485BPOS 1 f3289d1.htm NORTHWESTERN MUTUAL VARIABLE LIFE ACCOUNT (VLI)

Registration No. 002-89972

Registration No. 811-03989

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549


FORM N-6
REGISTRATION STATEMENT UNDER THE SECURITIES
ACT OF 1933	/	/
Pre-Effective Amendment No.	/	/
Post-Effective Amendment No. 50	/ X /
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT
COMPANY ACT OF 1940	/	/
Amendment No. 89	/ X /

(Check appropriate box or boxes.)
NORTHWESTERN MUTUAL VARIABLE LIFE ACCOUNT
(Exact Name of Registrant)
THE NORTHWESTERN MUTUAL LIFE INSURANCE COMPANY
(Name of Depositor)
720 East Wisconsin Avenue, Milwaukee, Wisconsin	53202
(Address of Depositor's Principal Executive Offices)	(Zip Code)

Depositor's Telephone Number, including Area Code 414-271-1444

Raymond J. Manista, Executive Vice President, Chief Legal Officer, and Secretary

The Northwestern Mutual Life Insurance Company

720 East Wisconsin Avenue, Milwaukee, Wisconsin 53202

(Name and Address of Agent for Service)

Copy to:

Chad E. Fickett, Assistant General Counsel and Assistant Secretary

The Northwestern Mutual Life Insurance Company

720 East Wisconsin Avenue

Milwaukee, Wisconsin 53202

414-665-1209

Approximate Date of Proposed Public Offering

Continuous

It is proposed that this filing will become effective (check appropriate space)

immediately upon filing pursuant to paragraph (b) of Rule 485 on May 1, 2020 pursuant to paragraph (b) of Rule 485

60 days after filing pursuant to paragraph (a)(1) of Rule 485 on __________ pursuant to paragraph (a)(1) of Rule 485

this post-effective amendment designates a new effective date for a previously filed post-effective amendment.

Prospectus

May 1, 2020

Variable Life

Whole Life

Extra Ordinary Life

Single Premium Life

Issued by The Northwestern Mutual Life Insurance Company

and the Northwestern Mutual Variable Life Account

This prospectus describes three Variable Life Insurance Policies (each a “Policy”, together the “Policies”). You may choose to invest your Net Premiums in up to six Divisions of the Northwestern Mutual Variable Life Account (the “Separate Account”), each of which invests in one of the corresponding Portfolios listed below:

Northwestern Mutual Series Fund, Inc.

Growth Stock Portfolio

Focused Appreciation Portfolio

Large Cap Core Stock Portfolio

Large Cap Blend Portfolio

Index 500 Stock Portfolio

Large Company Value Portfolio

Domestic Equity Portfolio

Equity Income Portfolio

Mid Cap Growth Stock Portfolio

Index 400 Stock Portfolio

Mid Cap Value Portfolio

Small Cap Growth Stock Portfolio

Index 600 Stock Portfolio

Small Cap Value Portfolio

International Growth Portfolio

Research International Core Portfolio

International Equity Portfolio

Emerging Markets Equity Portfolio

Government Money Market Portfolio

Short-Term Bond Portfolio

Select Bond Portfolio

Long-Term U.S. Government Bond Portfolio

Inflation Protection Portfolio

High Yield Bond Portfolio

Multi-Sector Bond Portfolio

Balanced Portfolio

Asset Allocation Portfolio

Fidelity^® Variable Insurance Products

VIP Mid Cap Portfolio

VIP Contrafund^® Portfolio

Neuberger Berman Advisers Management Trust

Sustainable Equity Portfolio

Russell Investment Funds

U.S. Strategic Equity Fund

U.S. Small Cap Equity Fund

Global Real Estate Securities Fund

International Developed Markets Fund

Strategic Bond Fund

Russell Investment Funds LifePoints^®

Variable Target Portfolio Series

Moderate Strategy Fund

Balanced Strategy Fund

Growth Strategy Fund

Equity Growth Strategy Fund

Credit Suisse Trust

Commodity Return Strategy Portfolio

Please note that the Policies and the Portfolios are not guaranteed to achieve their goals and are not federally insured. The Policies and the Portfolios have not been endorsed by any bank or government agency and are subject to risks, including loss of the principal amount invested.

Each Policy is subject to the law of the state in which it is issued. Some of the terms of a Policy may differ from the terms of a Policy delivered in another state because of state specific legal requirements. Areas where state specific Policy provisions may apply include, but are not limited to:

•

certain investment options and certain policy features; and

•

portfolio transfer rights.

Please read carefully this prospectus and the accompanying prospectuses for the corresponding Portfolios and keep them for future reference. These prospectuses provide information that you should know before investing in the Policies. No person is authorized to make any representation in connection with the offering of the Policies other than those contained in these prospectuses.

The Securities and Exchange Commission (“SEC”) has not approved or disapproved the Policies or determined that this prospectus is accurate or complete. It is a criminal offense to state otherwise.

We no longer issue the three Policies described in this prospectus. The variable life policies we presently offer are described in separate prospectuses.

Beginning on or after January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission, paper copies of your Portfolios’ shareholder reports will no longer be sent by mail unless you specifically request paper copies of the reports from us at (888) 455-2232 free of charge. Instead, your Portfolio annual and semi-annual reports will be made available on a website and you will be notified by mail each time a report is posted and provided with a website link to access the report for each Portfolio. Your election to receive shareholder reports in paper will apply to all future reports for all Portfolios available under your policy or contract. If you already elected to receive shareholder reports electronically, you will not be affected by this change, will continue to receive reports electronically and you need not take any action. You may elect to receive shareholder reports (and other communications) electronically by following the instructions on the back cover of this prospectus.

LOGO

Contents for this Prospectus


	Page
SUMMARY OF BENEFITS AND RISKS		1
Benefits of the Policies		1
Death Benefit		1
Access to Your Values		1
Flexibility		1
Optional Benefits		1
Income Plan Options		1
Tax Benefits		1
Risks of the Policies		1
Investment Risk		1
Default Risk		2
Policy for Long-Term Protection		2
Policy Lapse		2
Policy Loan Risks		2
Limitations on Access to Your Values		2
Adverse Tax Consequences		2
Risk of an Increase in Current Fees and Expenses		2
FEE AND EXPENSE TABLES		2
Transaction Fees		2
Periodic Charges (Other than Portfolio Operating Expenses)		3
Whole Life Policy		4
Extra Ordinary Life Policy		5
Single Premium Life Policy		6
Annual Portfolio Operating Expenses		6
THE COMPANY		7
THE SEPARATE ACCOUNT		7
THE FUNDS		8
Northwestern Mutual Series Fund, Inc. (the “Series Fund”)		8
Fidelity^® Variable Insurance Products		9
Neuberger Berman Advisers Management Trust		10
Russell Investment Funds		10
Credit Suisse Trust		10
Payments We Receive		10
INFORMATION ABOUT THE POLICIES		11
Premiums		11
Whole Life Policy		12
Extra Ordinary Life Policy		12
Single Premium Life Policy		12
Grace Period		12
Premium Repayment Program		13
Allocating Premiums to the Separate Account		13
Transfers Between Divisions		13
Short-Term and Excessive Trading		14
Deductions and Charges		15
Deductions from Premiums for Whole Life and Extra Ordinary Life Policies		15
Deductions for Single Premium Life Policies		16
Charges Against the Separate Account Assets		16


	Page
Optional Benefits		17
Guarantee of Premiums, Deductions and Charges		17
Death Benefit		17
Payment of Proceeds		17
Variable Insurance Amount		18
Whole Life Policy and Single Premium Life Policy		18
Extra Ordinary Life Policy		19
Cash Value		20
Annual Dividends		20
Policy Loans and Automatic Premium Loans		21
Policy Loans		21
Automatic Premium Loans		21
General Loan Terms		21
Extended Term and Paid-Up Insurance		22
Reinstatement		22
Reinvestments After Surrender		22
Right to Exchange for a Fixed Benefit Policy		23
Modifying a Policy		23
Other Policy Provisions		23
Owner		23
Beneficiary		23
Incontestability		23
Misstatement of Age or Sex		24
Collateral Assignment		24
Optional Benefits		24
Income Plans		24
Deferral of Determination and Payment		24
Voting Rights		24
Substitution of Portfolio Shares and Other Changes		24
Reports and Financial Statements		25
Special Policy for Employers		25
Householding		25
Abandoned Property Requirements		25
Cybersecurity and Certain Business Continuity Risks		25
Legal Proceedings		26
Speculative Investing		26
Owner Inquiries		26
Illustrations		26
TAX CONSIDERATIONS		26
General		26
Life Insurance Qualification		27
Tax Treatment of Life Insurance		27
Modified Endowment Contracts (MEC)		28
Estate and Generation Skipping Taxes		29
Business-Owned Life Insurance		29
Split Dollar Arrangements		30
Valuation of Life Insurance		30
Other Tax Considerations		30
DISTRIBUTION OF THE POLICY		30
GLOSSARY OF TERMS		31
ADDITIONAL INFORMATION		33

Variable Life

•

Whole Life

•

Extra Ordinary Life

•

Single Premium Life

Summary of Benefits and Risks

The following summary identifies some of the benefits and risks of the three Policies described in this prospectus. It omits important information which is included elsewhere in this prospectus, in the attached mutual fund prospectuses, and in the terms of the Policies. Unless clear from their context or otherwise appropriate, all of the capitalized terms used in this prospectus are defined herein or at the end of this prospectus in the Glossary of Terms.

In general, your Policy will lapse or terminate without value if you do not pay sufficient premium before the end of a predetermined grace period to keep your Policy inforce (see “Grace Period”). However, if your Policy enters the grace period between March 1, 2020 and June 1, 2020, the state in which your Policy was issued or delivered may require or provide for a longer grace period, allow for the deferral of premium payments, provide for greater allowances to exercise certain contractual rights or benefits, or impose restrictions against Policy lapse or termination in recognition of financial hardships posed by the current public health (COVID-19) crisis, and the Company may offer additional accommodations beyond minimum state requirements as appropriate. Some states may also impose restrictions against Policy lapse or termination during the COVID-19 crisis where the Policy entered the grace period prior to March 1, 2020. Additional extensions of your Policy’s grace period, deferrals of premium payments, greater allowances to exercise certain contractual rights and/or restrictions on Policy lapse may apply in the future but are not guaranteed. Please contact the Company at 1-866-424-2609 for further information.

Benefits of the Policies

Death Benefit The primary benefit of each Policy is the life insurance protection that it provides. For each Policy the Death Benefit includes a guaranteed amount which will not be reduced during the lifetime of the Insured so long as you pay premiums when they are due and no Policy Debt is outstanding. The remainder of the Death Benefit is the variable insurance amount which fluctuates in response to actual investment results and is not guaranteed. The Extra Ordinary Life Policy also provides some term insurance during the early Policy Years. The Death Benefit is increased by the amount of any paid-up additions which you have purchased with any dividends that we pay, except that for Extra Ordinary Life Policies, variable insurance amount and paid-up additions will first be used to replace term insurance before increasing the Death Benefit. The relationships among the guaranteed and variable amounts and any paid-up additions and term insurance depend on the design of the particular Policy.

Access to Your Values The Policy provides access to Cash Value during the lifetime of the Insured. You may surrender your Policy for the Cash Value at any time during the lifetime of the Insured. We will permit a Death Benefit reduction so long as the Policy that remains meets our minimum size requirements. Under some circumstances there may be a release of Cash Value upon the reduction of your Death Benefit. You may borrow an amount from the Company up to 90% of your Policy’s Cash Value using the Policy as security.

Flexibility You may direct the allocation of your premiums and apportion the Separate Account assets supporting your Policy among the various Divisions of the Separate Account, using as many as six Divisions at any time. Subject to certain limits, you may transfer accumulated amounts from one Division to another as often as twelve times in a Policy Year.

Optional Benefits Whole Life and Extra Ordinary Life Policies may include two optional benefits: a Waiver of Premium Benefit and an Additional Purchase Benefit. These optional benefits are not available for all Issue Ages and underwriting classifications, and may not be available in all states.

Income Plan Options There are several ways of receiving proceeds under the Death Benefit and surrender provisions of the Policy, other than in a lump sum. More detailed information concerning these options is included elsewhere in this prospectus. You may also call our Income and Maturity Services Department at 1-866-269-2950 for more information.

Tax Benefits You are generally not taxed on your Policy’s investment gains until you surrender the Policy.

Risks of the Policies

Investment Risk Your Policy allows you to participate in the investment experience of the Divisions you select. You bear the corresponding investment risks. You will be subject to the risk that the investment performance of the Divisions will be unfavorable and that, due both to the unfavorable performance and the resulting higher insurance charges, the Policy Value and Cash Value will decrease. You could lose everything you invest. You may find a comprehensive discussion of these investment risks in the attached mutual fund prospectuses. You will also be subject to the risk that the investment performance of the Divisions you choose may be less favorable than that of other Divisions, and in order to keep the Extra Life Protection of an Extra Ordinary Life Policy from decreasing, you may be required to pay more premiums than originally planned.


Variable Life Prospectus			1

Default Risk Because certain guarantees under the Policies are guaranteed by the Company’s General Account assets, the ability to make good on these guarantees depends on the financial strength and claims-paying ability of the Company. Therefore, guaranteed benefits in excess of Invested Assets in the Separate Account are subject to the risk of default to the extent the Company is unable to satisfy some or all of these guarantees.

Policy for Long-Term Protection Your Policy is designed to serve your need for long-term life insurance protection. It is not a suitable investment for short-term goals. We have not designed the Policies for frequent trading.

Policy Lapse Your Whole Life or Extra Ordinary Life Policy will lapse unless you pay the premiums when they are due, unless the Policy is continued as extended term insurance or a reduced amount of paid-up insurance.

Policy Loan Risks A loan, whether or not repaid, will affect your Policy Value and Cash Value over time because the amounts borrowed do not participate in the investment performance of the Divisions; in addition, a charge is deducted from your Policy Value while there is Policy Debt. The effect of a loan may be either favorable or unfavorable, depending on whether the earnings rate credited to the loan amount is higher or lower than the investment performance of the unborrowed amounts left in the Divisions. The Death Benefit is reduced by the amount of any Policy Debt outstanding. If you surrender the Policy or allow it to lapse while Policy Debt is outstanding, the amount of the loan is extinguished by applying the Policy Value to repay it. If the Policy Debt exceeds the investment in the contract, we are required to report the extinguishment to you and the IRS on an IRS Form 1099-R.

Limitations on Access to Your Values The Policies permit access to Cash Value by Policy loans and by surrender of the Policy. A partial withdrawal of the Cash Value is not permitted, except to the extent there is a reduction of Death Benefit which leads to a release of Cash Value.

Adverse Tax Consequences Our understanding of the principal tax considerations for the Policy under current tax law is set forth in this prospectus. There are areas of some uncertainty under current law, and we do not address the likelihood of future changes in the law or interpretations thereof. Among other risks, your Policy may become a modified endowment contract. A modified endowment contract (“MEC”) is a life insurance contract that is taxed less favorably on lifetime distributions than other life insurance contracts because the contract is considered too investment oriented. Generally, a Policy may be classified as a MEC if cumulative premiums paid during a seven-pay period exceed a “seven-pay” limit defined in the Internal Revenue Code. Distributions, including loans, from a Policy classified as a MEC are taxable to the extent of the gain in the Policy and may be subject to a 10% premature withdrawal penalty if taken before the Owner attains age 59¹⁄₂. Moreover, excessive Policy loans could cause a Policy to terminate with no value with which to pay the tax liability. In addition, please note that you may no longer change Insureds on your Policy. Death Benefit proceeds may be subject to state and/or inheritance taxes. (See “Tax Considerations”).

Risk of an Increase in Current Fees and Expenses Certain fees and expenses are currently assessed at less than their maximum levels. We may increase these current charges in the future up to the guaranteed maximum levels. If fees and expenses are increased, you may need to increase the amount of premiums to keep the Extra Life Protection of an Extra Ordinary Life Policy from decreasing.

