FORM 10-Q
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
The registrant meets the conditions set forth in General Instruction H(1)(a) and
(b) of Form 10-Q and is therefore filing this Form with the reduced disclosure
format.
[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended: March 31, 1999
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
33-91914
33-62203
333-00987
333-07275
333-50873
333-60337
333-50879
333-00999
333-02581
333-28227
333-25045
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)
847/402-2400
(Registrant's telephone number, including area code)
Not Applicable
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes../X/.. No
Indicate the number of shares of each of the issuer's classes of common
stock, as of March 31, 1998; there were 4,200 shares of common capital stock
outstanding, par value $500 per share all of which shares are held by Allstate
Life Insurance Company.
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
Statements of Financial Position
March 31, 1999(Unaudited) and December 31, 1998.................. 3
Statements of Operations
Three Months Ended March 31, 1999 and
March 31, 1998 (Unaudited)....................................... 4
Statements of Cash Flows
Three Months Ended March 31, 1999 and
March 31, 1998 (Unaudited)................................. 5
Notes to Financial Statements.................................... 6
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS..................... 9
Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT
MARKET RISK*..................................................N/A
PART II - OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS..................................................14
Item 2. CHANGES IN SECURITIES AND USE OF PROCEEDS*........................N/A
Item 3. DEFAULTS UPON SENIOR SECURITIES*..................................N/A
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS*..............N/A
Item 5. OTHER INFORMATION..................................................14
Item 6. EXHIBITS AND REPORTS ON FORM 8-K...................................14
SIGNATURE PAGE...............................................................15
*Omitted pursuant to General Instruction H(2) of Form 10-Q.
-2-
<PAGE>
GLENBROOK LIFE AND ANNUITY COMPANY
STATEMENTS OF FINANCIAL POSITION
MARCH 31, DECEMBER 31,
1999 1998
----------- ------------
($ in thousands) (UNAUDITED)
ASSETS
Investments
Fixed income securities at fair value
(amortized cost $91,508 and $87,415) $ 96,277 $ 94,313
Short-term 1,923 4,663
---------- ----------
Total investments 98,200 98,976
Reinsurance recoverable from
Allstate Life Insurance Company 3,305,641 3,113,278
Other assets 2,865 2,590
Separate Accounts 1,070,156 993,622
---------- ----------
TOTAL ASSETS $4,476,862 $4,208,466
========== ==========
LIABILITIES
Contractholder funds 3,305,641 3,113,278
Current income taxes payable 2,729 2,181
Deferred income taxes 1,758 2,499
Payable to affiliates, net 3,632 3,583
Separate Accounts 1,070,156 993,622
---------- ----------
TOTAL LIABILITIES 4,383,916 4,115,163
---------- ----------
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 18,106 17,079
Accumulated other comprehensive income:
Unrealized net capital gains 3,099 4,483
---------- ----------
TOTAL ACCUMULATED OTHER COMPREHENSIVE INCOME 3,099 4,483
---------- ----------
TOTAL SHAREHOLDER'S EQUITY 92,946 93,303
---------- ----------
TOTAL LIABILITIES AND SHAREHOLDER'S EQUITY $4,476,862 $4,208,466
========== ==========
See notes to financial statements.
3
<PAGE>
GLENBROOK LIFE AND ANNUITY COMPANY
STATEMENTS OF OPERATIONS
THREE MONTHS ENDED
MARCH 31,
-----------------------
($ in thousands) 1999 1998
---------- ----------
(UNAUDITED)
REVENUES
Net investment income 1,578 1,586
---------- ----------
INCOME BEFORE INCOME TAX EXPENSE 1,578 1,586
Income tax expense 551 523
---------- ----------
NET INCOME $ 1,027 $ 1,063
========== ==========
See notes to financial statements.
4
<PAGE>
GLENBROOK LIFE AND ANNUITY COMPANY
STATEMENTS OF CASH FLOWS
THREE MONTHS ENDED
MARCH 31,
-------- --------
($ in thousands) 1999 1998
-------- --------
(UNAUDITED)
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 1,027 $ 1,063
Adjustments to reconcile net income to net cash
provided by operating activities
Changes in:
Income taxes payable 552 (163)
Other operating assets and liabilities (253) 423
-------- --------
Net cash provided by operating activities 1,326 1,323
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES
Fixed income securities
Investment collections 1,891 2,856
Investment purchases (5,958) (5,659)
Change in short-term investments, net 2,741 2,083
-------- --------
Net cash used in investing activities (1,326) (720)
-------- --------
NET INCREASE IN CASH -- 603
CASH AT THE BEGINNING OF PERIOD -- --
-------- --------
CASH AT END OF PERIOD $ -- $ 603
======== ========
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 ("AIC"), a wholly owned subsidiary of The Allstate
Corporation (the "Corporation"). These financial statements have been
prepared in conformity with generally accepted accounting principles.
The financial statements and notes as of March 31, 1999 and for the three
month periods ended March 31, 1999 and 1998 are unaudited. The interim
financial statements reflect all adjustments (consisting only of normal
recurring accruals) which are, in the opinion of management, necessary for
the fair presentation of the financial position, results of operations and
cash flows for the interim periods. 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 10K for 1998. The results of operations for the interim periods should
not be considered indicative of results to be expected for the full year.
