000.
-12-
<PAGE>
Glenbrook Life and Annuity Company
Management's Discussion and Analysis
of Financial Condition and Results of Operations
(Continued)
In addition, the Company is actively working with its major external
counterparties and suppliers to assess their compliance efforts and the
Company's exposure to both their Year 2000 issues and non-IT issues. The Company
is currently soliciting its key external counterparties and suppliers to certify
that they are compliant with the Year 2000 issues or are taking actions they
believe will adequately prepare them for the Year 2000. The Company will
continue its efforts to receive responses on Year 2000 compliance from these
parties. If key vendors are unable to meet the Year 2000 requirement, the
Company intends to prepare contingency plans that will allow the Company to
continue to sell to and service its customers. Management believes these
contingency plans should be completed by mid-1999. The Company may also be
exposed to the risk that the issuers of investments will be adversely impacted
by Year 2000 issues.
The Company presently believes that it will resolve the Year 2000 issue in
a timely manner, and the costs incurred to achieve Year 2000 compliance of
Company systems are not expected to be material to the Company's results of
operations, liquidity or financial position. Year 2000 costs are expensed as
incurred.
Pending Accounting Standards
In December 1997, the Accounting Standards Executive Committee of the
American Institute of Certified Public Accountants ("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 requirements of this SOP are not
expected to have a material impact on the results of operations, liquidity or
financial position of the Company. The Company expects to adopt the SOP as of
January 1, 1999.
Forward-Looking Statements
The statements contained in this Management's Discussion and Analysis that
are not historical information are forward-looking statements that are based on
management's estimates, assumptions and projections. The Private Securities
Litigation Reform Act of 1995 provides a safe harbor under The Securities Act of
1933 and The Securities Exchange Act of 1934 for forward-looking statements.
-13-
<PAGE>
PART II - Other Information
Item 1. Legal Proceedings
The Company and its Board of Directors know of no material legal proceedings
pending to which the Company is a party or which would materially affect the
Company. The Company is involved in pending and threatened litigation in the
normal course of its business in which claims for monetary damages are asserted.
Management, after consultation with legal counsel, does not anticipate the
ultimate liability arising from such pending or threatened litigation to have a
material effect on the financial condition of the Company.
Item 5. Other Information
Not applicable.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits required by Item 601 of Regulation S-K
(2) None
(3)(i) Articles of Incorporation*
(ii) By-laws*
(4) Glenbrook Life and Annuity Company Flexible Premium
Deferred Variable Annuity Contract and Application**
(10) Reinsurance Agreement between Glenbrook Life
and Annuity Company and Allstate Life
Insurance Company*
(11) None
(15) None
(18) None
(19) None
(22) None
(23)(a) Consent of Independent Public Accountants***
(b) Consent of Attorneys****
(24) None
(27) Financial Data Schedule
(99) None
(b) Reports on 8-K
No reports on Form 8-K were filed during the third quarter of 1998.
* Previously filed in Form S-1 Registration Statement No.333-07275 dated June
28, 1996 and incorporated by reference.
** Previously filed in Form S-1 Registration Statement No. 33-91916
dated May 4, 1995 and incorporated by reference. Previously filed in Form
S-1 Registration Statement No. 33-92842 dated May 30, 1995 and incorporated
by reference. Previously filed in Form N-4 Registration Statement No. 33-
62203 dated November 21, 1995 and incorporated by reference. Previously
filed in Form N-4 Registration Statement No.333-00999 dated August 23, 1996
and incorporated by reference.
*** Previously filed and incorporated by reference in the following Form S-1
registration statements: 33-91916 filed April 1, 1998; 33-62193 filed April 1,
1998; 33-92842 filed April 1, 1998; 333-00987 filed April 1, 1998; 333-07275
filed April 1, 1998; and 333-50873 filed April 24, 1998.
**** Previously filed and incorporated by reference in the following Form S-1
registration statements: 33-91916 filed April 1, 1998; 33-62193 filed April 1,
1998; 33-92842 filed April 1, 1998; 333-00987 filed April 1, 1998; 333-07275
filed April 1, 1998; and 333-50873 filed April 24, 1998.
-14-
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Glenbrook Life and Annuity Company
(Registrant)
DATE November 13, 1998 /s/ LOUIS G. LOWER, II
---------------------- ----------------------
LOUIS G. LOWER, II
CHAIRMAN OF THE BOARD OF DIRECTORS
and CHIEF EXECUTIVE OFFICER
(Principal Executive Officer)
DATE November 13, 1998 /s/KEITH A. HAUSCHILDT
---------------------- ----------------------
KEITH A. HAUSCHILDT
ASSISTANT VICE PRESIDENT AND CONTROLLER
(Chief Accounting Officer)
<TABLE> <S> <C>
<ARTICLE> 7
<LEGEND> THIS SCHEUDLE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
STATEMENTS OF FINANCIAL POSITION AT SEPTEMBER 30, 1998; STATEMENTS OF
OPERATIONS THREE MONTHS ENDED SEPTEMBER 30, 1998 AND SEPTEMBER 30, 1997 AND
NINE MONTHS ENDED SEPTEMBER 30, 1998 AND SEPTEMBER 30, 1997; AND STATEMENTS
OF CASH FLOWS NINE MONTHS ENDED SEPTEMBER 30, 1998.
</LEGEND>
<CIK> 0000945094
<NAME> GLENBROOK LIFE & ANNUITY COMPANY
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> SEP-30-1998
<EXCHANGE-RATE> 1
<DEBT-HELD-FOR-SALE> 96,046
<DEBT-CARRYING-VALUE> 0
<DEBT-MARKET-VALUE> 0
<EQUITIES> 0
<MORTGAGE> 0
<REAL-ESTATE> 0
<TOTAL-INVEST> 98,639
<CASH> 2,505
<RECOVER-REINSURE> 2,981,675
<DEFERRED-ACQUISITION> 0
<TOTAL-ASSETS> 3,891,900
<POLICY-LOSSES> 0
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<POLICY-OTHER> 0
<POLICY-HOLDER-FUNDS> 2,981,675
<NOTES-PAYABLE> 0
0
0
<COMMON> 2,100
<OTHER-SE> 91,321
<TOTAL-LIABILITY-AND-EQUITY> 3,891,900
0
<INVESTMENT-INCOME> 4,690
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<UNDERWRITING-OTHER> 0
<INCOME-PRETAX> 4,690
<INCOME-TAX> 1,624
<INCOME-CONTINUING> 3,066
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,066
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
<RESERVE-OPEN> 0
<PROVISION-CURRENT> 0
<PROVISION-PRIOR> 0
<PAYMENTS-CURRENT> 0
<PAYMENTS-PRIOR> 0
<RESERVE-CLOSE> 0
<CUMULATIVE-DEFICIENCY> 0
</TABLE>