Fee and Expense Tables

The following tables describe the fees and expenses that you will pay when owning or surrendering a Policy. See “Deductions and Charges” for a more detailed description.

Transaction Fees¹

This table describes the fees and expenses you will pay when you pay premiums, surrender the Policy or transfer amounts between the Divisions.


	Charge	When Charge is Deducted	Maximum Amount Deducted	Current Amount Deducted
Whole Life and Extra Ordinary Life Policies	Premium Taxes	When you pay premiums	2% of the basic premium²	2% of the basic premium²
	Sales Load	When you pay premiums	Same as the current amount	Year 1: 30% of basic premium² Years 2-4: 10% of basic premium² Years 5-on: Not more than 7% of basic premium²
	Charge for Issuance Expenses	When you pay premiums—first Policy Year only	Same as the current amount	Not more than $5 for each $1,000 of insurance


2		Variable Life Prospectus


	Charge	When Charge is Deducted	Maximum Amount Deducted	Current Amount Deducted
Whole Life and Extra Ordinary Life Policies	Premium Taxes	When you pay premiums	2% of the basic premium²	2% of the basic premium²
	Sales Load	When you pay premiums	Same as the current amount	Year 1: 30% of basic premium² Years 2-4: 10% of basic premium² Years 5-on: Not more than 7% of basic premium²
	Charge for Issuance Expenses	When you pay premiums—first Policy Year only	Same as the current amount	Not more than $5 for each $1,000 of insurance
Single Premium Life Policy	Administrative Charge	When we issue the Policy	$150	$150
Single Premium Life Policy	Surrender Charge	When you surrender the Policy during the first ten Policy Years	Not more than 9% of the premium paid for the Policy³	0%
All Policies	Fee for Transfer of Assets	When you transfer assets among the Divisions	The fee will not exceed our administrative costs of transfers	Currently waived
Whole Life and Extra Ordinary Life Policies	Extra Premium for Insureds Who Do Not Qualify as Select Risks	When you pay premiums	Same as current amount⁴; Variable Whole Life; Maximum: $52.70 per $1,000 of face amount; Variable Extra Ordinary Life Policies; Maximum: $58.71 per $1,000 of face amount	The amount depends on the underwriting classification
All Policies	Expedited Delivery Charge⁵	When express mail delivery is requested	$50 per delivery (up to $75 for next day, a.m. delivery) adjusted for inflation⁶	$15 per delivery (up to $45 for next day, a.m. delivery)
All Policies	Wire Transfer Fee⁵	When a wire transfer is requested	$50 per transfer (up to $100 for international wires) adjusted for inflation⁶	$25 per transfer (up to $50 for international wires)

¹	Some fees and expenses, such as fees applicable in Policy Years prior to your current Policy Year, may no longer apply because the Policies are no longer issued.

²	The basic premium for a Policy is the gross premium which would be payable if you paid the premium annually, less the annual deduction for administrative costs. See “Deductions and Charges” for more information.

³	This charge no longer applies because you have owned your Policy for longer than ten years.

⁴	This charge will vary depending on underwriting classification of the Insured.

⁵	This fee may increase over time to cover our administrative or other costs but will not exceed the maximum charge. We may discontinue this service at any time, with or without notice.

⁶

The maximum amount deducted is subject to a consumer price index adjustment in order to accommodate future increases in the costs associated with these requests. The maximum amount deducted will equal the maximum charge shown above multiplied by the CPI for the fourth month prior to the time of the charge, divided by the CPI for April, 2009. “CPI” means the Consumer Price Index for All Urban Consumers, United States City Average, All Items, as published by the United States Bureau of Labor Statistics. If the method for determining the CPI is changed, or it is no longer published, it will be replaced by some other index found by the Company to serve the same purpose.

Periodic Charges (Other than Portfolio Operating Expenses)

These tables describe the fees and expenses, other than operating expenses for the Portfolios, that you will pay periodically during the time that you own a Policy. Please refer to the table specific to your Policy. As noted below, in some cases the charges shown in the table may not be representative of what a particular Owner may pay. Please request an illustration from your Financial Representative for personalized information, including the particular charges applicable to your Policy. (See “Illustrations”).


Variable Life Prospectus			3

Whole Life Policy


Charge	When Charge is Deducted	Maximum Amount Deducted	Current Amount Deducted
Charge for Administrative Costs	Annually, on the Policy Anniversary	$35	$35
Charge for Death Benefit Guarantee	Annually, on the Policy Anniversary	1¹⁄₂% of the basic premium¹	1¹⁄₂% of the basic premium¹
Charge for Mortality and Expense Risks	Daily	Annual rate of .50% of the Separate Account Assets	Annual rate of .50% of the Separate Account Assets
Charge for Federal Income Taxes	Daily	A rate which reflects that portion of our actual tax expenses which is fairly allocable to the Policies	Annual rate of .05% of the Separate Account Assets
Cost of Insurance	Calculated at least annually on the Policy Anniversary	Same as current amount, without the current dividend	Maximum: $1,000 per $1,000 of net amount at risk (Attained Age 99)² Minimum: $0.69 per $1,000 of net amount at risk (Attained Age 10 female)² Representative: $13.89 per $1,000 of net amount at risk (Attained Age 58 male)
Charge for Mortality and Expense Risks and Expenses for Loans³	Daily	Annual rate of 1.00% of the borrowed amount	When the Insured is Attained Age 99 and below: Annual rate of 0.85% of the borrowed amount; When the Insured is Attained Age 100 and above: Annual rate of 0.30% of the borrowed amount
Waiver of Premium Benefit⁴	Annually, on the Policy Anniversary, if this benefit is attached to your Policy and the Attained Age is less than 65	Same as current amount	Maximum: $2.05 per $1,000 of face amount (Issue Age 58) Minimum: $0.13 per $1,000 of face amount (Issue Age 0-6) Representative: $0.37 per $1,000 of face amount (Issue Age 35)
Additional Purchase Benefit⁵	Annually, on the Policy Anniversary, if this benefit is attached to your Policy and the Attained Age is less than 40	Same as current amount	Maximum: $2.21 per $1,000 of Additional Purchase Benefit (Issue Age 38)⁵ Minimum: $0.54 per $1,000 of Additional Purchase Benefit (Issue Age 0)⁵ Representative: $0.54 per $1,000 of Additional Purchase Benefit (Issue Age 0)

¹	The basic premium for a Policy is the gross premium which would be payable if you paid the premium annually, less the annual deduction for administrative costs. See “Deductions and Charges” for more information.

The Policy includes no provisions for explicit deductions or charges for the cost of insurance, but this cost is reflected in the table of Cash Values at the front of the Policy and in the table of net single premiums we use to determine the variable insurance amount. The variable insurance amount is used to calculate both the Death Benefit and the Cash Value. The cost of insurance is based on factors including but not limited to the Insured’s Attained Age, the 1980 CSO Mortality Table and the net insurance amount at risk. The net insurance amount at risk is the Death Benefit minus the sum of the Cash Value and any Policy Debt. The rates shown in the table may not be representative of the charge a particular Owner may pay. The amount you pay for the cost of insurance is effectively reduced by the dividends, if any, we currently pay on your Policy. You may ask your Financial Representative for the current dividend amount. Future dividends are not guaranteed. (See “Annual Dividends”).

The charge is applied to the Policy Debt. The charge shown is a loan interest spread that is deducted from the Invested Assets. We add unpaid interest to the amount of the loan. Interest on a Policy loan accrues and is payable on a daily basis at an annual effective rate of 8% or an alternative variable rate based on a bond yield index. The amount of the Policy loan will be transferred from the Divisions to our General Account and credited on a daily basis with an annual earnings rate equal to the Policy loan interest rate less the charge shown.

⁴

The charges shown in the table may not be representative of the charge that a particular Owner may pay. The charge does not vary by sex. Generally, the charge increases for older Issue Ages. In addition, higher rates may apply to substandard underwriting classifications. The charge for the Waiver of Premium Benefit is less for Extra Ordinary Life Policies than for Whole Life Policies, all other factors being equal.

⁵	The maximum benefit amount is $100,000. The charges shown in the table may not be representative of the charge that a particular Owner may pay. The charge does not vary by sex. The charge increases for older Issue Ages.


4		Variable Life Prospectus

Extra Ordinary Life Policy


Charge	When Charge is Deducted	Maximum Amount Deducted	Current Amount Deducted
Charge for Mortality and Expense Risks	Daily	Annual rate of .50% of the Separate Account Assets	Annual rate of .50% of the Separate Account Assets
Charge for Federal Income Taxes	Daily	A rate which reflects that portion of our actual tax expenses which is fairly allocable to the Policies	Annual rate of .05% of the Separate Account Assets
Cost of Insurance	Calculated at least annually on the Policy Anniversary	Same as current amount, without the current dividend	Maximum: $1,000 per $1,000 of net amount at risk (Attained Age 99)¹ Minimum: $0.85 per $1,000 of net amount at risk (Attained Age 15 female)¹ Representative: $21.06 per $1,000 of net amount at risk (Attained Age 63 male)
Charge for Mortality and Expense Risks and Expenses for Loans²	Daily	Annual rate of 1.00% of the borrowed amount	When the Insured is Attained Age 99 and below: Annual rate of 0.85% of the borrowed amount; When the Insured is Attained Age 100 and above: Annual rate of 0.30% of the borrowed amount
Charge for Dividends³	Annually, on the Policy Anniversary	Same as current amount	Maximum: 17% of the gross annual premium⁴
Extra Premium for Extra Life Protection (after the expiry of the guaranteed period)	Annually, after the expiry of the guaranteed period, on the Policy Anniversary⁵	Maximum: $1,000 per $1,000 of term insurance, without the current dividend Minimum: $6.27 per $1,000 of term insurance, without the current dividend	Maximum: $283.64 per $1,000 of term insurance⁶ (Attained Age 99 male standard) Minimum: $1.93 per $1,000 of term insurance⁶ (Attained Age 52 female select) Representative: $5.11 per $1,000 of term insurance⁶ (Attained Age 62 male select)
Charge for Administrative Costs	Annually, on the Policy Anniversary	$35	$35
Charge for Death Benefit Guarantee	Annually, on the Policy Anniversary	1 ¹⁄₂% of the basic premium⁷	1¹⁄₂% of the basic premium⁷
Waiver of Premium Benefit⁸	Annually, on the Policy Anniversary, if this benefit is attached to your Policy and the Attained Age is less than 65	Same as current amount	Maximum: $1.48 per $1,000 of face amount (Issue Age 48) Minimum: $0.10 per $1,000 of face amount (Issue Age 15) Representative: $0.24 per $1,000 of face amount (Issue Age 35)
Additional Purchase Benefit⁹	Annually, on the Policy Anniversary, if this benefit is attached to your Policy and the Attained Age is less than 40	Same as current amount	Maximum: $2.21 per $1,000 of Additional Purchase Benefit (Issue Age 38)⁹ Minimum: $1.06 per $1,000 of Additional Purchase Benefit (Issue Age 15)⁹ Representative: $1.33 per $1,000 of Additional Purchase Benefit (Issue Age 25)⁹

³	This charge will vary by Issue Age of the Insured.

⁴	The charge for dividends is approximately 7% to 17% of the gross annual premium.


Variable Life Prospectus			5

⁵

After the guaranteed period expires, if the sum of positive variable insurance amount plus the paid-up additions is less than the initial amount of Extra Life Protection, we may reduce the amount of term insurance for the Policy Year. Alternatively, you may choose to have the coverage maintained by paying a larger premium based on the term insurance rates described here. Your right to continue to purchase term insurance on this basis will terminate as of the first Policy Anniversary when you fail to pay the additional premium when due.

⁶	Estimated year-end dividends have the effect of reducing the term insurance amounts on which the charges are based.

⁷	The basic premium for a Policy is the gross premium which would be payable if you paid the premium annually, less the annual deduction for administrative costs. See “Deductions and Charges” for more information.

⁸

The charges shown in the table may not be representative of the charge that a particular Owner may pay. The charge does not vary by sex. Generally, the charge increases for older Issue Ages. In addition, higher rates may apply to substandard underwriting classifications. The charge for the Waiver of Premium benefit is less for Extra Ordinary Life Policies than for Whole Life Policies, all other factors being equal.

⁹	The maximum benefit amount is $100,000. The charges shown in the table may not be representative of the charge that a particular Owner may pay. The charge does not vary by sex. The charge increases for older Issue Ages.

Single Premium Life Policy


Charge	When Charge is Deducted	Maximum Amount Deducted	Current Amount Deducted
Charge for Mortality and Expense Risks	Daily	Annual rate of .50% of the Separate Account assets	Annual rate of .50% of the Separate Account assets
Charge for Federal Income Taxes	Daily	A rate which reflects that portion of our actual tax expenses which is fairly allocable to the Policies	Annual rate of .05% of the Separate Account assets
Cost of Insurance	Calculated at least annually on the Policy Anniversary	Same as current amount, without the current dividend	Maximum: $1,000 per $1,000 of net amount at risk (Attained Age 99)¹ Minimum: $0.69 per $1,000 of net amount at risk (Attained Age 10 female)¹ Representative: $25.42 per $1,000 of net amount at risk (Attained Age 65 male)
Charge for Mortality and Expense Risks and Expenses for Loans²	Daily	Annual rate of 1.00% of the borrowed amount	When the Insured is Attained Age 99 and below: Annual rate of 0.85% of the borrowed amount; When the Insured is Attained Age 100 and above: Annual rate of 0.30% of the borrowed amount

Annual Portfolio Operating Expenses

The table below shows the range (minimum and maximum) of total operating expenses, including investment advisory fees, distribution fees (if applicable) and other expenses of the Portfolios that you may pay periodically during the time you own the Policy. The first line of this table lists expenses that do not reflect fee waivers or expense limits and reimbursements, nor do they reflect short-term trading redemption fees, if any, charged by the Portfolios. The information is based on operations for the year ended December 31, 2019. Fees are deducted from, and expenses are paid out of, the assets of the Portfolios that are described in the prospectuses for the Funds. More details concerning these fees and expenses are contained in the attached prospectuses for the Funds.


	Minimum			Maximum
Range of Total Annual Portfolio Operating Expenses (expenses include investment advisory fees, distribution (12b-1) fees, and other expenses as a percentage of average Portfolio assets)		0.21	%		1.43	%
Range of Total Annual Portfolio Operating Expenses After Contractual Fee Waiver or Reimbursement*		0.20	%		1.25	%

The “Range of Total Annual Portfolio Operating Expenses After Contractual Fee Waiver or Reimbursement” line in the above table shows the minimum and maximum fees and expenses charged by all of the Portfolios after taking into account contractual fee waiver or reimbursement arrangements in place. Those contractual arrangements are designed to reduce Total Annual Portfolio Operating Expenses and will continue for at least one year from the date of this prospectus. For more information about which Portfolios currently have such contractual reimbursement or fee waiver arrangements in place, see the prospectuses of the underlying Funds.

For more information about voluntary fee waivers that may be in place, see the “Deductions and Charges” section.


6		Variable Life Prospectus

The Company

The Northwestern Mutual Life Insurance Company is a mutual life insurance company organized by a special act of the Wisconsin Legislature in 1857. It is licensed to conduct a conventional life insurance business in the District of Columbia and in all states of the United States. The total assets of Northwestern Mutual were over $290 billion as of December 31, 2019. The Home Office of Northwestern Mutual is located at 720 East Wisconsin Avenue, Milwaukee, Wisconsin 53202.

“Northwestern Mutual,” “Company,” “we,” “us,” and “our” in this prospectus mean The Northwestern Mutual Life Insurance Company.

General Account assets are used to guarantee the payment of certain benefits under the Policies, including death benefits. To the extent that we are required to pay you amounts under these benefits that are in addition to Invested Assets in the

Separate Account, such amounts will come from General Account assets. Thus, Owners must look to the strength of the Company and its General Account with regard to guarantees under the Policies. The General Account is exposed to the risks normally associated with the operation of a life insurance company, including insurance pricing, asset liability management and interest rate risk, operational risks, and the investment risks of a portfolio of securities that consists largely, though not exclusively, of fixed-income securities. Some of the risks associated with such a portfolio include interest rate, option, liquidity, and credit risk. The financial statements contained in the Statement of Additional Information include a further discussion of risks inherent within the General Account investments. The assets in the General Account are subject to the claims of the Company’s general creditors.