Effective January 1, 1999, the Company adopted Statement of Position
("SOP") 97-3, "Accounting by Insurance and Other Enterprises for
Insurance-Related Assessments." The SOP provides guidance concerning when
to recognize a liability for insurance-related assessments and how those
liabilities should be measured. Specifically, insurance-related assessments
should be recognized as liabilities when all of the following criteria have
been met: 1) an assessment has been imposed or it is probable that an
assessment will be imposed, 2) the event obligating an entity to pay an
assessment has occurred and 3) the amount of the assessment can be
reasonably estimated. The adoption of this statement was immaterial to the
Company's results of operations and financial position.
To conform with the 1999 presentation, certain amounts in the prior years'
financial statements and notes have been reclassified.
2. 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. The amounts shown in the Company's statements of operations
relate to the investment of those assets of the Company that are not
transferred under reinsurance agreements. Reinsurance recoverable and the
related contractholder funds are reported separately in the statements of
financial position. The Company continues to have primary liability as the
direct insurer for risks reinsured.
6
<PAGE>
GLENBROOK LIFE AND ANNUITY COMPANY
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED) (cont'd)
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 under the terms of reinsurance agreements. The following
amounts were ceded to ALIC under reinsurance agreements.
THREE MONTHS ENDED
MARCH 31,
---------------------
($ in thousands) 1999 1998
-------- --------
Contract charges $ 5,670 $ 4,107
Credited interest, policy benefits and expenses 56,245 46,283
3. COMPREHENSIVE INCOME
The components of other comprehensive income on a pretax and after-tax
basis for the three months ended March 31, are as follows:
<TABLE>
<CAPTION>
($ in thousands) 1999 1998
----------------------------- ------------------------------
AFTER- AFTER-
PRETAX TAX TAX PRETAX TAX TAX
------ --- --- ------ --- ---
<S> <C> <C> <C> <C> <C> <C>
Unrealized capital gains
and losses:
------------------------------
Unrealized holding losses
arising during the period $(2,129) $ 745 $(1,384) $ (158) $ 55 $ (103)
Less: reclassification adjust-
ment for realized net
capital gains included in
net income -- -- -- -- -- --
------- ------- ------- ------- ------- -------
Unrealized net capital losses (2,129) 745 (1,384) (158) 55 (103)
------- ------- ------- ------- ------- -------
Other comprehensive loss $(2,129) $ 745 (1,384) $ (158) $ 55 (103)
======= ======= ------- ======= ======= -------
Net income 1,027 1,063
------- -------
Comprehensive (loss) income $ (357) $ 960
======= =======
</TABLE>
7
<PAGE>
GLENBROOK LIFE AND ANNUITY COMPANY
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)(cont'd)
4. REGULATION AND LEGAL PROCEEDINGS
The Company is subject to the effects of a changing social, economic and
regulatory environment. Public and regulatory initiatives have varied and
have included efforts to adversely influence and restrict premium rates,
restrict the Company's ability to cancel policies, impose underwriting
standards and expand overall regulation. The ultimate changes and
eventual effects, if any, of these initiatives are uncertain.
Various other legal and regulatory actions are currently pending that
involve the Company and specific aspects of its conduct of business. In
the opinion of management, the ultimate liability, if any, in one or more
of these actions in excess of amounts currently reserved is not expected
to have a material effect on the results of operations, liquidity or
financial position of the Company.
8
<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 related notes thereto found under items 7 and 8 of Part
II of the Glenbrook Life and Annuity Company Annual Report on Form 10-K for the
year ended December 31, 1998.
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
savings products and life insurance products through banks, direct marketing and
broker-dealers. Savings products consist of fixed annuity products including
indexed and market value adjusted annuities, as well as variable annuities. Life
insurance includes universal life and variable life products. The Company
re-domesticated its operations from Illinois to Arizona in 1998. The Company has
identified itself as a single segment entity.
The assets and liabilities related to flexible premium deferred variable
annuity contracts and variable life policies are legally segregated and
reflected as Separate Account assets and liabilities and are carried at fair
value in the statements of financial position. Investment income and realized
gains and losses of the Separate Accounts accrue directly to the contractholders
(net of fees) and, therefore, are not included in the Company's statements of
operations.
RESULTS OF OPERATIONS
($ in thousands)
THREE MONTHS ENDED
MARCH 31,
1999 1998
------- -------
Net investment income $ 1,578 $ 1,586
======= =======
Net income $ 1,027 $ 1,063
======= =======
Investments $98,200 $91,036
======= =======
The Company has reinsurance agreements under which substantially all
contract and policy related transactions are transferred to ALIC. The Company's
results of operations include only net investment income and realized capital
gains and losses earned on the assets of the Company that are not transferred
under the reinsurance agreements.
Net income was $1.0 million for the first three months of 1999 compared
to $1.1 million for the same period last year. Pretax net investment income
declined slightly due to lower portfolio yields and higher investment expenses.
Lower investment yields are due, in part, to the investment of proceeds from
calls and maturities and the investment of positive cash flows from operations
in securities yielding less than the average portfolio rate. In relatively low
interest rate environments, funds from maturing investments may be reinvested at
interest rates lower than those which prevailed when the funds were previously
invested, resulting in lower investment yields.
9
<PAGE>
GLENBROOK LIFE AND ANNUITY COMPANY
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(cont'd)
FINANCIAL POSITION
($ in thousands)
MARCH 31, DECEMBER 31,
1999 1998
------------- -------------
Fixed income securities (1) $ 96,277 $ 94,313
Short-term investments 1,923 4,663
------------- -------------
Total investments $ 98,200 $ 98,976
============= =============
Reinsurance recoverable from ALIC $ 3,305,641 $ 3,113,278
============= =============
Separate Account assets and liabilities $ 1,070,156 $ 993,622
============= =============
Contractholder funds $ 3,305,641 $ 3,113,278
============= =============
(1) Fixed income securities are carried at fair value. Amortized cost for these
securities was $91,508 and $87,415 at March 31, 1999 and December 31, 1998,
respectively.
Total investments were $98.2 million at March 31, 1999 compared to $99.0
million at December 31, 1998. Positive cash flows generated from operations were
more than offset by a decrease in unrealized net capital gains on fixed income
securities. At March 31, 1999, unrealized net capital gains on fixed income
securities were $4.8 million compared to $6.9 million at December 31, 1998.
At March 31, 1999, all of the Company's fixed income securities portfolio
is rated investment grade, which is defined by the Company as a security having
a National Association of Insurance Commissioners ("NAIC") rating of 1 or 2, a
Moody's rating of Aaa, Aa, A or Baa, or a comparable Company internal rating.
During the three months ended March 31, 1999, contractholder funds and
reinsurance recoverable from ALIC increased by $192.4 million. The increase
resulted from sales of the Company's fixed annuity contracts 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.
Separate Account assets and liabilities increased $76.5 million to $1.1
billion at March 31, 1999. The increases were primarily attributable to sales of
variable annuity contracts and the favorable investment performance of Separate
Account investment portfolios, partially offset by surrenders and withdrawals.
10
<PAGE>
GLENBROOK LIFE AND ANNUITY COMPANY
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(cont'd)
LIQUIDITY AND CAPITAL RESOURCES
Under the terms of reinsurance agreements, substantially all premiums and
deposits, excluding those relating to Separate Accounts, are transferred to
ALIC, which maintains the investment portfolio supporting the Company's
products. Substantially all payments of policyholder claims, benefits, contract
maturities, contract surrenders and withdrawals and certain operating costs are
also reimbursed by ALIC under the terms of the reinsurance agreements. The
Company continues to have primary liability as a direct insurer for risks
reinsured. The Company's ability to meet liquidity demands is dependant on
ALIC's ability to meet those demands. ALIC's claims-paying ability was rated
Aa2, AA+ and A+ by Moody's, Standard and Poor's and A.M. Best, respectively, at
March 31, 1999.
The primary sources for the remainder of the Company's funds are
collection of principal and interest from the investment portfolio and capital
contributions from ALIC. The primary uses for the remainder of the Company's
funds are to purchase investments and pay costs associated with the maintenance
of the Company's investment portfolio.
YEAR 2000
The Company is dependent upon certain services provided for it by the
Corporation including computer-related systems, and systems and equipment that
are not typically thought of as computer-related (referred to as "non-IT"). For
this reason, the Company is reliant upon the Corporation for the establishment
and maintenance of its computer-related systems and non-IT.
The Corporation is heavily dependent upon complex computer systems for all
phases of its operations, including customer service, insurance processing,
underwriting, loss reserving, investments and other enterprise systems. Since
many of the Corporation'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
embedded hardware or software that may have a Year 2000 sensitive component. The
Corporation believes that many of its counterparties and suppliers also have
Year 2000 issues and non-IT issues which could affect the Corporation.
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) inventory and assessment of affected systems and
equipment, 2) remediation and compliance of systems and equipment through
strategies that include the replacement or enhancement of 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 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
Corporation's results of operations, liquidity or financial position.
The Corporation believes that the first three steps of this plan,
assessment, remediation and testing, including clock-forward testing which is
being performed on the Corporation's systems and non-IT, are mostly complete for
the Corporation's critical systems. The Corporation is relying on remediation
techniques for its midrange and personal computer environments, and certain
mainframe applications.
11
<PAGE>
GLENBROOK LIFE AND ANNUITY COMPANY
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(cont'd)
Certain other processing systems are planned to be remediated by the middle
of 1999, and the implementation and rollout of the remediated personal computer
environment will continue through the third quarter of 1999. Some systems and
non-IT related to discontinued or non-critical functions of the Corporation are
planned to be abandoned by the end of 1999.
The Corporation is currently in the process of developing contingency plans
in the event that the systems supporting key processes are not Year 2000
compliant in or after the year 1999. Management believes these contingency plans
should be completed by mid-1999 with testing of these plans conducted throughout
the second half of 1999. Management has also begun to identify and model the
impacts of the most reasonably likely worst case scenarios. Until these plans
are complete, management is unable to determine an estimate of the most
reasonably likely worst case scenario due to issues relating to the Year 2000.
In addition, the Corporation is actively working with its major external
counterparties and suppliers to assess their compliance efforts and the
Corporation's exposure to both their Year 2000 issues and non-IT issues. This
assessment has included the solicitation of external counterparties and
suppliers, evaluating responses received and testing third party interfaces and
interactions to determine compliance. Currently the Corporation has solicited
and has received responses from the majority of its counterparties and
suppliers. These responses generally state that they believe they will be Year
2000 compliant and that no transactions will be affected. However, certain
vendors are also in ongoing assessment and testing of their products whereby
they are currently unable to identify all potential problems in certain products
which are used by the Corporation. The Corporation believes that these vendors
will make no statements regarding their Year 2000 readiness other than to
publish declarations addressing specific compliance issues identified with their
products. The Corporation has begun to work with these key vendors and is
developing procedures in order to stay aware of any compliance issues
encountered by these vendors. The Corporation has also decided to test certain
interfaces and interactions to gain additional assurance on third party
compliance. If key vendors are unable to meet the Year 2000 requirement, the
Corporation is preparing contingency plans that will allow the Corporation to
continue to sell its products and to service its customers. Management believes
these contingency plans should be completed by mid-1999. The Corporation
currently does not have sufficient information to determine whether or not all
of its external counterparties and suppliers will be Year 2000 ready.