The Separate Account

We established the Separate Account by action of our Trustees on November 23, 1983, in accordance with the provisions of Wisconsin insurance law. The Separate Account is registered with the SEC as a unit investment trust under the Investment Company Act of 1940 (the “1940 Act”). We own the assets in the Separate Account and we are obligated to pay all benefits under the Policies. We may use the Separate Account to support other variable life insurance policies we issue. We have divided the Separate Account into Divisions, each of which invests in shares of one Portfolio of the Funds.

Under Wisconsin law, Separate Account assets are held separate from our other assets and are not part of our General Account. Income, gains, and losses, whether or not realized, from assets allocated to the Separate Account will be credited to or charged against the Separate Account without regard to our other income, gains, or losses. Income, gains, and losses credited to, or charged against, a Division reflect that Division’s own investment performance and not the investment performance of our other assets. We may not use the Separate Account’s assets to pay any of our liabilities other than those arising from the Policies and any other variable life insurance Policies funded by the Separate Account. We may, however, use all of our assets (except those held in certain other separate accounts) to satisfy our obligations under your Policy.

Where permitted by law and subject to any required regulatory approvals or votes by Owners, we reserve the right to:

•

operate the Separate Account or a Division either as a unit investment trust or a management investment company under the 1940 Act, or in any other form permitted by law, if deemed by the Company to be in the best interest of Owners;

•

invest current and future assets of a Division in securities of another Portfolio as a substitute for shares of a Portfolio

(or another share class of an existing Portfolio) already purchased or to be purchased;

•

transfer cash from time to time between the General Account and the Separate Account as deemed necessary or appropriate and consistent with the terms of the Policy, including but not limited to transfers for the deduction of charges and in support of payment options;

•

on behalf of the Company, transfer assets of the Separate Account in excess of reserve requirements (only for accrued fees and charges or any seed capital) applicable to the Policies supported by the Separate Account to the General Account (Invested Assets remaining in the Separate Account necessary to fulfill its obligations under the Policy are not subject to claims against or losses in the General Account);

•

create new separate accounts;

•

add, delete or make changes to the securities and other assets held or purchased by the Separate Account;

•

restrict or eliminate any voting rights of Owners or other persons having voting rights as to the Separate Account; and

•

make any changes to the Separate Account to conform with, or required by any change in, federal tax law, the 1940 Act and regulations promulgated thereunder, or any other applicable federal or state laws.

In the event that we take any of these actions, we may make an appropriate endorsement of your Policy and take other actions necessary to comply with applicable law.


Variable Life Prospectus			7

The Funds

A variety of investment options are made available under the Policy for the allocation of your premiums. However, the Company does not endorse or recommend any particular option, nor does it provide investment advice. You are responsible for choosing your investment options and should make your choices based on your individual situation and risk tolerances. After making your initial allocation decisions, you should monitor your allocations and periodically review the options you select and the amounts allocated to each to ensure your selections continue to be appropriate. The amounts you invest in a particular Division are not guaranteed and, because both principal and any return on the investment are subject to market risk, you can lose money.

The assets of each Division are invested in a corresponding Portfolio that is a series of one of the following mutual funds: Northwestern Mutual Series Fund, Inc.; Fidelity^® Variable Insurance Products; Neuberger Berman Advisers Management Trust; Russell Investment Funds; and Credit Suisse Trust. The Separate Account buys shares of the Portfolios at their respective net asset values without sales charge. The Portfolios are available for investment only by separate accounts supporting variable insurance products and are not publicly traded. Their performance can differ substantially from publicly traded mutual funds with similar names. The specific Portfolios available under your Policy may change from time to time, and not all Portfolios in which assets of the Separate Account are invested may be available under your Policy. Your ability to invest in a Portfolio may be affected by the actions of such Portfolio, such as when a Portfolio closes.

The investment objectives of each Portfolio are set forth below. There is no assurance that any of the Portfolios will

achieve its stated objective(s). You can find more detailed information about the Portfolios, including a description of each Portfolio, in the attached Portfolio prospectuses. Read the prospectuses for the Portfolios carefully before investing. Please see the prospectuses for the Portfolios for a discussion of the potential risks and conflicts presented by the use of a Portfolio as an investment option under variable annuity contracts and variable life insurance policies offered by affiliated and non-affiliated life insurance companies. Note: If you received a summary prospectus for a Portfolio listed below, please follow the directions on the first page of the summary prospectus to obtain a copy of the full fund prospectus.

Northwestern Mutual Series Fund, Inc. (the “Series Fund”)

The principal investment adviser for the Portfolios of the Series Fund is Mason Street Advisors, LLC (“MSA”), our wholly-owned company. The investment advisory agreements for the respective Portfolios provide that MSA will provide services and bear certain expenses of the Series Fund. MSA employs a staff of investment professionals to manage the assets of the Series Fund and the other advisory clients of MSA. We provide related facilities and personnel, which MSA uses in performing its investment advisory functions. MSA has retained and oversees a number of asset management firms under investment sub-advisory agreements to provide day-to-day management of the Portfolios indicated below. Each such sub-adviser may be replaced without the approval of shareholders. Please see the attached prospectuses for the Series Fund for more information.


Portfolio	Investment Objective	Sub-adviser (if applicable)
Growth Stock Portfolio	Long-term growth of capital; current income is a secondary objective	T. Rowe Price Associates, Inc.
Focused Appreciation Portfolio	Long-term growth of capital	Loomis, Sayles & Company, L.P.
Large Cap Core Stock Portfolio	Long-term growth of capital and income	Wellington Management Company LLP
Large Cap Blend Portfolio	Long-term growth of capital and income	Fiduciary Management, Inc.
Index 500 Stock Portfolio	Investment results that approximate the performance of the Standard & Poor’s 500^® Composite Stock Price Index	N/A
Large Company Value Portfolio	Long-term capital growth; income is a secondary objective	American Century Investment Management, Inc.
Domestic Equity Portfolio	Long-term growth of capital and income	Delaware Investments Fund Advisers, a series of Macquarie Investment Management Business Trust
Equity Income Portfolio	Long-term growth of capital and income	T. Rowe Price Associates, Inc.
Mid Cap Growth Stock Portfolio	Long-term growth of capital	Wellington Management Company LLP
Index 400 Stock Portfolio	Investment results that approximate the performance of the S&P MidCap Stock Price 400^® Index	N/A


8		Variable Life Prospectus


Portfolio	Investment Objective	Sub-adviser (if applicable)
Mid Cap Value Portfolio	Long-term capital growth; current income is a secondary objective	American Century Investment Management, Inc.
Small Cap Growth Stock Portfolio	Long-term growth of capital	Wellington Management Company LLP
Index 600 Stock Portfolio	Investment results that approximate the performance of the Standard & Poor’s SmallCap 600^® Index	N/A
Small Cap Value Portfolio	Long-term growth of capital	T. Rowe Price Associates, Inc.
International Growth Portfolio	Long-term growth of capital	FIAM LLC
Research International Core Portfolio	Capital appreciation	Massachusetts Financial Services Company
International Equity Portfolio	Long-term growth of capital; any income realized may be incidental	Templeton Investment Counsel, LLC
Emerging Markets Equity Portfolio	Capital appreciation	Aberdeen Asset Managers Limited
Government Money Market Portfolio⁽¹⁾	Maximum current income to the extent consistent with liquidity and stability of capital	BlackRock Advisors, LLC
Short-Term Bond Portfolio	To provide as high a level of current income as is consistent with prudent investment risk	T. Rowe Price Associates, Inc.
Select Bond Portfolio	To provide as high a level of total return as is consistent with prudent investment risk; a secondary objective is to seek preservation of shareholders’ capital	Wells Capital Management, Inc.
Long-Term U.S. Government Bond Portfolio	Maximum total return, consistent with preservation of capital and prudent investment management	Pacific Investment Management Company LLC
Inflation Protection Portfolio	Pursue total return using a strategy that seeks to protect against U.S. inflation	American Century Investment Management, Inc.
High Yield Bond Portfolio⁽²⁾	High current income and capital appreciation	Federated Investment Management Company
Multi-Sector Bond Portfolio	Maximum total return, consistent with prudent investment management	Pacific Investment Management Company LLC
Balanced Portfolio	To realize as high a level of total return as is consistent with prudent investment risk, through income and capital appreciation	N/A
Asset Allocation Portfolio	To realize as high a level of total return as is consistent with reasonable investment risk	N/A

⁽¹⁾

Although the Government Money Market Portfolio seeks to preserve its value at $1.00 per share, it is possible to lose money by investing in the Government Money Market Portfolio. An investment in a money market portfolio is neither insured nor guaranteed by the Federal Deposit Insurance Corporation or any government agency. During extended periods of low interest rates, the yield of a money market portfolio may also become extremely low and possibly negative.

⁽²⁾	High yield bonds are commonly referred to as junk bonds.

Fidelity^® Variable Insurance Products

The Fidelity^® VIP Mid Cap Portfolio and the Fidelity^® VIP Contrafund^® Portfolio are series of Variable Insurance Products Fund III and the Variable Insurance Products Fund II, respectively. The Separate Account buys Initial Class shares of the Portfolios. The investment adviser for the Portfolios is the Fidelity Management & Research Company (FMR). The following affiliates of FMR also assist with foreign investments: Fidelity Management & Research (U.K.) Inc., Fidelity Management & Research (Hong Kong) Limited, and Fidelity Management & Research (Japan) Inc. (Please note that as a result of a transaction effected at or around May 1, 2020, some systems and forms may temporarily reference Service Class 2 shares of the Portfolio, which is no longer available under the Policy.)


Portfolio	Investment Objective	Sub-adviser
VIP Mid Cap Portfolio	Long-term growth of capital	FMR Co., Inc.
VIP Contrafund^® Portfolio	Long-term capital appreciation	FMR Co., Inc.


Variable Life Prospectus			9

Neuberger Berman Advisers Management Trust

The Neuberger Berman Advisers Management Trust Sustainable Equity Portfolio is a series of the Neuberger Berman Advisers Management Trust. The Separate Account buys Class I shares of the Portfolio, the investment adviser for which is Neuberger Berman Investment Advisers LLC.


Portfolio		Investment Objective
Sustainable Equity Portfolio		Long-term growth of capital by investing primarily in securities of companies that meet the Portfolio’s environmental, social and governmental criteria

Russell Investment Funds

The assets of each of the Portfolios comprising the Russell Investment Funds are invested by one or more investment management organizations researched and recommended by Russell Investment Management LLC (“RIM”). RIM is the investment adviser of the Russell Investment Funds.


Portfolio		Investment Objective
U.S. Strategic Equity Fund		Long-term growth of capital
U.S. Small Cap Equity Fund		Long-term growth of capital
Global Real Estate Securities Fund		Current income and long-term growth of capital
International Developed Markets Fund		Long-term growth of capital
Strategic Bond Fund		Provide total return
LifePoints^® Variable Target Portfolio Series Moderate Strategy Fund		Current income and moderate long-term capital appreciation
LifePoints^® Variable Target Portfolio Series Balanced Strategy Fund		Above-average long-term capital appreciation and a moderate level of current income
LifePoints^® Variable Target Portfolio Series Growth Strategy Fund		High long-term capital appreciation; and as a secondary objective, current income
LifePoints^® Variable Target Portfolio Series Equity Growth Strategy Fund		High long-term capital appreciation

Credit Suisse Trust

The Commodity Return Strategy Portfolio is a series of Credit Suisse Trust. The Separate Account buys Class 2 shares of the Portfolio, the investment adviser for which is Credit Suisse Asset Management, LLC. (Please note that as a result of a transaction effected at or around May 1, 2020, some systems and forms may temporarily reference Class 1 shares of the portfolio, which is no longer available under the Policy.)


Portfolio		Investment Objective
Commodity Return Strategy Portfolio		Total Return

Payments We Receive

The Policy makes available both proprietary and non-proprietary Portfolios. The Series Fund is a proprietary Fund that has been included in part because it is managed by a subsidiary of the Company. For non-proprietary Portfolios offered through this Policy, we consider during the selection process whether a Portfolio’s investment adviser or an affiliate will make payments to us or our affiliates. Other factors we consider during the selection process include asset class coverage, management style, sector coverage, the strength of the investment adviser’s or sub-adviser’s reputation and tenure, brand recognition, performance, and the capability and qualification of each investment firm. We review the Portfolios periodically and may remove a Portfolio or limit its availability to new premiums and/or transfers of accumulated

amounts if we determine that the Portfolio no longer meets one or more of the selection criteria, and/or if the Portfolio has not attracted significant allocations from Owners.

We do not provide any investment advice and do not recommend or endorse any particular Portfolio. You bear the risk of any decline in the Policy Value of your Policy resulting from the performance of the Portfolios you have chosen.

Owners, through their indirect investment in the Portfolios, bear the costs of the investment advisory or management fees that the Portfolios pay to their respective investment advisors (see the Portfolios’ prospectuses for more information). As described above, an investment adviser of a Portfolio, or its


10		Variable Life Prospectus

affiliates, may make payments to the Company and/or certain of our affiliates. However, the amount of such payments is not determinative as to whether a Portfolio is available through the Policy. These payments may be derived, in whole or in part, from the advisory fee deducted from Portfolio assets. The amount of the compensation is based on a percentage of assets of the Portfolios attributable to the Policies and certain other variable insurance products that the Company issues. The percentages differ and some investment advisers (or other affiliates) may pay more than others. The percentages currently range up to 0.25%. These payments are made for various purposes, including payment of services incurred by the Company and/or its affiliates in promoting and marketing the Policies and Portfolios. The Company and its affiliates may profit from these payments.

While not currently the case, certain Portfolios available under the Policy may adopt a Distribution (and/or Shareholder

Servicing) Plan under Rule 12b-1 of the 1940 Act, which is described in more detail in the Portfolios’ prospectuses. These payments, which may be up to 0.25%, would be deducted from assets of the Portfolios and are paid to our distributor, Northwestern Mutual Investment Services, LLC. These payments would decrease such Portfolio’s investment return. We would also consider the receipt of these payments generally to be a positive factor when selecting Portfolios.

Additionally, an investment adviser or sub-adviser of a Portfolio (or of an underlying fund in which a Portfolio invests) or its affiliate may provide the Company with wholesaling services that assist in the distribution of the Policies and may pay the Company and/or certain of our affiliates amounts to participate in sales meetings. These amounts may be significant and may provide the investment adviser or sub-adviser (or their affiliate) with increased access to persons involved in the distribution of the Policies.

Information About the Policies

We are no longer issuing these Policies.

This prospectus describes the material provisions of the Policies. You should consult your Policy for more information about its terms and conditions, and for any state specific variations that may apply to your Policy.

Premiums

For Whole Life Policies and, except as explained below, for Extra Ordinary Life Policies, premiums are level, fixed and payable in advance during the Insured’s lifetime on a monthly, quarterly, semiannual or annual basis. You may change the premium frequency. The change will be effective when we accept the premium on the new frequency. The amount of the premium depends on the amount of insurance for which the Policy was issued and the Insured’s age and underwriting classification. The amount of the premium also reflects the sex of the Insured except where state or federal law requires that premiums and other charges and values be determined without regard to sex. We send a notice to the Owner not less than two weeks before each premium is due. If you select the monthly premium frequency, we may require that you make Premium Payments through an automatic payment plan arranged with your bank.

Premiums you pay other than on an annual basis are increased to (1) reflect the time value of money, based on a 12% interest rate, and (2) cover the administrative costs to process the additional Premium Payments. You may obtain information from your Northwestern Mutual Financial Representative about annual percentage rate (APR) calculations for premiums paid other than annually. The APR calculation is also available through www.northwesternmutual.com.