The Corporation may be exposed to the risk that the issuers of investments
in its portfolio will be adversely impacted by Year 2000 issues. The Corporation
assesses the impact which Year 2000 issues have on the Corporation's investments
as part of due diligence for proposed new investments and in its ongoing review
of all current portfolio holdings. Any recommended actions with respect to
individual investments are determined by taking into account the potential
impact of Year 2000 on the issuer. The Corporation currently does not have
sufficient information to determine the impacts of such exposures on their
results of operations, liquidity or financial position.
The Corporation presently believes that it will resolve the Year 2000 issue
in a timely manner. Year 2000 costs are expensed as incurred, therefore, the
majority of the expenses related to this project have been incurred as of March
31, 1999. The Corporation estimates that approximately $125 million in costs
will be incurred between the years 1995 and 2000. These amounts include costs
directly related to fixing Year 2000 issues, such as modifying software and
hiring Year 2000 solution providers, as well as costs incurred to replace
certain non-compliant systems which would not have been otherwise replaced. A
portion of these costs will be incurred by the Company on a pro rata basis of
usage of the computer-related systems and non-IT, as compared to the usage of
all entities which share these services with the Corporation. These amounts are
not expected to be material to the results of operations of the Company.
12
<PAGE>
GLENBROOK LIFE AND ANNUITY COMPANY
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(cont'd)
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) Amended and Restated Articles of Incorporation and Articles of
Redomestication of Glenbrook Life and Annuity Company (Incorporated herein
by reference to the Company's Form 10-K Annual Report for the year ended
December 31, 1998)
(3)(ii) Amended and Restated By-laws of Glenbrook Life and Annuity Company
(Incorporated herein by reference to the Company's Form 10-K Annual Report
for the year ended December 31, 1998)
(4) None
(10)(a) Reinsurance Agreement between Glenbrook Life and Annuity Company and
Allstate Life Insurance Company effective June 5, 1992 along with Amendment
No. 1 thereto, dated June 8, 1995 and Amendment No. 2 thereto, dated
November 3, 1995 (Incorporated herein by reference to the Company's Initial
filing of Form S-1 Registration Statement (File No. 333-67275)
(10)(b)Amendment No. 1 to the Reinsurance Agreement between Glenbrook Life and
Annuity Company and Allstate Life Insurance Company, dated June 8, 1995
(Incorporated herein by reference to the initial filing of the Company's
Form S-1 Registration Statement (File No 333-07275) dated June 28, 1996)
(10)(c)Amendment No. 2 to the Reinsurance Agreement between Glenbrook Life and
Annuity Company and Allstate Life Insurance Company, dated November 3, 1995
(Incorporated herein by reference to the initial filing of the Company's
Form S-1 Registration Statement (File No 333-07275) dated June 28, 1996)
(10)(d)Amendment No. 3 to the Reinsurance Agreement between Glenbrook Life and
Annuity Company and Allstate Life Insurance Company, dated October 28, 1998
(10)(e)Modified Coinsurance Agreement between Glenbrook Life and Annuity Company
and Allstate Life Insurance Company, effective September 1, 1993
(10)(f)Amendment No. 1 to the Modified Coinsurance Agreement between Glenbrook
Life and Annuity Company and Allstate Life Insurance Company, dated June
28, 1995
(10)(g)Amendment No. 2 to the Modified Coinsurance Agreement between Glenbrook
Life and Annuity Company and Allstate Life Insurance Company, dated
November 3, 1995
(10)(h)Amendment No. 3 to the Modified Coinsurance Agreement between Glenbrook
Life and Annuity Company and Allstate Life Insurance Company, dated October
28, 1998
(11) Not Required
(15) None
(18) None
(19) None
(22) None
(23) Not required
(24) None
(27) Financial Data Schedule
(b) Reports on 8-K
No reports on Form 8-K were filed during the first quarter of 1999.
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, on the 14th day of May 1999.
GLENBROOK LIFE AND ANNUITY COMPANY
----------------------------------
(Registrant)
/s/ LOUIS G. LOWER, II CHAIRMAN OF THE BOARD OF DIRECTORS
- ------------------------ AND CHIEF EXECUTIVE OFFICER
LOUIS G. LOWER, II (Principal Executive Officer)
/s/ KEITH A. HAUSCHILDT ASSISTANT VICE PRESIDENT AND CONTROLLER
- ------------------------ (Chief Accounting Officer)
KEITH A. HAUSCHILDT
15
<PAGE>
Exhibit Index
Exhibit No. Exhibit
(10)(d)Amendment No. 3 to the Reinsurance Agreement between Glenbrook Life and
Annuity Company and Allstate Life Insurance Company, dated October 28, 1998
(10)(e)Modified Coinsurance Agreement between Glenbrook Life and Annuity Company
and Allstate Life Insurance Company, effective September 1, 1993
(10)(f)Amendment No. 1 to the Modified Coinsurance Agreement between Glenbrook
Life and Annuity Company and Allstate Life Insurance Company, dated June
28, 1995
(10)(g)Amendment No. 2 to the Modified Coinsurance Agreement between Glenbrook
Life and Annuity Company and Allstate Life Insurance Company, dated
November 3, 1995
(10)(h)Amendment No. 3 to the Modified Coinsurance Agreement between Glenbrook
Life and Annuity Company and Allstate Life Insurance Company, dated October
28, 1998
(27) Financial Data Scehdule
10(g)
AMENDMENT NUMBER 3
TO THE REINSURANCE AGREEMENT
EFFECTIVE JUNE 5, 1992
BETWEEN
GLENBROOK LIFE AND ANNUITY COMPANY
(HEREINAFTER CALLED "GLENBROOK")
AND
ALLSTATE LIFE INSURANCE COMPANY
(HEREINAFTER CALLED "ALLSTATE")
WHEREAS, GLENBROOK and ALLSTATE entered into a Reinsurance Agreement effective
June 5, 1992 (hereinafter "Agreement"); and
WHEREAS, the parties now believe that the Agreement does not accurately reflect
their existing practices relating to settlements for certain tax benefits and
liabilities; and
WHEREAS, the parties desire to amend the Agreement to reflect the existing
practices with respect to such tax settlements;
NOW, THEREFORE, IT IS HEREBY AGREED, that the Agreement is amended as provided
below.