Premium added to the Separate Account will increase your Policy Value according to a formula specified in your Policy that takes into account certain actuarially determined values and the 1980 CSO mortality tables.

If the Insured dies after payment of the premium for the period which includes the date of death, we will refund the portion of the premium for the remainder of that period as part of the Policy proceeds.

You may send Premium Payments to our Home Office or to a payment center designated by us. All payments must be made in U.S. Dollars payable through a U.S. financial institution. We accept Premium Payments by check or electronic funds transfer (“EFT”). We generally will not accept cash, money orders, traveler’s checks or “starter” checks; however, in limited circumstances, we may accept some cash equivalents in accord with our anti-money laundering procedures. If you make a Premium Payment with a check or bank draft and, for whatever reason, it is later returned unpaid or uncollected, or if a Premium Payment by EFT is reversed, we reserve the right to reverse the transaction. If mandated under applicable law, we may be required to reject a Premium Payment. We may also be required to provide information about you and your account to government regulators.

We accept Premium Payments via our website if eligible. Electronic payments via our website must be made in accordance with our current procedures. However, we are not required to accept electronic payments, and we will not be responsible for losses resulting from transactions based on unauthorized electronic payments, provided we follow procedures reasonably designed to verify the authenticity of electronic payments. For more information on electronic payments see “Owner Inquiries.” We reserve the right to limit, modify, suspend or terminate the ability to make payments via our website at any time. Although we do not anticipate delays in our receipt and processing of premiums, we may experience such delays to the extent premiums are not received at our Home Office on a timely basis. Such delays could result in delays in the allocation of premiums.


Variable Life Prospectus			11

Whole Life Policy The following table for Whole Life Policies shows representative premiums for male select, standard plus, and standard risks for various face amounts of insurance. Premiums you pay other than on an annual basis are increased to (1) reflect the time value of money, based on

a 12% interest rate and (2) cover the administrative costs associated with additional Premium Payments. For example, two semi-annual payments will total more than an annual premium payment.


Age at Issue	Face Amount		Annual Premium		Monthly Premium		Annual Sum of Monthly Premiums^*		Annual Sum of Monthly Premiums Minus the Annual Premium
		SELECT
15	$	50,000	$	382.50	$	33.60	$	403.20	$	20.70
35		100,000		1,536.00		135.10		1,621.20		85.20
55		100,000		3,766.00		331.10		3,973.20		207.20
		STANDARD PLUS
15	$	50,000	$	406.00	$	35.60	$	427.20	$	21.20
35		100,000		1,683.00		148.10		1,777.20		94.20
55		100,000		4,125.00		363.10		4,357.20		232.20
		STANDARD
15	$	50,000	$	491.50	$	43.10	$	517.20	$	25.70
35		100,000		1,912.00		168.10		2,017.20		105.20
55		100,000		4,587.00		404.10		4,849.20		262.20

^*	In some cases for policies with smaller premiums, the sum of 12 monthly premiums may be less than the sum of other periodic premium amounts due to lower administrative costs.

Extra Ordinary Life Policy The following table for Extra Ordinary Life Policies shows representative annual premiums for male select, standard plus and standard risks for various amounts of insurance. Premiums you pay other than on an annual basis are increased to (1) reflect the time value of money, based on a 12% interest rate and (2) cover the administrative costs associated with additional Premium Payments. For example, two semi-annual payments will total

more than an annual premium payment. The amounts of insurance shown in the table are the total amounts in effect when the Extra Ordinary Life Policy is issued, including both the guaranteed minimum death benefit noted in your Policy (“Minimum Death Benefit”), which we guarantee for the lifetime of the Insured, and the Extra Life Protection, which we guarantee for a shorter period. (See “Death Benefit” and “Extra Ordinary Life Policy”).


Age at Issue	Face Amount		Annual Premium		Monthly Premium		Annual Sum of Monthly Premiums^*		Annual Sum of Monthly Premiums Minus the Annual Premium
		SELECT
15	$	50,000	$	261.50	$	23.10	$	277.20	$	15.70
35		100,000		1,014.00		89.10		1,069.20		55.20
55		100,000		2,612.00		230.10		2,761.20		149.20
		STANDARD PLUS
15	$	50,000	$	285.00	$	25.10	$	301.20	$	16.20
35		100,000		1,161.00		102.10		1,225.20		64.20
55		100,000		2,971.00		261.10		3,133.20		162.20
		STANDARD
15	$	50,000	$	357.50	$	31.60	$	379.20	$	21.70
35		100,000		1,377.00		121.10		1,453.20		76.20
55		100,000		3,425.00		301.10		3,613.20		188.20

^*	In some cases for policies with smaller premiums, the sum of 12 monthly premiums may be less than the sum of other periodic premium amounts due to lower administrative costs.

Single Premium Life Policy The Single Premium Life Policy was available only for applicants who met select or standard plus underwriting criteria as we determined. The premiums for these Policies are the same for both select and standard plus risks, but we expect that the dividends will be lower for Policies issued to Insureds in the standard plus classification.

The following table for Single Premium Life Policies shows representative gross single premiums for male select and standard plus risks for various face amounts of insurance:


Age at Issue	Face Amount of Insurance		Gross Single Premium
15	$	10,000	$	1,498.40
35		25,000		6,443.25
55		50,000		23,502.00

Grace Period

For the Whole Life and Extra Ordinary Life Policies there is a grace period of 31 days for any premium that is not paid when due. The Policy remains in force during this period. If you do not pay the premium within the grace period, the Policy will


12		Variable Life Prospectus

terminate as of the date when the premium was due and will no longer be in force, unless it is continued as extended term or paid-up insurance (see “Extended Term and Paid-Up Insurance”), or the Automatic Premium Loan provision is currently in effect (see “Policy Loans and Automatic Premium Loans”) to pay any overdue premiums and the premium due is less than the maximum amount allowable. If the Insured dies during the grace period we will deduct any overdue premium from the proceeds of the Policy. If the Insured dies after payment of the premium for the period which includes the date of death, we will refund the portion of the premium for the remainder of that period as part of the Policy proceeds.

Please note that in recognition of the possible financial challenges posed by the current public health (coronavirus COVID-19) crisis, if your Policy enters its grace period between March 1, 2020 and June 1, 2020, the grace period will be 90 days (or longer if mandated by your state) even if the terms of your Policy has a shorter period. Additional extensions of your Policy’s grace period, or the June 1, 2020 end date, may apply in the future but are not guaranteed.

Premium Repayment Program

Please note that the Company has established a limited Premium repayment program (the “Program”) in response to one or more states requiring the deferral of premium payments in certain circumstances for those policyowners who are unable to pay due to financial hardship caused by the COVID-19 crisis. In limited circumstances involving premiums past due (e.g., payments necessary to reinstate your Policy, to prevent lapse or to maintain your death benefit guarantee), the Company may credit appropriate past due premium payments on your behalf, such amounts to be repaid to the Company in monthly installments. Policy Owners who participate in the Program are subject to its rules and requirements, which may include, without limitation, Policy Owners agreeing to a repayment schedule in writing and certifying that amounts deferred under the Program could not be paid due to a financial hardship caused by COVID-19. The Company does not currently charge interests on amounts advanced under the Program but may do so in the future, such interest not to exceed a rate of 8% on amounts deferred. Premiums added to your Policy under the Program will be in amounts and at a time appropriate to cover premium past due obligations, assuming we have all the required paperwork in Good Order necessary to process such amounts. Inability to repay the Company for amounts paid on behalf of an Owner under the Program may result in denial of access to the Program, reductions of your Policy’s value (or to the extent allowable by applicable law deductions from any benefit payments, premium refunds or other payments otherwise payable from the Company) to cover amounts owed the Company under the Program, and/or the future lapse or loss of any guarantees that require minimum premiums no longer eligible to be paid by the Company under the Program. Certain aspects of the Program may not be available in every state. Please contact the Company at 1-866-424-2609 for further information.

Allocating Premiums to the Separate Account

We place the net annual premium for a Whole Life Policy or an Extra Ordinary Life Policy in the Separate Account on the Policy Date and on the Policy Anniversary each year. The net annual premium is the annual premium less the deductions. See “Deductions and Charges” for more information.

You determine how the net annual premium for a Whole Life or an Extra Ordinary Life Policy is apportioned among the Divisions. If you direct any portion of a premium to a Division, the Division must receive at least 1% of that premium. You may change the apportionment for future premiums by written request at any time, but the change will be effective only when we place the net annual premium in the Separate Account on the next Policy Anniversary, even if you are paying premiums other than on an annual basis. Under certain circumstances in accordance with our procedures your Financial Representative may provide us with instructions on your behalf involving the allocation of amounts among available Divisions, subject to our rules and requirements, including the restrictions on short-term and excessive trading.

Eligible Owners may also submit allocation requests via the Variable Life Service Center at 1-866-424-2609 or via our website at www.northwesternmutual.com (“Electronic Instructions”) in accordance with our then-current procedures for Electronic Instructions provided you have properly authorized us to accept Electronic Instructions in advance of your request. For more information see “Owner Inquiries.” However, we are not required to accept Electronic Instructions, and we will not be responsible for losses resulting from transactions based on unauthorized Electronic Instructions, provided we follow procedures reasonably designed to verify the authenticity of Electronic Instructions. We reserve the right to limit, modify, suspend or terminate the ability to make requests via Electronic Instructions.

For a Single Premium Policy we placed the entire single premium, less an administrative charge of $150, in the Separate Account on the Policy Date, and we apportioned the amount among the Divisions as you determined.

You may apportion the Separate Account assets supporting your Policy among as many as six Divisions at any time.

Transfers Between Divisions Subject to the short-term and excessive trading limitations described below, you may transfer accumulated amounts from one Division to another so long as you are invested in no more than six Divisions at a time. Transfer requests will be effective after our receipt of your request in Good Order at our Home Office. If we receive your request for transfer before the close of trading (typically, 4:00 p.m. Eastern Time) on the NYSE, we will deem your request to be received and effective that day. If we receive your request for transfer on or after the close of trading on the NYSE, we will deem your request to be received and effective on the next regular trading session of the NYSE. If your request is not in Good Order, either we or your Financial Representative may notify you in writing, by telephone or by email in an effort to conform your request to our then-current requirements.


Variable Life Prospectus			13

In order to take full advantage of these features, you should carefully consider, on a continuing basis, which investment options are best suited to your long-term investment needs. Although no fee is presently charged, we reserve the right where allowed by state law to charge a fee that will cover the administrative costs of transfers. In addition, certain Portfolios in which the Divisions invest may impose redemption fees. These fees are described in the Portfolios’ prospectuses. Transfer requests must be in amounts greater than or equal to 1% of Invested Assets or the request will not be processed. When a transfer is made from any Division, the resulting allocation of Invested Assets must be in whole percentages in all Divisions that have any Invested Assets as a result of the transfer. Under certain circumstances in accordance with our procedures your Financial Representative may provide us with instructions on your behalf involving the transfer of accumulated amounts among available Divisions, subject to our rules and requirements, including the restrictions on short-term and excessive trading discussed below.

You may request the transfer in writing at our Home Office, via the Variable Life Service Center at 1-866-424-2609 or, if eligible, via our website at www.northwesternmutual.com. The submission of transfer instructions by telephone or through our website (“Electronic Instructions”) must be made in accordance with our current procedures for Electronic Instructions and you must properly authorize us to accept Electronic Instructions in advance of your request. For more information see “Owner Inquiries.” However, we are not required to accept Electronic Instructions, and we will not be responsible for losses resulting from transactions based on unauthorized Electronic Instructions, provided we follow procedures reasonably designed to verify the authenticity of Electronic Instructions. We reserve the right to limit, modify, suspend or terminate the ability to make transfers via Electronic Instructions.

Short-Term and Excessive Trading Short-term and excessive trading (sometimes referred to as “market timing”) may present risks to a Portfolio’s long-term investors, such as Owners and other persons who may have material rights under the Policy (e.g., beneficiaries), because it can, among other things, disrupt Portfolio investment strategies, increase Portfolio transaction and administrative costs, require higher than normal levels of cash reserves to fund unusually large or unexpected redemptions, and adversely affect investment performance. These risks may be greater for Portfolios that invest in securities that may be more vulnerable to arbitrage trading, including foreign securities and thinly traded securities, such as small cap stocks and non-investment grade bonds. These types of trading activities also may dilute the value of long-term investors’ interests in a Portfolio if it calculates its net asset value using closing prices that are no longer accurate. Accordingly, we discourage market timing activities.

To deter short-term and excessive trading, we have adopted and implemented policies and procedures which are designed to control abusive trading practices. We seek to apply these policies and procedures uniformly to all Owners. Any exceptions must be either expressly permitted by our policies and procedures or subject to an approval process described in

them. We may also be prevented from uniformly applying these policies and procedures under applicable state or federal law or regulation. Because exceptions are permitted, it is possible that investors may be treated differently and, as a result, some may be allowed to engage in trading activity that might be viewed as market timing.

Among the steps we have taken to reduce the frequency and effect of these practices are monitoring trading activity and imposing trading restrictions, including the prohibition of more than twelve transfers among Divisions under a single Policy during a Policy Year. Multiple transfers with the same effective date made by the same Owner will be counted as a single transfer for purposes of applying the twelve transfer limitation. Further, an investor who is identified as having made a transfer in and out of the same Division, excluding the Government Money Market Division, (“round trip transfer”) in an amount in excess of $10,000 within fourteen calendar days will be restricted from making additional transfers after making two more such round trip transfers within any Policy Year, including the year in which the first such round trip transfer was made. The restriction will last until the next Policy Anniversary and the Policy Owner will be sent a letter informing him or her of the restriction. An Owner who is identified as having made one round trip transfer within thirty calendar days aggregating more than one percent (1%) of the total assets of the Portfolio underlying a Division, excluding the Government Money Market Division and the Divisions corresponding to the Portfolios of the Russell Investment Funds LifePoints^® Variable Target Portfolio Series, will be restricted from making additional transfers after making one more such round trip transfer within any Policy Year, including the year in which the first such round trip transfer was made. The restriction will last until the next Policy Anniversary and the Policy Owner will be sent a letter informing him or her of the restriction. Unless we believe your trading behavior to be inconsistent with these short-term and excessive trading policies, these limitations will not apply to automatic asset transfers, scheduled or systematic transactions involving portfolio rebalancing, dollar cost averaging, initial allocations or changes in future allocations, to the extent these features are available under your Policy. Once a Policy is restricted, we will allow one additional transfer into the Government Money Market Division until the next Policy Anniversary. Additionally, in accordance with our procedures, we may modify some of these limitations to allow for transfers that would not count against the total transfer limit but only as necessary to alleviate any potential hardships to Owners (e.g., in situations involving a substitution of an underlying fund).

Policies such as yours (or other Policies supported by the Separate Account) may be purchased by a corporation or other entity as a means to informally fund the liabilities created by the entity’s employee benefit or similar plan. These Policies may be aggregately managed to match liabilities under such plans. Policies sold under these circumstances may be subject to special transfer restrictions. Namely, transactions involving portfolio rebalancing programs may be exempt from the twelve transfers per Policy year limitation where: (1) the purpose of the portfolio rebalancing program is to match the Policy to the entity’s employee benefit or similar plan; (2) the


14		Variable Life Prospectus

portfolio rebalancing program adequately protects against short-term or excessive trading; and (3) the portfolio rebalancing program is managed by a third party administrator that meets our requirements. We reserve the right to monitor or limit transactions involving portfolio rebalancing programs where we believe such transactions may be potentially harmful to a Portfolio.

We may change these policies and procedures from time to time in our sole discretion without notice; provided, however, Owners will be given advance, written notice if the policies and procedures are revised to accommodate market timing. Additionally, the Funds may have their own policies and procedures described in their prospectuses that are designed to limit or restrict frequent trading. Such policies may be different from our policies and procedures, and may be more or less restrictive. As the Funds may accept purchase payments from other investors, including other insurance company separate accounts on behalf of their variable product customers and retirement plans, we cannot guarantee that the Funds will not be harmed by any abusive market timing activity relating to the retirement plans and/or other insurance companies that may invest in the Funds. The Funds’ policies and procedures may provide for the imposition of a redemption fee and, upon request from the Fund, require us to provide transaction information to the Fund (including an Owner’s tax identification number) and to restrict or prohibit transfers and other transactions that involve the purchase of shares of a Portfolio. In the event a Fund instructs us to restrict or prohibit transfers or other transactions involving shares of a Portfolio, you may not be able to make additional purchases in a Division until the restriction or prohibition ends. If you submit a request that includes a purchase or transfer into such a restricted Division, we will consider the request “not in Good Order” and it will not be processed. You may, however, submit a new transfer request.

If we believe your trading activity is in violation of, or inconsistent with, our policies and procedures or otherwise is potentially disruptive to the interests of other investors, you may be asked to stop such activities, and future investments and allocations or transfers by you may be rejected without prior notice. Because we retain discretion to determine what action is appropriate in a given situation, investors may be treated differently and some may be allowed to engage in activities that might be viewed as market timing.

We intend to monitor events and the effectiveness of our policies and procedures in order to identify whether instances of potentially abusive trading practices are occurring. However, we may not be able to identify all instances of abusive trading practices, nor completely eliminate the possibility of such activities, and there may be technological limitations on our ability to impose restrictions on the trading practices of Owners.

Deductions and Charges

The Net Premiums we place in the Separate Account for Whole Life, Extra Ordinary Life and Single Premium Life Policies are the gross premiums after the deductions described in the next two sections below. The Net Premiums for Whole

Life and Extra Ordinary Life Policies exclude any extra premium we charge for Insureds who do not qualify as select risks and the extra premium for any optional benefits. We make a charge for mortality and expense risks against the assets of the Separate Account. There is also a charge for taxes. (See “Charges Against the Separate Account Assets”). In addition, the funds in which the Separate Account assets are invested pay an investment advisory fee and certain other expenses. (See “Fee and Expense Tables—Annual Portfolio Operating Expenses” and the attached Fund prospectuses.)

We may impose a fee for transfers that will not exceed our administrative costs associated with transfers. This fee is currently being waived.

You may have the option of receiving funds via wire transfer or priority mail. Currently, a fee of $25 is charged for wire transfers (up to $50 for international wires) and a $15 fee (up to $45 for next day, a.m. delivery) for priority mail. These fees are to cover our administrative costs or other expenses. We may discontinue the availability of these options at any time, with or without notice.

Deductions from Premiums for Whole Life and Extra Ordinary Life Policies The deductions described in this section are for Whole Life and Extra Ordinary Life Policies only. The deductions for Single Premium Life Policies are described under the next caption below.

For the first Policy Year there was a one-time deduction of not more than $5 for each $1,000 of insurance, based on the face amount for Whole Life or the Minimum Death Benefit stated in the Policy for Extra Ordinary Life. This was for the costs of processing applications, medical examinations, determining insurability and establishing records.

There is an annual deduction of $35 for administrative costs to maintain the Policy. Expenses include costs of premium billing and collection, processing claims, keeping records and communicating with Owners.

There is a deduction each year for sales costs. This amount may be considered a sales load. The deduction will be not more than 30% of the basic premium (as defined below) for the first Policy Year, not more than 10% for each of the next three years and not more than 7% each year thereafter. The basic premium for a Policy is the gross premium which would be payable if you paid the premium annually, less the annual deduction of $35 for administrative costs. The basic premium is based on the cost of insurance for Insureds who qualify as select risks and does not include any extra premium amounts for Insureds whom we place in other underwriting classifications. The basic premium does not include the extra premium for any optional benefits. For an Extra Ordinary Life Policy, the basic premium does not include any extra premium for the Extra Life Protection.

The amount of the deduction for sales costs for any Policy Year is not specifically related to sales costs we incur for that year. We expect to recover our total sales expenses from the amounts we deduct for sales costs over the period while the Policies are in force. To the extent that sales expenses exceed the amounts deducted, we will pay the expenses from our


Variable Life Prospectus			15

other assets. These assets may include, among other things, any gain realized from the charge against the assets of the Separate Account for the mortality and expense risks we assume. (See “Charges Against the Separate Account Assets”). To the extent that the amounts deducted for sales costs exceed the amounts needed, we will realize a gain.

We make a deduction equal to 2% of each basic premium for state premium taxes. Premium taxes vary from state to state and currently range from 0% to 3.5% of life insurance premiums. Some jurisdictions within a state may charge an additional premium tax in certain circumstances. The 2% rate is an average, and we charge the same percentage regardless of the state (or other jurisdiction) in which you live, which may be more or less than the total percentage charged by your state (and/or other jurisdiction) of residence.

Provided that all premiums are paid when due, we guarantee that the Death Benefit, before adjustments, for a Whole Life Policy will never be less than the face amount of the Policy, regardless of the investment experience of the Separate Account and that, for an Extra Ordinary Life Policy, the Death Benefit, before adjustments, will never be less than the Minimum Death Benefit stated in the Policy. For both Policies, there is a deduction equal to 1.5% of each basic premium to compensate us for the risk that the Insured may die at a point in time when the Death Benefit that would ordinarily be paid is less than this guaranteed minimum amount.

For an Extra Ordinary Life Policy there is a deduction for dividends. This deduction will vary by age of the Insured and duration of the Policy and we expect it to be in the range of approximately 7-17% of the gross annual premium. The deduction is in consideration of the Policy’s receipt of dividends that may be paid or credited in accordance with the dividend scale in effect on the issue date of the Policy. Dividends will be affected by, among other factors, whether the Policy includes a term insurance component. Future dividends are not guaranteed. (See “Annual Dividends”).

The following tables illustrate the amount of net annual premium, for select and standard risks, to be placed in the Separate Account at the beginning of each Policy Year after the deductions described above:

Whole Life


Beginning of Policy Year	Male Age 35—Select Risk Annual Premium
Beginning of Policy Year	$500		$1,000		$5,000
1	$	154.28	$	320.16	$	1,647.28
2 through 4		402.11		834.48		4,293.51
5 and later		416.05		863.41		4,442.36


Beginning of Policy Year	Male Age 35—Standard Risk Annual Premium
Beginning of Policy Year	$500		$1,000		$5,000
1	$	123.37	$	256.03	$	1,317.30
2 through 4		321.57		667.33		3,433.44
5 and later		332.71		690.46		3,552.48

Extra Ordinary Life


Beginning of Policy Year	Male Age 35—Select Risk Annual Premium
Beginning of Policy Year	$500		$1,000		$5,000
1	$	134.23	$	278.56	$	1,433.21
2 through 4		369.62		767.07		3,946.64
5 and later		383.58		796.05		4,095.74


Beginning of Policy Year	Male Age 35—Standard Risk Annual Premium
Beginning of Policy Year	$500		$1,000		$5,000
1	$	97.92	$	203.21	$	1,045.54
2 through 4		269.65		559.59		2,879.11
5 and later		279.83		580.73		2,987.88

Deductions for Single Premium Life Policies For a Single Premium Life Policy, the only deduction from the single premium was an administrative charge of $150. The administrative costs for issuing and maintaining a Single Premium Life Policy are similar to those we incur with a Whole Life Policy or an Extra Ordinary Life Policy, except for the costs of premium billing and collection. (See “Deductions from Premiums for Whole Life and Extra Ordinary Life Policies”). We placed the entire premium for a Single Premium Life Policy, after this deduction of $150, in the Separate Account when we issued the Policy without any of the other deductions which apply to premiums for Whole Life and Extra Ordinary Life Policies. There is no annual fee for a Single Premium Life Policy.

For a Single Premium Life Policy during the first ten Policy Years, the Cash Value payable on surrender of the Policy was reduced by a deduction for sales costs. The deduction during the first Policy Year was not more than 9% of the Policy’s tabular Cash Value. (See “Cash Value”). The deduction decreased over time until it was eliminated at the end of the tenth Policy Year. We intended the deduction to recover the costs we incurred in distributing Single Premium Life Policies which were surrendered in their early years. The deduction was never more than 9% of the single premium paid for the Policy, excluding the administrative charge of $150.

The following table illustrates the schedule for the decreasing deduction for sales costs for a policy surrendered at the end of each of the first ten Policy Years. The illustration is for a Single Premium Life Policy, male age 35. The schedule varies slightly by age and sex and amount of insurance.


Policy Year End When Policy Is Surrendered	Deduction as % of Tabular Cash Value
1		7.9	%
2		7.1
3		6.3
4		5.4
5		4.6
6		3.7
7		2.8
8		1.9
9		0.9
10 and subsequent years		0

Charges Against the Separate Account Assets There is a daily charge to the Separate Account for the mortality and expense risks that we have assumed. The charge is at the


16		Variable Life Prospectus

annual rate of .50% of the assets of the Separate Account. The mortality risk is that Insureds may not live as long as we estimated. The expense risk is that expenses of issuing and administering the Policies may exceed the estimated costs, including other costs such as those related to marketing and distribution. The actual mortality and expense experience under the Policies will be a factor used in determining dividends. (See “Annual Dividends”).

The Policies provide that we may make a charge for taxes against the assets of the Separate Account. Currently, we are making a daily charge for income taxes we incur at the annual rate of .05% of the assets of the Separate Account. We may increase, decrease or eliminate the charge for taxes in the future to reflect the portion of our actual tax expenses which is fairly allocable to the Policies.

Optional Benefits There is a separate charge for any optional benefit you have selected. (See “Other Policy Provisions—Optional Benefits”). For a Whole Life Policy, the Waiver of Premium Benefit has a maximum charge of $2.05 per $1,000 of face amount and a minimum charge of $0.13 per $1,000 of face amount. The Additional Purchase Benefit has a maximum charge of $2.21 per $1,000 of Additional Purchase Benefit and a minimum charge of $0.54 per $1,000 of Additional Purchase Benefit.

For an Extra Ordinary Life Policy, the Waiver of Premium Benefit has a maximum charge of $1.48 per $1,000 of face amount and a minimum charge of $0.10 per $1,000 of face amount. The Additional Purchase Benefit has a maximum charge of $2.21 per $1,000 of Additional Purchase Benefit and a minimum charge of $1.06 per $1,000 of Additional Purchase Benefit.

We will realize a gain from these charges to the extent they are not needed to provide benefits and pay expenses under the Policies, in which case the gain may be used for any Company purpose.

The investment performances of each Division reflects all expenses borne by the corresponding Portfolios. For certain Portfolios, certain expenses may have been reimbursed or fees may have been waived during 2019 in addition to any contractual fee waiver or reimbursements. It is anticipated that any such voluntary expense reimbursement and fee waiver arrangements would continue past the current year, although certain arrangements may be terminated at any time. After taking into account these arrangements, as well as any contractual fee waiver or expense reimbursement arrangements, Annual Portfolio Operating Expenses would have ranged from a minimum of 0.20% to a maximum of 1.25%. (See “Fee and Expense Tables—Annual Portfolio Operating Expenses” and the attached Fund prospectuses.)

Guarantee of Premiums, Deductions and Charges

We guarantee that the premiums, the amounts we deduct from premiums, and the charge for mortality and expense risks will not increase over time. These amounts will not increase regardless of future changes in longevity or increases in expenses. The Extra Ordinary Life Policy provides an

opportunity to pay an additional amount of premium after the guaranteed period for the Extra Life Protection has expired if the total Death Benefit would otherwise fall below the initial amount of insurance. (See “Extra Ordinary Life Policy”).

Death Benefit

The Death Benefit for a variable life insurance policy is, in part, a guaranteed amount which will not be reduced during the lifetime of the Insured so long as you pay premiums when they are due and no Policy Debt is outstanding. The remainder of the Death Benefit is the variable insurance amount which fluctuates in response to actual investment results and is not guaranteed. The amount of any paid-up additions is also included in the total Death Benefit and, in addition, the Extra Ordinary Life Policy provides some term insurance during the early Policy Years. Paid-up additions are amounts of permanent insurance, paid for with dividends and added to a basic life insurance policy, and for which the premium for the entire lifetime of the Insured has been paid. Paid-up additions have Cash Value and loan value. The relationships among the guaranteed and variable amounts and any paid-up additions and term insurance depend on the design of the particular Policy. For a more detailed description of how the Death Benefit is calculated for your Policy, see “Whole Life Policy and Single Premium Life Policy” and “Extra Ordinary Life Policy” below.

Payment of Proceeds The amount payable under the Death Benefit will be reduced by the amount of any Policy Debt. Subject to the terms and conditions of the Policy, the proceeds will be paid to a beneficiary or other payee after proof of the death of the Insured is received in our Home Office. The amount of proceeds will be determined as of the date of death. We will pay interest on the proceeds from that date until payment is made.

If an Income Plan was not previously elected by the Owner and in lieu of a lump sum payment, Death Benefits, less any Policy Debt, may be paid under an Income Plan selected by your beneficiary after the death of the Insured. Available Income Plans include an interest income plan, installment income plans, and life income plans. The Company may offer additional Income Plans. Generally, (1) an interest Income Plan accrues interest on the Death Benefit, the interest may be received monthly, and any remaining proceeds or interest may be withdrawn at any time; (2) an installment Income Plan pays Death Benefit proceeds in installments for a fixed period of time, and any remaining proceeds may be withdrawn at any time; and (3) a life Income Plan makes payments monthly for a chosen period and after that, for the life of the person on whose life the payments are based (or two persons if the joint option is selected). Any proceeds added to increase the amount payable under a monthly income plan may be subject to a 2.00% expense charge plus any applicable state premium tax. The choice of income plans will vary depending on financial situation and the amount of income desired monthly for a chosen time period. The Owner may elect an Income Plan while the Insured is living or, if the Insured is not the Owner, during the first 60 days after the Insured’s date of death. An Income Plan that is elected by the Owner will take effect on the date of


Variable Life Prospectus			17

death of the Insured if the notice of election is received in our Home Office while the Insured is living. In all other cases, the Income Plan will take effect on the date of receipt of the notice of election. If no Income Plan is elected, the benefit is paid to the beneficiary with interest based on rates declared by the Company or as required by applicable state law on the date of death of the Insured. Payments under these plans are from our General Account, and are subject to the claims of our creditors. Owners must look to the financial strength of the Company and its General Account with regard to guarantees under the Policy.

Variable Insurance Amount The variable insurance amount reflects, on a cumulative basis, the investment experience of the Divisions in which the Policy has participated. We adjust the variable insurance amount annually on each Policy Anniversary. For the first Policy Year the variable insurance amount was zero. For any subsequent year it may be either positive or negative. If the variable insurance amount is positive, subsequent good investment results will produce a larger variable insurance amount and therefore an increase in the Death Benefit. If the variable insurance amount is negative, subsequent good investment results will first have to offset the negative amount before the Death Benefit will increase.

In setting the premium rates for each Policy we have assumed that investment results will cause the Separate Account assets supporting the Policy to grow at a net annual rate of 4%. If the assets grow at a net rate of exactly 4% for a Policy Year, the variable insurance amount will neither increase nor decrease on the following Policy anniversary. If the net rate of growth exceeds 4%, the variable insurance amount will increase. If it is less than 4%, the variable insurance amount will decrease.

The method for calculating the changes in the Death Benefit is described in the Policy. The Policy includes a table of net single premiums used to convert the investment results for a Policy into increases or decreases in the variable insurance amount. The insurance rates in the table depend on the sex and the Attained Age of the Insured for each Policy Year. For a Whole Life Policy, the changes in the Death Benefit will be smaller for a Policy issued with a higher premium for extra mortality risk. The net single premium for a particular variable insurance amount is the price for that amount of paid-up whole life insurance based on the Insured’s age on the Policy Anniversary.

To illustrate how the variable insurance amount affects the Death Benefit for a Whole Life Policy, suppose that on your Policy Anniversary investment results since your last Policy Anniversary (excluding investment results on paid-up additions) were $500 less than the amount that would have been expected assuming a net annual growth rate of 4%. By way of example, if your net single premium (based on your underwriting classification as indicated in your Policy) per $1.00 of insurance was .40440, the variable insurance amount for the current year will decrease by $1,236 ($500/.40440), thereby decreasing the Death Benefit if the variable insurance amount had been positive. (See “Whole Life Policy and Single Premium Life Policy”).