1.) Article III, paragraph 2, is amended by replacing subparagraph
(d) with a new subparagraph (d), as follows:
(d) Insurance taxes, licenses and fees (excluding Federal
Income Tax that is not related to the contracts reinsured
under this Agreement ), incurred by GLENBROOK with respect to
the contracts reinsured under this Agreement.
2.) Article III is further amended by adding a new paragraph 3, as
follows:
3. No less frequently than quarterly, ALLSTATE will calculate
the amount of federal and state income tax liabilities
incurred by GLENBROOK for the quarter related to the contracts
reinsured under this Agreement, and the amount of federal and
state income tax benefits earned by GLENBROOK for the quarter
related to the contracts reinsured under this Agreement. If
tax liabilities exceed tax benefits, the difference, plus a
gross-up for additional federal and state income taxes, will
be paid by ALLSTATE to GLENBROOK. If tax benefits exceed tax
liabilities, the difference, plus a gross-up for additional
federal and state income taxes, will be paid by GLENBROOK to
ALLSTATE.
Except as amended hereby, the Agreement shall remain unchanged.
IN WITNESS HEREOF, the parties to the Agreement have caused this Amendment to be
duly executed in duplicate by their respective officers on the dates shown
below.
Glenbrook Life and Annuity Company
By /s/ Sarah R. Donahue
Title Assistant Vice President
Date October 28, 1998
Allstate Life Insurance Company
By C. Nelson Strom
Title AVP
Date October 28, 1998
<PAGE>
10(e)
REINSURANCE AGREEMENT
between
GLENBROOK LIFE AND ANNUITY COMPANY, NORTHBROOK, ILLINOIS
(hereinafter "GLENBROOK")
and
ALLSTATE LIFE INSURANCE COMPANY, NORTHBROOK, ILLINOIS
(hereinafter "ALLSTATE")
Article I
BASIS of REINSURANCE
1. ALLSTATE will indemnify and GLENBROOK will automatically reinsure with
ALLSTATE, according to the terms and conditions hereof, the net liability
for contracts in force (or no longer in force but with remaining liability)
on the Effective Date and contracts directly issued subsequent to the
Effective Date by GLENBROOK on the contracts listed in Schedule A.
2. The indemnity reinsurance provided hereunder shall be on a modified
coinsurance basis. GLENBROOK shall retain, maintain, and own all assets
held in relation to the Reserve, as defined in Article II of this
Agreement.
3. In no event will reinsurance on an application or a policy under this
Agreement be in force unless the corresponding application is pending with
GLENBROOK or policy issued by GLENBROOK, or the reinsurance accepted by
GLENBROOK, as the case may be, is in force.
Article II
LIABILITY of ALLSTATE
1. The liability of ALLSTATE with respect to any contract reinsured hereunder
will begin simultaneously with that of GLENBROOK. ALLSTATE's liability with
respect to any contract reinsured hereunder will terminate on the date
GLENBROOK's liability on such contract terminates or the date this
Agreement is terminated, whichever is earlier. However, termination of this
Agreement will not terminate ALLSTATE's liability for benefit payments
incurred prior to the date of termination.
2. For the purpose of this Agreement, the term "Reserve" will be the "Total
Liabilities" of GLENBROOK's Variable Annuity Separate Accounts
(corresponding to amounts shown on page 3, line 17 of 1992 Separate
Accounts Statutory Statements).
Article III
MONTHLY SETTLEMENTS
1. While this Agreement is in effect, GLENBROOK shall pay to ALLSTATE on a
daily basis, with respect to eligible policies under this Agreement, a
reinsurance premium equal to the sum of Items (a) and (b) below less the
sum of Items (c) and (d) below.
(a) Gross premiums (direct and reinsurance assumed) collected by
GLENBROOK.
(b) Reserves transferred from the GLENBROOK General Account to a GLENBROOK
Separate Account.
(c) Gross premiums refunded by GLENBROOK to policyholders.
(d) Reserves transferred from a GLENBROOK Separate Account to the
GLENBROOK General Account.
2. While this Agreement is in effect, ALLSTATE shall pay to GLENBROOK on a
daily basis a benefit and expense allowance equal to the sum of Items (a),
(b), (c) and (d) below.
(a) Net benefits (as defined in Paragraph 3 of this Article III) paid by
GLENBROOK with respect to the contracts reinsured under this
Agreement.
(b) Commissions and other sales compensation incurred by GLENBROOK with
respect to the contracts reinsured under this Agreement.
(c) General insurance expenses incurred by GLENBROOK with respect to the
contracts reinsured under this Agreement.
(d) Insurance taxes, licenses and fees (excluding Federal Income Tax)
incurred by GLENBROOK with respect to the contracts reinsured under
this Agreement.