Because the variable insurance amount is adjusted only on the Policy Anniversary, we bear the risk that the Insured may die

before the next anniversary after an interim period of adverse investment experience. If investment experience during the interim period is favorable, you will forgo the benefit and we will realize a gain. However, if on the date of death of the Insured the value of the Policy, considered as a net single premium, would buy more Death Benefit than the amount otherwise determined under the Policy, we will pay this increased Death Benefit.

The cost of life insurance increases with the advancing age of the Insured, and therefore a larger dollar amount of investment earnings is required to produce the same increase in the Death Benefit in the later Policy Years. In general, however, the effect of investment results on the Death Benefit will tend to be greater in the later Policy Years because the amount of assets invested for the Policy will tend to increase as the Policy remains in force.

The cost of providing insurance protection under a Policy is reflected in the Cash Value of the Policy. (See “Cash Value”). The cost is actuarially computed for each Policy each year, based on the Insured’s Attained Age, the 1980 Commissioners Standard Ordinary Mortality Table and the net insurance amount at risk under the Policy. The net insurance amount at risk is the Death Benefit for the Policy minus the sum of the Cash Value and any Policy Debt. The cost of insurance differs each year because the probability of death increases as the Insured advances in age, and the net insurance amount at risk decreases or increases from year to year depending on investment experience. The cost assumes that all Insureds are in the select underwriting classification. The differences in the mortality rates of the various underwriting classifications are reflected in the different premiums (or different dividend scales) for those underwriting classifications. The cost of insurance is based on the mortality table identified above and we guarantee it for the life of a Policy regardless of any future changes in mortality experience or whether dividends have been used to purchase variable benefit paid-up insurance. Our revenues attributable to this charge may exceed our costs attributable to this charge, in which case we may realize a gain.

Whole Life Policy and Single Premium Life Policy For a Whole Life Policy or a Single Premium Life Policy the Death Benefit is the face amount of the Policy plus any positive variable insurance amount in force. We adjust the Death Benefit on each Policy Anniversary when we determine the variable insurance amount for the following year. The total Death Benefit also includes the amount of insurance provided by any paid-up additions which you have purchased with dividends and includes adjustments for investment results earned through the prior year. The Death Benefit for a Whole Life Policy will not be less than the face amount so long as you pay premiums when they are due. For a Single Premium Life Policy the Death Benefit will not be less than the face amount. The amount payable at death is reduced by the amount of any Policy Debt outstanding.

Paid-up additions you have purchased with dividends are not counted for purposes of the guarantee that the Death Benefit of a Whole Life Policy or a Single Premium Life Policy will


18		Variable Life Prospectus

never be less than the face amount of the Policy. If the variable insurance amount is negative, the total Death Benefit will be the guaranteed face amount plus the amount of insurance provided by any paid-up additions. Paid-up additions are amounts of permanent insurance, paid for with dividends and adjusted by investment results earned through the prior policy year, and added to a basic life insurance policy, and for which the premium for the entire lifetime of the Insured has been paid. Paid-up additions have Cash Value and loan value.

Extra Ordinary Life Policy The Death Benefit for an Extra Ordinary Life Policy is affected by the amount of Extra Life Protection in force. Initially, the amount of Extra Life Protection is 40% of the total amount of insurance and is in the form of one year term insurance; the amount of term insurance may be adjusted on each Policy Anniversary thereafter. Term insurance is life insurance which pays a Death Benefit only if the Insured dies during the term for which the insurance has been purchased. Term insurance is ordinarily purchased on an annual basis at a cost which rises with the increasing age of the Insured. It has no cash surrender value or loan value. The amount of term insurance included in Extra Life Protection affects the dividends payable on Extra Ordinary Life Policies. Over time, positive variable insurance amounts and paid-up additions purchased with dividends will reduce the one year term insurance portion of the Extra Life Protection to an amount that (with variable insurance amounts and paid-up additions) will maintain the total Death Benefit at the amount for which the Policy was issued. The term insurance is eliminated at any time when the sum of positive variable insurance amount plus the paid-up additions equals or exceeds the initial amount of Extra Life Protection.

The amount of Extra Life Protection may increase over time but it will not decrease below the initial amount during the Policy’s guaranteed period, so long as you pay premiums when they are due, all dividends are applied to purchase paid-up additions and no paid-up additions are surrendered for their Cash Value. The length of the guaranteed period depends on the age of the Insured at issue. Please note that neither the actual investment results nor the dividends to be paid on the Policy are guaranteed. You may request an in-force illustration to illustrate the effect of various future rates of return on the amount of Extra Life Protection.

After the guaranteed period expires, if the sum of positive variable insurance amounts plus the paid-up additions is less than the initial amount of Extra Life Protection on any Policy Anniversary, we may reduce the amount of your term insurance for the Policy Year. We will give you notice of the reduction and you will have an opportunity to pay an additional amount of premium in order to keep the initial amount of insurance in force. The maximum premium rate is set forth in the Policy. The maximum premium rate varies between $6.27 per $1,000 of term insurance and $1,000 per $1,000 of term insurance, depending on the age and sex of the insured. Your right to continue the Extra Life Protection will terminate as of the first Policy Anniversary when you fail to pay the additional premium when due.

The Death Benefit for an Extra Ordinary Life Policy is the sum of the Minimum Death Benefit plus the amount of Extra Life Protection in force. The Minimum Death Benefit is 60% of the total amount of insurance for which the Policy was issued. We guarantee the Minimum Death Benefit for the lifetime of the Insured so long as you pay premiums when they are due.

The total Death Benefit is not affected by either investment results or the amount of dividends paid, so long as the Policy is within the guaranteed period of Extra Life Protection unless the term insurance has been eliminated by positive variable insurance amount and paid-up additions as described above. Good investment results and increases in dividends increase the likelihood that the total Death Benefit will begin to rise before the guaranteed period of Extra Life Protection expires. Adverse investment results or decreases in dividends could cause the total Death Benefit to fall below the amount of insurance which was initially in force, after the guaranteed period of Extra Life Protection expires, but it cannot fall below the Minimum Death Benefit so long as you pay premiums when they are due. In each case the amount payable at death is reduced by any Policy Debt outstanding.

The following three examples illustrate how Extra Life Protection operates during the guaranteed period. In each example the Policy was issued for a total amount of $250,000. The minimum death benefit is $150,000 (60% of $250,000) and the initial amount of Extra Life Protection is $100,000 (40% of $250,000).

•

Example 1: On a Policy Anniversary, there is a total positive variable insurance amount of $10,000 and paid-up additions are $15,000. The Extra Life Protection for the following year would consist of term insurance in the amount of $75,000 ($100,000 minus the sum of $10,000 and $15,000) in order to maintain the initial amount of Extra Life Protection. There would be no effect on the current Death Benefit because the total of the variable insurance amount and paid-up additions has not exceeded the initial amount of Extra Life Protection.

•

Example 2: On a Policy Anniversary, there is a total negative variable insurance amount of -$12,000 and paid-up additions are $15,000. The Extra Life Protection for the following year would consist of term insurance in the amount of $85,000, reflecting a reduction for paid-up additions but not negative variable insurance amounts. Again, there would be no effect on the current Death Benefit. In subsequent years positive variable insurance amounts will need to make up for the negative variable insurance amounts in order to affect the amount of term insurance.

•

Example 3: On a Policy Anniversary, there is a total positive variable insurance amount of $60,000 and paid-up additions are $50,000. The Extra Life Protection for the following year would consist of no term insurance and would increase to $110,000 (the sum of $60,000 and $50,000). In this case the current Death Benefit would increase to reflect variable insurance amounts and paid-up insurance in excess of the Extra Life Protection (see “Variable Insurance Amount” above).


Variable Life Prospectus			19

We have designed the Extra Ordinary Life Policy for a purchaser who intends to use all dividends to purchase paid-up additions. If you use dividends for any other purpose, or if any paid-up additions are surrendered for their Cash Value, the term insurance in force will immediately terminate, any remaining guaranteed period of Extra Life Protection will terminate and your right to continue the amount of Extra Life Protection as described above will terminate. The amount of Extra Life Protection thereafter will be the sum of positive variable insurance amount plus any paid-up additions which remain in force.

Cash Value

The Cash Value of a Policy is equal to the amount you are eligible to receive when you surrender the Policy. If investment results were a net level 4% every year, the Cash Value would increase each year according to a table in your Policy (“tabular Cash Value”). However, the Cash Value for all Policies will change daily in response to investment results. For any given date, to calculate the Cash Value, the tabular Cash Value for the last Policy Anniversary is adjusted to reflect the time elapsed since the last Policy Anniversary. We then adjust the sum of the tabular Cash Value and the net single premium for the variable insurance amount (see the discussion of net single premiums under “Variable Insurance Amount”) to reflect investment results from the last Policy Anniversary to the date for which the calculation is being made. The Cash Value is increased by the value of any paid-up additions which have been purchased with dividends. The value of the paid-up additions reflect investment results from your last Policy Anniversary to the date for which the calculation is being made. If a portion of the premium for the current Policy Year has not been paid, the Cash Value of a Whole Life Policy or an Extra Ordinary Life Policy will be reduced. The Cash Value for all Policies will be reduced by any Policy Debt outstanding. No minimum Cash Value is guaranteed.

We determine the Cash Value for a Policy (including any request for a Death Benefit reduction, please see below) at the end of each valuation period (typically, 4:00 p.m. Eastern Time each business day). Each business day, together with any non-business days before it, is a valuation period. A business day is any day on which the NYSE is open for trading. In accordance with the requirements of the 1940 Act, we may also determine the Cash Value for a Policy on any other day on which there is sufficient trading in securities to materially affect the value of the securities held by the Portfolios.

You may surrender a Policy for the Cash Value at any time during the lifetime of the Insured. We will surrender your Policy upon receiving a surrender request in Good Order at our Home Office. Requests for surrender received before the close of trading (typically, 4:00 p.m. Eastern Time) on the NYSE are deemed to be received and effective that day. If received on or after the close of trading, requests are deemed to be received and effective as of the close of the next regular trading session of the NYSE. If your request is not in Good Order, either we or your Financial Representative may notify

you in writing, by telephone or by email in an effort to conform your request to our then-current requirements. Alternatively, you may use the Cash Value of a Whole Life Policy or an Extra Ordinary Life Policy to provide extended term insurance or a reduced amount of fixed or variable paid-up insurance. (See “Extended Term and Paid-Up Insurance”). Surrender proceeds may be paid under an Income Plan requested by an Owner at the time of surrender. Available Income Plans include an interest income plan, installment income plans, and life income plans. The Company may offer additional Income Plans.

You may request a Death Benefit reduction, so long as the Policy’s Death Benefit after reduction meets the regular minimum size requirements. A proportionate refund of the Policy’s Cash Value will result from any Death Benefit reduction. The refund of Cash Value will first be applied toward any existing loan balance. The remainder of the Cash Value refunded will be returned to the Owner. The remaining Policy will be based on the age and underwriting classification of the Insured at the time of issuance of the original Policy. We will allocate reductions among the Divisions in proportion to the amounts in the Divisions.

Annual Dividends

The Policies are eligible to share in the divisible surplus, if any, of the Company. Each year we determine, in our sole discretion, the amount and appropriate allocation of divisible surplus. Divisible surplus allocated to your Policy is referred to as a “dividend.” A Policy’s share, if any, will be credited as a dividend on the Policy Anniversary. We will not pay a dividend on a Whole Life Policy or an Extra Ordinary Life Policy which is in force as extended term insurance. There is no guaranteed method or formula for the determination or allocation of divisible surplus. The Company’s approach is subject to change. There is no guarantee of a divisible surplus. Even if there is a divisible surplus, the payment of a dividend on a Policy is not guaranteed. Illustrated dividends published at the time a life insurance policy is issued generally reflect the actual recent experience of the issuing company with respect to mortality and expenses and hypothetical investment results.

If you receive dividends, you may use them to purchase variable paid-up additions, unless the Policy is in force as reduced fixed paid-up insurance. We will also pay dividends in cash, or you may use them to pay premiums or leave them to accumulate with interest (see “Tax Consideration—Tax Treatment of Life Insurance”); but unless you use all dividends we pay on an Extra Ordinary Life Policy to purchase paid-up additions, the term insurance portion of the Extra Life Protection will be terminated. (See “Extra Ordinary Life Policy”). We hold dividends you leave to accumulate with interest in our General Account and we will credit them with a rate of interest we determine annually. The interest rate will not be less than an annual effective rate of 3.5%. If a Whole Life Policy or an Extra Ordinary Life Policy is in force as reduced fixed benefit paid-up insurance, dividends may be used to purchase fixed benefit paid-up additions. (See


20		Variable Life Prospectus

“Extended Term and Paid-Up Insurance”). Dividends used to purchase variable benefit paid-up additions will be allocated to the Divisions of the Separate Account according to the allocation of Net Premiums then in effect.

Policy Loans and Automatic Premium Loans

Described below are certain terms and conditions that apply when you borrow amounts under the Policy. Policy loans are secured by your Policy Value. For information on the tax treatment of loans, see “Tax Considerations” and consult with your tax advisor.

Policy Loans You may borrow an amount that, when added to existing Policy Debt, is not more than the maximum amount under your policy (the “loan value”). The loan value is 90% of the sum of the Cash Value and any existing Policy Debt on the date of the loan. You may take loan proceeds in cash or, for the Whole Life and Extra Ordinary Life Policies, you may use them to pay premiums on the Policy. We normally pay the loan proceeds within seven days after we receive a proper loan request at our Home Office. Eligible Owners may also submit loan requests via the Variable Life Service Center at 1-866-424-2609. Written and telephone requests will be processed based on the date and time they are received in the Home Office, provided the request is received in Good Order. If your request is not in Good Order, either we or your Financial Representative may notify you in writing, by telephone or by email in an effort to conform your request to our then-current requirements. Based on our administrative procedures, you may have the option of receiving funds via wire transfer or priority mail, and we may charge a fee for this service to cover our administrative costs. We may postpone payments of loans under certain conditions described in the “Deferral of Determination and Payment” section of this prospectus. Under certain circumstances in accordance with our procedures your Financial Representative may provide us with instructions regarding requests on your behalf.

Automatic Premium Loans If you have chosen the Automatic Premium Loan provision or it is currently in effect for your Policy, a premium loan, which is a form of Policy loan, will automatically be made to pay an overdue premium if the premium is less than the maximum amount available for a new loan. A confirmation statement will be sent each time an automatic premium loan occurs.

General Loan Terms Interest on a loan accrues and is payable on a daily basis. We add unpaid interest to the amount of the loan. The Policy’s Cash Value is reduced by the amount of the loan. If the Cash Value decreases to zero, the Policy will terminate unless a sufficient portion of the loan is repaid. We will send you a notice at least 31 days before the termination date. The notice will show how much you must repay to keep the Policy in force.

You select the loan interest rate. The loan interest rate is applied to both the amount of the loan and accrued interest. A specified annual effective rate of 8% is one choice. (The specified annual effective rate may be lower in Arkansas.) The other choice is a variable rate based on a corporate bond yield

index. We will adjust the variable rate annually. It will not be less than 5%.

We will take the amount of a loan, including interest as it accrues, from the Divisions in proportion to the amounts in the Divisions. We will transfer the amounts withdrawn to our General Account and will credit those amounts on a daily basis with an annual earnings rate equal to the loan interest rate less a charge for the mortality and expense risks we have assumed and for expenses, including taxes. When the Insured is Attained Age 99 and below, the aggregate charge is currently at the annual rate of .85% for the 8% specified loan interest rate and .85% for the variable loan interest rate. For example, the earnings rate corresponding to an 8% loan interest rate is currently 7.15% when the Insured is Attained Age 99 and below. When the Insured is Attained Age 100 and above, the aggregate charge is currently at the annual rate of .30% for the 8% specified loan interest rate and .30% for the variable loan interest rate. For example, the earnings rate corresponding to an 8% loan interest rate is currently 7.70% when the Insured is Attained Age 100 and above. A loan, even if you repay it, will have a permanent effect on the Policy’s variable insurance amount and Cash Value because the amounts you have borrowed will not participate in the Separate Account’s investment results while the loan is outstanding. The effect may be either favorable or unfavorable depending on whether the earnings rate credited to the loan amount is higher or lower than the investment performance of the unborrowed amounts left in the Divisions of the Separate Account.