3. Net Benefits are defined as follows:
(a) For a contract issued directly by GLENBROOK and reinsured under this
Agreement, net benefits are the actual amounts payable by GLENBROOK to
the contractholder, less any amounts payable to GLENBROOK by another
reinsurer with respect to the contract. These payments include death
benefits, endowment benefits, annuity benefits, disability benefits,
benefits under A & H policies, withdrawals, surrender benefits and
payments on supplementary contracts with and without life
contingencies.
(b) For contracts reinsured by GLENBROOK and retroceded under this
Agreement, net benefits and commission and expense allowances are the
actual amounts payable by GLENBROOK to the ceding company with respect
to the contract reinsured by GLENBROOK.
Article IV
DAILY RESERVE ADJUSTMENTS
While this Agreement is in effect, a reserve adjustment equal to (or the
accounting equivalent of) the amount defined below shall be paid.
Let:
RC= The Reserve change in GLENBROOK'S Variable Annuity
Separate Accounts from the end of the prior
accounting period to the end of the current
accounting period for the reinsured contracts
(corresponding to the sum of the amounts on page 4,
lines 10, 11, 12 and 13 1992 Separate Account
Statutory
Statements).
NII= The net investment income in GLENBROOK's Variable
Annuity Separate Accounts (corresponding to the sum
of the amounts on page 4, line 2 of 1992 Separate
Account Statutory Statements), minus interest income
on GLENBROOK'S capital investment in the Separate
Accounts.
If RC is greater than NII then a reserve adjustment of RC-NII is payable by
ALLSTATE to GLENBROOK.
If NII is greater than RC, then a reserve adjustment of NII-RC is payable
by GLENBROOK to ALLSTATE.
Article V
OVERSIGHTS
ALLSTATE shall be bound as GLENBROOK is bound, and it is expressly understood
and agreed that if failure to reinsure or failure to comply with any terms of
this Agreement is shown to be unintentional and the result of misunderstanding
or oversight on the part of either GLENBROOK or ALLSTATE, both GLENBROOK and
ALLSTATE shall be restored to the positions they would have occupied had no such
error or oversight occurred.
Article VI
INSPECTION OF RECORDS
GLENBROOK and ALLSTATE shall have the right, at any reasonable time, to examine
at the office of the other, any books, documents, reports or records which
pertain in any way to the contracts reinsured under this Agreement.
Article VII
INSOLVENCY
1. In the event of the insolvency of GLENBROOK, reinsurance hereunder is
payable by ALLSTATE on the basis of its liability hereunder without
diminution because of the insolvency of GLENBROOK.
2. Further, in the event of the insolvency of GLENBROOK, the liquidator,
receiver or statutory successor of the insolvent GLENBROOK shall give
written notice to ALLSTATE of the pendency of any obligation of the
insolvent GLENBROOK on any policy reinsured, whereupon ALLSTATE may
investigate such claim and interpose at its own expense, in the proceeding
where such claim is to be adjudicated, any defense or defenses which it may
deem available to GLENBROOK or its liquidator or statutory successor. The
expense thus incurred by ALLSTATE shall be chargeable, subject to court
approval, against the insolvent GLENBROOK as part of the expenses of
liquidation to the extent of a proportionate share of the benefit which may
accrue to GLENBROOK solely as a result of the defense undertaken by
ALLSTATE.
3. All moneys due GLENBROOK or ALLSTATE under this Agreement shall be offset
against each other, dollar for dollar, regardless of any insolvency of
either party.
Article VII
ARBITRATION
Any dispute arising with respect to this Agreement which is not settled by
mutual agreement of the parties shall be referred to arbitration. Within twenty
(20) days from receipt of written notice from one party that an arbitrator has
been appointed, the other party shall also name an arbitrator. The two
arbitrators shall choose a third arbitrator and shall forthwith notify the
contracting parties of such choice. Each arbitrator shall be a present or former
officer of a life insurance company and should have no present or past
affiliation with this Agreement or with either party. The arbitrators shall
consider this Agreement as an honorable engagement rather than merely as a legal
obligation, and shall be relieved of all judicial formalities. The decision of
the arbitrators shall be final and binding upon the parties hereto. Each party
shall bear the expenses of its own arbitrator and shall jointly and equally bear
the expenses of the third arbitrator and of the arbitration. Any such
arbitration shall take place at the Home Office of GLENBROOK, unless some other
location is mutually agreed upon.
Article IX
PARTIES TO AGREEMENT
This Agreement is solely between GLENBROOK and ALLSTATE. The acceptance of
reinsurance hereunder shall not create any right or legal relation whatever
between ALLSTATE and any party in interest under any contract of GLENBROOK
reinsured hereunder. GLENBROOK shall be and remain solely liable to any insured,
contract owner, or beneficiary under any contract reinsured hereunder.
Article X
DURATION OF AGREEMENT
This Agreement will be effective as of September 1, 1993, and will be unlimited
as to its duration; provided, however, it may be terminated with respect to the
reinsurance of new business by either party giving the other party sixty (60)
days prior written notice of termination.
Article XI
ENTIRE AGREEMENT
This Agreement constitutes the entire contract between ALLSTATE and GLENBROOK.
No variation, modification or changes to this Agreement shall be binding unless
in writing and signed by an officer of each party.
IN WITNESS HEREOF, the parties to this Agreement have caused it to be duly
executed in duplicate by their respective officers on the dates shown below.
GLENBROOK LIFE AND ANNUITY COMPANY of Northbrook, Illinois
By /s/ Craig Whitehead
Title Assistant Vice President
Date September 8, 1993
ALLSTATE LIFE INSURANCE COMPANY of Northbrook, Illinois
By /s/ James D. Clements
Title Assistant Vice President, Assistant Secretary and General Counsel
Date September 3, 1993
<PAGE>
SCHEDULE A
CONTRACTS SUBJECT TO REINSURANCE UNDER THIS TREATY
Any annuity contract whose reserve is invested, in whole or in part, in any
account designated as a GLENBROOK Separate Account shall be reinsured under this
Agreement; provided, however, that the portion of any such contract which is not
so invested is not covered under this Agreement.
<PAGE>
10(f)
AMENDMENT #1 TO THE
REINSURANCE AGREEMENT
BETWEEN
GLENBROOK LIFE AND ANNUITY COMPANY, NORTHBROOK, ILLINOIS
(HEREINAFTER CALLED "GLENBROOK")
AND
ALLSTATE LIFE INSURANCE COMPANY, NORTHBROOK, ILLINOIS
(HEREINAFTER CALLED "ALLSTATE")
WHEREAS, GLENBROOK and ALLSTATE entered into a Modified Coinsurance Agreement
(hereinafter "Agreement"), having an effective date of September 1, 1993; and,
WHEREAS, the California Insurance Department has determined that various changes
to the Agreement are required under California insurance law; and
WHEREAS, GLENBROOK and ALLSTATE desire to amend the Agreement with respect to
coverage issued to California residents to meet the California requirements;
NOW, THEREFORE, the Agreement is hereby amended with respect to California
residents, as follows:
1.) Article VII, "Insolvency", hereby amended by deleting said Article in its
entirety, and replacing it with the following new Article VII:
Article VII
INSOLVENCY
1. The portion of any risk or obligation assumed by Allstate, when such portion
is ascertained, shall be payable on demand of Glenbrook at the same time as
Glenbrook shall pay its net retained portion of such risk or obligation, and the
reinsurance shall be payable by Allstate on the basis of the liability of
Glenbrook under the contract or contracts reinsured under this Agreement without
diminution because of the insolvency of Glenbrook. In the event of insolvency
and the appointment of a conservator, liquidator or statutory successor of
Glenbrook, such portion shall be payable to such conservator, liquidator or
statutory successor immediately upon demand, on the basis of claims allowed
against Glenbrook by any court of competent jurisdiction or, by any conservator,
liquidator, or statutory successor of Glenbrook having authority to allow such
claims, without diminution because of such insolvency or because such
conservator, liquidator or statutory successor has failed to pay all or a
portion of any claims. Payment by Allstate as above set forth shall be made
directly to Glenbrook or its conservator, liquidator or statutory successor.
2. Further, in the event of the insolvency of Glenbrook, the liquidator,
receiver or statutory successor of the insolvent Glenbrook shall give written
notice to Allstate of the pendency of an obligation of the insolvent Glenbrook
on any policy reinsured, whereupon Allstate may investigate such claim and
interpose at its own expense, in the proceeding where such claim is to be
adjudicated, any defense or defenses which it may deem available to Glenbrook or
its liquidator or statutory successor. The expense thus incurred by Allstate
shall be chargeable, subject to court approval, against the insolvent Glenbrook
as part of the expenses of liquidation to the extent of a proportionate share of
the benefit which may accrue to Glenbrook solely as a result of the defense
undertaken by Allstate.
2.) Article VIII, Arbitration, shall be amended to include the following
language at the end of that article:
The decision of the Arbitrators shall be handed down within 45 days of
the date on which the arbitration is concluded.
3.) Article X, Duration of the Agreement, shall be deleted in its entirety and
shall be replaced with the following language:
This Agreement shall be effective as of September 1, 1993, and will be
unlimited as to its duration; provided, however, it may be terminated with
respect to the reinsurance of new business by either party giving the other
party ninety (90) days prior written notice of termination to the other party.
4.) In addition, a new Article XII is added to the Agreement, as follows:
Article XII
OFFSET
All monies due Glenbrook or Allstate under this Agreement shall be offset
against each other dollar for dollar.
5.) Finally, the definition of "RC" contained in Article IV, Daily Reserve
Adjustments, shall be deleted and replaced with the following language:
RC = The Reserve change in GLENBROOK'S Variable Annuity Separate
Accounts from the end of the prior accounting period to the end of the current
accounting period for the reinsured contracts (corresponding to the sum of the
amounts in page 4, lines 10, 11, 12 and 13 of 1992 Separate Account Statutory
Statements). An account period shall be defined as one day.
This amendment shall be effective __________, 1995. Except as amended hereby,
the Agreement shall remain unchanged.
IN WITNESS HEREOF, the parties to the Agreement have caused this Amendment to be
duly executed in duplicate by their respective officers on the dates shown
below.
Glenbrook Life and Annuity Company
By /s/ Marla Friedman
Title Vice President
Date June 8, 1995
Allstate Life Insurance Company
By Michael J. Velotta
Title Vice President, Secretary and General Counsel
Date June 8, 1995
<PAGE>
10(g)
AMENDMENT NUMBER 2
TO THE REINSURANCE AGREEMENT
EFFECTIVE SEPTEMBER 1, 1993
BETWEEN
GLENBROOK LIFE AND ANNUITY COMPANY
(HEREINAFTER CALLED "GLENBROOK")
AND
ALLSTATE LIFE INSURANCE COMPANY
(HEREINAFTER CALLED "ALLSTATE")
IT IS HEREBY AGREED, that the Reinsurance Agreement effective September 1, 1993
between GLENBROOK and ALLSTATE (hereinafter "Agreement"), is amended as provided
below.