The amount payable at death will also be reduced by the amount of any Policy Debt outstanding. If you surrender or exchange the Policy or allow it to lapse while Policy Debt is outstanding, the amount of the loan, to the extent it has not previously been taxed, will be considered as an amount you received and taxed accordingly.

You may repay a loan, and any accrued interest outstanding, in whole or in part, at any time while the Insured is alive. If we receive a payment without specific instructions, we will first apply the payment to any premium due, with any remaining amount being applied to any outstanding loans. Payments in excess of outstanding debt and premiums due will be returned unless such amounts are deemed to be de minimis according to our procedures. Except as described below, if we receive your loan payments before the close of trading (typically, 4:00 p.m. Eastern Time) on the NYSE, we will credit payments as of the date we receive them and transfer them from our General Account to the Divisions, in proportion to the amounts in the Divisions, as of the same date. If we receive your loan payments on or after the close of trading on the NYSE, we will credit payments as of the close of the next regular trading session of the NYSE and transfer them from our General Account to the Divisions, in proportion to the amounts in the Divisions, as of the date we credit the payment. Payments must be in Good Order to be processed. If your payment is not in Good Order, either we or your Financial Representative may notify you in writing, by telephone or by email in an effort to conform your payment to our then-current requirements.


Variable Life Prospectus			21

Policy loan payments received within 34 days after the loan interest billing date will be credited as of the loan interest billing date. Automatic premium loans are effective as of the premium due date unless a loan payment is received between the premium due date and the date the Automatic Premium Loan is made. Automatic premium loan payments received up to 66 days after the loan interest billing date will be credited as of the Policy Anniversary, depending on your premium payment schedule. We will send you a notice indicating your loan interest billing date. Loan repayments are not subject to transaction fees.

Extended Term and Paid-Up Insurance

If a premium for a Whole Life Policy or an Extra Ordinary Life Policy is not paid when due or within the 31-day grace period (see “Grace Period”), and you have not chosen the Automatic Premium Loan (APL) provision or do not have sufficient loan value to pay the premium, (see “Policy Loans and Automatic Premium Loans”), the Cash Value will purchase extended term insurance, or, at your request, a reduced amount of either fixed or variable benefit paid-up insurance.

If you use the Cash Value to provide a reduced amount of fixed benefit paid-up insurance or for extended term insurance, we will transfer the amount of the Cash Value from the Separate Account to our General Account at the conclusion of the 31 day grace period. Thereafter the Policy will not participate in the Separate Account’s investment results unless the Policy is subsequently reinstated. (See “Reinstatement”). You may select variable benefit paid-up insurance only if the Policy has at least $1,000 of Cash Value, in which case your Policy will reflect reductions for the cost of insurance. The minimum guaranteed death benefit (the face amount for Whole Life or the Minimum Death Benefit for Extra Ordinary Life) is not in effect for variable paid-up insurance.

For fixed paid-up insurance, you must have selected paid-up insurance within three months after the due date of your first unpaid premium. We determine the amount of paid-up insurance by the amount of Cash Value and the age and sex of the Insured, using the table of net single premiums at the Attained Age. Fixed benefit paid-up insurance has guaranteed cash and loan values. Paid-up insurance remains in force for the lifetime of the Insured unless the Policy is surrendered or the Cash Value is reduced to zero because of any Policy Debt.

If the Policy remains in force as extended term insurance, the amount of insurance will equal the Death Benefit prior to the date the premium was due, less any Policy Debt. The amount of Cash Value and the age and sex of the Insured will determine how long the insurance continues. We will, upon your request, tell you the amount of insurance and how long the term will be. Extended term insurance is not available if the Policy was issued with a higher premium for extra mortality risk. Extended term insurance has a Cash Value but no loan value.

Reinstatement

If a premium for a Whole Life Policy or an Extra Ordinary Life Policy is due and remains unpaid at the end of the grace period, the Policy will lapse. The Policy may be reinstated after lapse within five years after the premium due date. The Insured must provide satisfactory evidence of insurability. Any premium or other payment due, including any applicable interest, will also be required. If we approve your request for reinstatement and the request is received before the close of trading (typically, 4:00 p.m. Eastern Time) on the NYSE, we will deem your request to be received and effective that day. If we receive your request on or after the close of trading on the NYSE, we will deem your request to be received and effective on the next regular trading session of the NYSE. Applications must be received in Good Order to be processed. If your request is not in Good Order, either we or your Financial Representative may notify you in writing, by telephone or by email in an effort to conform your request to our then-current requirements.

The Company may waive the requirement to provide satisfactory evidence of insurability if the reinstatement is applied for, and any premium or other payment due is paid, within 90 days (or longer if mandated by your state) after the premium due date and while the Insured is alive. Upon reinstatement, your Policy Date will not change and your Death Benefit option will remain the same as of the date of lapse. Your Cash Surrender Value will equal the new Policy Value (see above) minus any Policy Debt. Therefore, fees and charges that vary by Policy year will take into account the period of time your Policy was terminated. In addition, following the reinstatement the Policy will have the same Death Benefit and amount in each Division as if all premiums had been paid when due. We will make an adjustment for any Policy Debt or the debt may be reinstated. A reinstatement may have important tax consequences. If you contemplate any such transaction you should consult a qualified tax adviser.

Reinvestments After Surrender

While Owners have no right to reinvestment after a surrender, we may, at our sole discretion, permit such reinvestments as described in this paragraph. In special limited circumstances, we may allow payments into a Policy in the form of returned surrender proceeds in connection with a request to void a surrender if the request is received by the Company within a reasonable time after the surrender proceeds are mailed. These payments may be processed without a sales load in the case of a Whole Life Policy or an Extra Ordinary Life Policy. The period for which we will accept requests for the return of surrender proceeds after a surrender may vary in accordance with our administrative procedures. The returned surrender proceeds will be reinvested after our receipt of the reinvestment request in Good Order at our Home Office. If we receive your request before the close of trading (typically, 4:00 p.m. Eastern Time) on the NYSE, we will deem your request to be received and effective that day. If we receive your request on or after the close of trading on the NYSE, we will deem your request to be received and effective on the


22		Variable Life Prospectus

next regular trading session of the NYSE. If your request is not in Good Order, either we or your Financial Representative may notify you in writing, by telephone or by email in an effort to conform your request to our then-current requirements. Proceeds will be applied to the same Division from which the surrender was made. Under certain circumstances in accordance with our procedures your Financial Representative may provide us with instructions regarding requests for reinvestment on your behalf.

Depending on the Insured’s underwriting classification, we may not accept the reinvestment or we may accept the reinvestment with different charges and expenses under the Policy. We may refuse to process reinvestments where it is not administratively feasible; including where any such reinvestment may cause the Policy to fail to qualify as life insurance under applicable law. Decisions regarding requests for reinvestment will take into consideration differences in costs and services and will not be unfairly discriminatory. Policies with reinvested surrender proceeds will have the same Death Benefit as if the proceeds had not been surrendered, except the values will reflect the fact that amounts were not invested in the Separate Account during the period of time the surrender proceeds were not in the Policy as well as any changes in charges and expenses due to a change in underwriting classification. We will make an adjustment for any Policy Debt or the debt may be reinstated.

Please note that our decision to permit a reinvestment does not reverse or eliminate any tax consequences and/or tax reporting resulting from the original surrender. Surrenders have tax consequences and we may be required to report them to the Internal Revenue Service and/or your state for income tax purposes. We may also be required to treat the reinvested proceeds as a new premium for purposes of determining whether your policy will become a MEC, and, as with any premium payment, we may be required to reject your reinvestment if it would result in your Policy failing to qualify as life insurance for Federal tax purposes. (See “Tax Considerations”).

Right to Exchange for a Fixed Benefit Policy

It is currently Company practice to allow you to exchange your Policy for a policy that does not vary with the investment experience of the Separate Account (“Fixed Benefit Policy”). We may modify or terminate this accommodation at any time, with or without notice, unless your state or the terms of your Policy provide for such an exchange. We reserve the right to require evidence of insurability. Depending on the timing and the individual circumstances surrounding the exchange, the Fixed Benefit Policy will be on the life of the same Insured and at the time of the exchange may have the same Policy Date and Issue Age and a Death Benefit at least as great as the initial guaranteed Death Benefit of your Policy (assuming no reduction in Death Benefit prior to the exchange). The premiums and Cash Value will be the same as those for fixed benefit policies that we issue on the issue date of the Fixed Benefit Policy. The exchange may be subject to an equitable cash adjustment, which will recognize the investment

performance of the Policy through the effective date of the exchange, and may have tax consequences. An exchange will be effective when we receive a proper written request (or verbal authorization according to our current procedures), as well as the Policy, and any amount due on the exchange.

In addition, you may exchange a Policy for a Fixed Benefit Policy if, at any time, a Fund changes its investment adviser, if there is a material change in the investment objectives or restrictions of a Portfolio, or a Portfolio is substituted for another portfolio (see “Substitution of Portfolio Shares and Other Changes”). There may be a cost associated with the exchange. We will give you notice of any such change. You may make the change within 60 days after the notice or effective date of the change, whichever is later.

Modifying a Policy

Any Policy change that you request is subject to our then current insurability and processing requirements. Processing requirements may include, for example, completion of certain forms or satisfying certain evidentiary and/or close of trading requirements.

If the Policy is changed or modified, we may make appropriate endorsements to the Policy, and we may require you to send your Policy to our Home Office for endorsement. Any modification or waiver of our rights or requirements under the Policy must be in writing and signed by an officer of the Company. No agent or other person may bind us by waiving or changing any provision contained in the Policy.

Upon notice to you, we may modify a Policy:

•

to conform the Policy, our operations, or the Separate Account’s operations to the requirements of any law (including any regulation issued by a government agency) to which the Policy, the Company, or the Separate Account is subject;

•

to ensure continued qualification of the Policy as a life insurance contract under the federal tax laws; or

•

to reflect a change in the Separate Account’s operation.

Other Policy Provisions

Owner The Owner is identified in the Policy. The Owner may exercise all rights under the Policy while the Insured is living. Ownership may be transferred to another. Written proof of the transfer must be received by Northwestern Mutual at its Home Office. In this prospectus “you” means the Owner of a Policy. Generally, only Owners are entitled to important information about the Policy. Other persons, such as beneficiaries or payors, are entitled to only limited information.

Beneficiary The beneficiary is the person to whom the Death Benefit is payable. The beneficiary is named in the Application. You may change the beneficiary in accordance with the Policy provisions.

Incontestability We will not contest a Policy after it has been in force during the lifetime of the Insured for two years


Variable Life Prospectus			23

from the Date of Issue or two years from the effective date of a reinstatement. After the two year period, to the extent permitted by state law we may rescind the Policy if the application contains a fraudulent misstatement.

Misstatement of Age or Sex If the age or sex of the Insured has been misstated, we will adjust benefits under a Policy to reflect the correct age and sex.

Collateral Assignment You may assign a Policy as collateral security. We are not responsible for the validity or effect of a collateral assignment and will not be deemed to know of an assignment before receipt of the assignment in writing at our Home Office.

Optional Benefits If available in your state, there are two optional benefits available for purchase under the Whole Life Policy or Extra Ordinary Life Policy: (1) a Waiver of Premium Benefit; and (2) an Additional Purchase Benefit.

Subject to the terms and conditions of the benefit, the Waiver of Premium Benefit waives the payment of all premiums that come due during the total disability of the Insured if the disability is due to accident or sickness and it begins on or before the Policy Anniversary nearest the Insured’s 60^th birthday. If the disability occurs after the Policy Anniversary nearest the Insured’s 60^th birthday, the benefit waives the payment of all premiums that come due during the total disability of the Insured until the Policy Anniversary nearest the Insured’s 65^th birthday.

Subject to the terms and conditions of the benefit, the Additional Purchase Benefit guarantees the right to buy more insurance without proof of insurability.

If you selected one or both of these optional benefits, you are subject to a separate charge. (See “Periodic Charges (Other than Fund Operating Expenses)” and “Deductions and Charges—Optional Benefits” for more information about the charges.) Any charge will continue to be assessed as long as the benefit remains in force. Once the Policy has been issued, an optional benefit may be issued only upon mutual agreement.

Income Plans The Policy provides a variety of Income Plans for Policy benefits. Any Northwestern Mutual Financial Representative authorized to sell the Policies can explain these provisions on request.

Deferral of Determination and Payment So long as premiums have been paid when due, we will ordinarily pay Policy benefits within seven days after we receive all required documents at our Home Office. However, we may defer determination and payment of benefits during any period when it is not reasonably practicable to value securities because the NYSE is closed, or the SEC, by order, either has determined that an emergency exists or permits deferral of the determination and payment of benefits for the protection of Owners. If a Whole Life Policy or an Extra Ordinary Life Policy is continued in force as extended term or reduced fixed benefit paid-up insurance, we have the right to defer payment of the Cash Value for up to six months from the date of a Policy loan or surrender. If payment of surrender proceeds is

deferred for 30 days or more, we will pay interest at an annual effective rate of 4%. If, under SEC rules, the Government Money Market Portfolio suspends payments of redemption proceeds in connection with a liquidation of the Portfolio, we will delay payment of any transfer, partial surrender, surrender, death benefit from the Government Money Market Division until the Portfolio is liquidated.

If you have submitted a check or draft to our Home Office, we have the right to defer payment of surrender proceeds, Cash Value resulting from a Death Benefit reduction, Death Benefit or loan proceeds or Income Plan benefits until the check or draft has been honored.

If mandated under applicable law, we may be required to block an Owner’s account and thereby refuse to pay any requests for transfer, Death Benefit reduction, surrender, loans, or Death Benefit proceeds, until instructions are received from the appropriate legal authority. We may also be required to provide additional information about an Owner and an Owner’s account to government authorities.

Voting Rights

As long as the Separate Account continues to be registered as a unit investment trust under the 1940 Act, and as long as Separate Account assets of a particular Division are invested in shares of a given Portfolio, we will vote the shares of that Portfolio held in the Separate Account in accordance with instructions we receive from Owners. Periodic reports relating to the Portfolios, proxy material, and a form on which one can give instructions with respect to the proportion of shares of the Portfolio held in the Separate Account corresponding to the Owner’s Policy Value, will be made available to the Owner(s). We will vote shares for which no instructions have been received in the same proportion as the shares for which instructions have been received from Owners. The effect of such proportional voting is that a small number of Owners may control the outcome of a particular vote.

We may, if required by state insurance regulations, disregard voting instructions which would require shares to be voted for a change in the sub-classification or investment objectives of a Portfolio, or to approve or disapprove an investment advisory agreement for a Portfolio. We may also disregard voting instructions that would require changes in the investment policy or investment adviser for a Portfolio, provided that we reasonably determine to take this action in accordance with applicable federal law. If we disregard voting instructions we will include a summary of the action and reasons therefore in the next annual report to Policy Owners.

Substitution of Portfolio Shares and Other Changes

If, in our judgment, one or more Portfolios become unsuitable for continued use with the Policies because of a change in investment objectives or restrictions, for each such Portfolio we may substitute shares of another Portfolio or another mutual fund. We may also substitute a class of shares of an existing Portfolio for a different class of the same Portfolio if allowable under applicable law. Any substitution of shares


24		Variable Life Prospectus

will be subject to any required approval of the SEC, the Wisconsin Commissioner of Insurance or other regulatory authority. We have also reserved the right, subject to applicable federal and state law, to operate the Separate Account or any of its Divisions as a management company under the 1940 Act, or in any other form permitted, or to terminate registration of the Separate Account if registration is no longer required, and to change the provisions of the Policies to comply with any applicable laws.