Effective January 1, 1993, Article III is hereby amended by adding the follwoing
new paragraph:
ALLSTATE and GLENBROOK agree to an election under Treasury Regulations
1-848-2(g)(8), as follows:
a) For each taxable year under this Agreement, the party with net positive
consideration, as defined in the regulations promulgated under Treasury Code
Section 848, will capitalize specified policy acquisition expenses with respect
to this Agreement without regard to the general deductions limitation of Section
848(c)(1);
(b) GLENBROOK and ALLSTATE agree to exchange information pertaining to the
amount of net consideration for all reinsurance agreements in force between them
to ensure consistency for purposes of computing specified policy acquisition
expenses. GLENBROOK and ALLSTATE shall agree on the amount of such net
consideration for each taxable year no later than the May 1 following the end of
such year.
(c) This election shall be effective for 1993 and for all subsequent taxable
years for which this Agreement remains in effect.
Except as amended hereby, the Agreement shall remain unchanged.
IN WITNESS HEREOF, the parties to the Agreement have caused this Amendment to be
duly executed in duplicate by their respective officers on the dates shown
below.
Glenbrook Life and Annuity Company
By /s/ Sarah R. Donahue
Title Vice President
Date December 18, 1995
Allstate Life Insurance Company
By C. Nelson Strom
Title AVP
Date November 3, 1995
<PAGE>
10(h)
AMENDMENT NUMBER 3
TO THE REINSURANCE AGREEMENT
EFFECTIVE SEPTEMBER 1, 1993
BETWEEN
GLENBROOK LIFE AND ANNUITY COMPANY
(HEREINAFTER CALLED "GLENBROOK")
AND
ALLSTATE LIFE INSURANCE COMPANY
(HEREINAFTER CALLED "ALLSTATE")
WHEREAS, GLENBROOK and ALLSTATE entered into a Reinsurance Agreement effective
September 1, 1993 (hereinafter "Agreement"); and
WHEREAS, the parties now believe that the Agreement does not accurately reflect
their existing practices relating to settlements for certain tax benefits and
liabilities; and
WHEREAS, the parties desire to amend the Agreement to reflect the existing
practices with respect to such tax settlements;
NOW, THEREFORE, IT IS HEREBY AGREED, that the Agreement is amended as provided
below.
1.) Article III, paragraph 2, is amended by replacing subparagraph
(d) with a new subparagraph (d), as follows:
(d) Insurance taxes, licenses and fees (excluding Federal
Income Tax that is not related to the contracts reinsured
under this Agreement ), incurred by GLENBROOK with respect to
the contracts reinsured under this Agreement.
2.) Article III is further amended by adding a new paragraph 5, as
follows:
5. No less frequently than quarterly, ALLSTATE will calculate
the amount of federal and state income tax liabilities
incurred by GLENBROOK for the quarter related to the contracts
reinsured under this Agreement, and the amount of federal and
state income tax benefits earned by GLENBROOK for the quarter
related to the contracts reinsured under this Agreement. If
tax liabilities exceed tax benefits, the difference, plus a
gross-up for additional federal and state income taxes, will
be paid by ALLSTATE to GLENBROOK. If tax benefits exceed tax
liabilities, the difference, plus a gross-up for additional
federal and state income taxes, will be paid by GLENBROOK to
ALLSTATE.
Except as amended hereby, the Agreement shall remain unchanged.
IN WITNESS HEREOF, the parties to the Agreement have caused this Amendment to be
duly executed in duplicate by their respective officers on the dates shown
below.
Glenbrook Life and Annuity Company
By /s/ Sarah R. Donahue
Title Assistant Vice President
Date October 22, 1998
Allstate Life Insurance Company
By /s/ C. Nelson Strom
Title AVP
Date October 22, 1998
<TABLE> <S> <C>
<ARTICLE> 7
<LEGEND> THIS SCHEUDLE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
STATEMENTS OF FINANCIAL POSITION AT MARCH 31, 1999; STATEMENTS OF OPERATIONS
THREE MONTHS ENDED MARCH 31, 1999; AND STATEMENTS OF CASH FLOWS THREE MONTHS
ENDED MARCH 31, 1999.
</LEGEND>
<CIK> 0000945094
<NAME> GLENBROOK LIFE & ANNUITY COMPANY
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> MAR-31-1999
<EXCHANGE-RATE> 1
<DEBT-HELD-FOR-SALE> 96,277
<DEBT-CARRYING-VALUE> 0
<DEBT-MARKET-VALUE> 0
<EQUITIES> 0
<MORTGAGE> 0
<REAL-ESTATE> 0
<TOTAL-INVEST> 98,200
<CASH> 0
<RECOVER-REINSURE> 3,305,641
<DEFERRED-ACQUISITION> 0
<TOTAL-ASSETS> 4,476,862
<POLICY-LOSSES> 0
<UNEARNED-PREMIUMS> 0
<POLICY-OTHER> 0
<POLICY-HOLDER-FUNDS> 3,305,641
<NOTES-PAYABLE> 0
0
0
<COMMON> 2,100
<OTHER-SE> 90,846
<TOTAL-LIABILITY-AND-EQUITY> 4,476,862
0
<INVESTMENT-INCOME> 1,578
<INVESTMENT-GAINS> 0
<OTHER-INCOME> 0
<BENEFITS> 0
<UNDERWRITING-AMORTIZATION> 0
<UNDERWRITING-OTHER> 0
<INCOME-PRETAX> 1,578
<INCOME-TAX> 551
<INCOME-CONTINUING> 1,027
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,027
<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>