Reports and Financial Statements

For each Policy Year you will receive a statement showing the Death Benefit, Cash Value and any loans (including interest charged) as of the Policy anniversary. We will also send you a confirmation statement when you transfer among Divisions, take a Policy loan, or surrender the Policy. The annual statement and confirmation statements will show your apportioned amounts among the Divisions. If the Policy is in force as extended term or fixed benefit paid-up insurance, statements and reports will be limited to an annual Policy statement showing the Death Benefit, Cash Value and any loans.

Annually, we will send you a report containing financial statements of the Separate Account and semi-annually, we will send you reports containing financial information and schedules of investments for the Portfolios underlying the Divisions to which your Invested Assets are allocated. The financial statements of the Company appear in the Statement of Additional Information. To receive a copy of the Annual Report, Semi-Annual Report and/or the Statement of Additional Information, call the Variable Life Service Center at 1-866-424-2609. Certain reports and other information can be obtained on our website at www.northwesternmutual.com.

Special Policy for Employers

The premium for the standard Policy is based in part on the sex of the Insured. The standard annuity rates for Income Plans which last for the lifetime of the payee are also based, in part, on the sex of the payee. However, if your Policy was issued in connection with an employer sponsored benefit plan or arrangement, federal law and the laws of certain states may require that premiums and annuity rates be determined without regard to sex. You are urged to review any questions in this area with qualified counsel.

Householding

To reduce costs, we may send only a single copy of the same disclosure document(s) (such as prospectuses, prospectus supplements, reports, announcements, proxy statements, notices, and information statements) to each consenting household (rather than sending copies to each Owner residing in a household). If you are or become a member of such a household, you can revoke your consent to “householding” at any time, and can begin receiving your own copy of such disclosure documents, by calling the Variable Life Service Center at 1-866-424-2609.

Abandoned Property Requirements

Every state has unclaimed property laws which generally declare insurance contracts/policies to be abandoned after a period of inactivity of three to five years from the contract’s/policy’s maturity date, the date the death benefit is due and payable, or in some states, the date the insurer learns of the death of the insured. For example, if the payment of the death benefit has been triggered, but, if after a thorough search, we are still unable to locate the beneficiary, or if the beneficiary does not come forward to claim the death benefit proceeds in a timely manner, the death benefit proceeds will be paid to the abandoned property division or unclaimed property office of the state in which the beneficiary or you last resided, as shown on our books and records, or to our state of domicile. This “escheatment” is revocable, however, and the state is obligated to pay the death benefit proceeds (without interest) if your beneficiary steps forward to claim them with the proper documentation. To prevent such escheatment, it is important that you update your beneficiary designations, including addresses, if and as they change. Please contact your Financial Representative or call the Variable Life Service Center at 1-866-424-2609 for assistance in making such changes.

Cybersecurity and Certain Business Continuity Risk

The Company has administrative, technical and physical safeguards in place with respect to information security, nevertheless, our variable product business is potentially susceptible to operational and information security risks resulting from a cyber-attack as it is highly dependent upon the effective operation of our computer systems and those of our business partners. These risks include, among other things, the theft, misuse, corruption and destruction of data maintained online or digitally, denial of service on websites and other operational disruption and unauthorized release of confidential customer information. Cyber-attacks affecting us, the Portfolios, intermediaries and other affiliated or third-party service providers may adversely affect us and your Policy Value. For instance, cyber-attacks may interfere with our processing of contract transactions (including the processing of orders through our website, if available, or with the Portfolios), impact our ability to calculate values, cause the release and possible destruction of confidential customer or business information, impede order processing, subject us and/or our service providers and intermediaries to regulatory fines and financial losses and/or cause reputational damage. Cybersecurity risks may also impact the issuers of securities in which the Portfolios invest, which may cause the Portfolios to lose value. There can be no assurance that we or the Portfolios or our service providers will avoid losses affecting your Policy due to cyber-attacks or information security breaches in the future.

Other disruptive events, including (but not limited to) natural or man-made disasters and public health crises or pandemics (such as coronavirus COVID-19), may also adversely affect our ability to conduct business, including if our employees or the employees of intermediaries or other affiliated or


Variable Life Prospectus			25

third-party service providers are unable to perform their responsibilities as a result of any such event. Such disruptions to our business operations can interfere with issuance or our processing of transactions (including the processing of orders through our website or with the Portfolios), may interfere with our ability to receive, pickup and process mail and messages, impact our ability to calculate values, or cause other operational or system issues. Furthermore, these disruptions may persist even if our employees or the employees of intermediaries or other affiliate or third-party service providers are able to work remotely. These events may also impact the issuers of securities in which the Portfolios invest, which may cause the Portfolios to lose value. There can be no assurance that the Company, the Portfolios or our service providers will avoid losses affecting your Policy due to a disaster or other catastrophe.

Legal Proceedings

Northwestern Mutual, like other life insurance companies, is generally involved in litigation at any given time. Although the outcome of any litigation cannot be predicted with certainty, we believe that, as of the date of this prospectus, there are no pending or threatened lawsuits that will have a materially adverse impact on the ability of Northwestern Mutual to meet its obligations under the Policy, on the Separate Account, or on Northwestern Mutual Investment Services, LLC, the principal underwriter for the Separate Account, and its ability to perform its duties as underwriter for the Separate Account.

Speculative Investing

This Policy, or any of its riders, should not be used for any type of speculative collective investment scheme (including, for example, arbitrage). Your Policy is not intended to be traded on any stock exchange or secondary market, and attempts to engage in such trading may violate state and/or federal law.

Owner Inquiries

You may receive information about your Policy via the Variable Life Service Center by calling toll-free at 1-866-424-2609. With your User ID and password, you can also visit our website www.northwesternmutual.com to access performance information, forms for routine service, and daily

Policy values for Policies you own. Eligible Owners may also set up certain electronic payments, transfer accumulated amounts among Divisions and change the allocation of future contributions online, subject to our administrative procedures. For enrollment information, please visit our website www.northwesternmutual.com. Please note that electronic devices may not always be available. Any electronic device, whether it is yours, your service provider’s, your agent’s or ours, can experience outages or slowdowns for a variety of reasons, which may delay or prevent our processing of your request or payment. Although we have taken precautions to limit these problems, we cannot promise complete reliability under all circumstances. If you are experiencing problems, you should make your request or payment in writing at our Home Office. Electronic requests or payments are deemed to be received by us upon receipt at the electronic location designated by us in our procedures. If you have questions about surrendering your Policy, please call your Financial Representative or the Variable Life Service Center at 1-866-424-2609. To file a claim, please call your Financial Representative or Life Benefits at 1-800-635-8855.

Illustrations

Your Northwestern Mutual Financial Representative will provide you with an illustration for your Policy upon request. The illustration will reflect the performance of your Policy to date and will show how the amount payable at death and Cash Value would vary based on hypothetical future investment results.

Illustrations for variable life insurance policies do not project or predict investment results. The illustrated values assume that non-guaranteed elements such as dividends, policy charges and level investment returns will not change. Given the volatility of the securities markets over time, the illustrated scenario is unlikely to occur and the Policy’s actual Cash Value, amount payable at death, and certain expenses (which will vary with the investment performance of the Portfolios) will be more or less than those illustrated. In addition, the actual timing and amounts of payments, deductions, expenses and any values removed from the policy will also impact product performance. Due to these variations, even a Portfolio that averaged the same return as illustrated will produce values which will be more or less than those which were illustrated.

Tax Considerations

General The following discussion provides a general description of federal tax considerations relating to your Policy. The discussion is based on current provisions of the Internal Revenue Code (“Code”) as currently interpreted by the Treasury Department and the Internal Revenue Service (“IRS”). The discussion is not exhaustive, it does not address the likelihood of future changes in federal tax law or interpretations thereof, and it does not address state or local

tax considerations which may be significant in the purchase and ownership of a Policy.

Depending on the circumstances, the exchange of a Policy, a Policy loan (including the addition of unpaid loan interest to a Policy loan), or a change in ownership or an assignment of the Policy, or an interest in the Policy, may have federal income tax consequences. In addition, federal, state and local transfer, estate, inheritance, and other tax consequences of Policy


26		Variable Life Prospectus

ownership, premium payments and receipt of Policy proceeds depend on the circumstances of each Owner or beneficiary. If you contemplate any such transaction you should consult a qualified tax adviser.

This tax discussion is intended to describe the tax consequences associated with your Policy. It does not constitute legal or tax advice, and is not intended to be used and cannot be used to avoid any penalties that may be imposed on a taxpayer. Taxpayers should seek advice based on their particular circumstances from an independent tax advisor.

Life Insurance Qualification Section 7702 of the Code defines life insurance for federal income tax purposes. Under Section 7702, a Policy will generally be treated as life insurance for federal tax purposes if at all times it meets either a guideline premium test or a cash value accumulation test. We have designed your Policy to comply with only the cash value accumulation test. We may take any action that may be necessary for the Policy to qualify as life insurance for tax purposes.

The definitional tests under the Code are based on the Commissioner’s Standard Ordinary (CSO) mortality tables in effect when the Policies were issued. For Policies issued or materially changed after 2019, the tests must be based on the 2017 CSO mortality tables. Because Policies issued based on the 1980 CSO or 2001 CSO mortality tables may not satisfy the definitional tests using the 2017 CSO mortality tables, certain changes to those Policies will not be permitted (as defined by IRS Notices 2016-63). Special safe harbor calculation rules apply to life insurance after the Insured attains age 100. See IRS Rev. Proc. 2018-20.

As provided by Section 817(h) of the Code, the Secretary of the Treasury has set standards for diversification of the investments underlying variable life insurance policies. Failure to meet the diversification requirements would disqualify your Policy as life insurance for purposes of Section 7702 of the Code. We believe that your Policy complies with the provisions of Sections 7702 and 817(h) of the Code, but the application of these rules is not entirely clear. We may make changes to your Policy if necessary for the Policy to qualify as life insurance for tax purposes.

IRS Rev. Ruls. 2003-91 and 2003-92 provide guidance on when an Owner’s control of Separate Account assets will cause the Owner, and not the life insurance company, to be treated as the owner of those assets. Important indicators of investor control are the ability of the Owner to select the investment advisor, the investment strategy or the particular investments of the Separate Account. If the Owner of a Policy were treated as the owner of the assets held in the Separate Account, the income and gains related to those assets would be included in the Owner’s gross income for federal income tax purposes. We believe that we own the assets of the Separate Account under current federal income tax law.

Tax Treatment of Life Insurance While your Policy is in force, increases in the Cash Value due to investment experience are not subject to federal income tax until there is a

distribution as defined by the Code. Death Benefit proceeds received by a beneficiary will generally not be subject to federal income tax.

So long as your Policy is not classified as a MEC (see “Modified Endowment Contract”), the proceeds from a surrender or withdrawal will generally be taxable only to the extent that the proceeds exceed the investment in the contract (“cost basis” or “basis”) of the Policy. The basis of the Policy is generally equal to the premiums paid less any amounts previously received as tax-free distributions. Dividends paid in cash, if any, are generally taxed as withdrawals with a resulting reduction in basis. However, dividends applied to purchase additional insurance or used to pay premiums are generally not taxable. In certain circumstances, a withdrawal of Cash Value during the first 15 Policy Years may be taxable to the extent that the Cash Value exceeds the basis of the Policy. This means that the amount withdrawn may be taxable even if that amount is less than the basis of the Policy.

Unless the Policy is a MEC, a loan received under your Policy will not be treated as a distribution subject to current federal income tax. If the Policy remains in force until the death of the Insured or, in the case of joint life insurance, the second death, the Policy Debt will be repaid from the Death Benefit. However, if the Policy terminates by any method other than death, the Policy Debt will be repaid from the Cash Value of the Policy, and the total Cash Value, including the total amount of the Policy Debt, will be taxable to the extent it exceeds the basis of the Policy. If the extended term insurance nonforfeiture option is available in your Policy, and it lapses to extended term insurance, the Policy Debt will be repaid from Cash Value of the Policy and the Policy Debt repayment will be treated as income and taxable to the extent it exceeds Policy’s basis.

Caution must be used when taking cash out of a Policy through policy loans. If interest is not paid annually, it is added to the principal amount and the total Policy Debt will continue to increase for as long as the loan is maintained on the Policy. In extreme situations, Owners can face what is called the “surrender squeeze.” The surrender squeeze occurs if the Policy Debt becomes too large when compared to the unborrowed Cash Value remaining in the Policy, thereby causing the Policy to lapse. (See the “Policy Loans and Automatic Premium Loans” section for more details). As described above, if your policy lapses with outstanding Policy Debt, you will have an income tax liability to the extent the Policy Debt exceeds the Policy basis. This means that you may have to pay income tax for a year in which you did not receive any cash from the policy.

Interest paid by individual Owners of a Policy will ordinarily not be deductible. You should consult a qualified tax advisor as to the deductibility of interest paid, or accrued, by business Owners of a Policy. (See “Business-Owned Life Insurance”).

Subject to the agreement of the Company, and the Owner meeting any conditions set by the Company, a Policy may be exchanged tax-free for another life insurance policy covering the same Insured (or, in the case of joint life insurance,


Variable Life Prospectus			27

covering the Insureds or a surviving Insured) or an annuity contract with the same owner (or, in the case of an annuity owned by a non-natural owner, if the annuitant is the same as the life insurance policy insured). The Code also allows certain policies to be exchanged for stand-alone and combination long-term care policies on a tax-free basis. Policies that are exchanged for life insurance policies after 2019 may only be exchanged for life insurance policies using 2017 CSO mortality tables. Any cash received or loan repaid in an exchange will be taxed to the extent of the gain in the Policy (i.e., on gain-first basis).

Ownership of a Policy, or an interest in the Policy, may be transferred. If the transfer is for valuable consideration, it is taxable to the extent the proceeds or fair market value of property received exceed the basis of the Policy. The transfer of a Policy with a loan in excess of Policy basis is considered a sale to the extent of the loan, and the loan is treated as “sales proceeds” paid to the transferor. If a Policy, or an interest in a Policy were transferred for valuable consideration, the death benefit will be taxable as ordinary income to the extent it exceeds the sum of the purchase price and subsequent premiums paid by the new owner. However, the death benefit will not be taxable if both of the following criteria are satisfied:

The transfer was not a “Reportable Policy Sale”, and

The transferee is the insured, a partner of the insured, a partnership in which the insured is a partner or a corporation in which the insured is a shareholder or officer or the basis of the Policy is carried over, in whole or in part, in the transfer. You should seek qualified tax advice if you plan a transfer ownership.

A Reportable Policy Sale is defined by Code section 101(a)(3), which was enacted in 2017 as part of the Tax Cuts and Jobs Act. A Reportable Policy Sale occurs when a Policy or an interest in the Policy is transferred, directly or indirectly, for valuable consideration and the acquirer does not have a “substantial family, business, or financial relationship with the insured apart from the acquirer’s interest in” the Policy. An example of an indirect transfer is an acquisition of a partnership that owns the Policy. If a Reportable Policy Sale occurs, the acquirer and the insurance company are required to send information about the sale to the IRS and the transferor.

Where the Policy cash value is distributed as periodic payments under a payment plan, part or all of the taxable payments may be subject to an additional 3.8% Medicare tax. The tax will be assessed on the Owner’s net investment income for the year to the extent that the Owner’s adjusted gross income (with slight modifications) exceeds $250,000 (married filing jointly or surviving spouse), $125,000 (married filing separately) or $200,000 (other filers) (not indexed) Under final regulations issued by the IRS, “net investment income” may, among other things, include among other things the transfer of a life insurance policy that constitutes a sale, interest paid on the Death Benefit and taxable distributions from life insurance policies held in arrangements that constitute “passive activities”. You should seek qualified tax advice.

Modified Endowment Contracts (MEC) A modified endowment contract (“MEC”) is a type of life insurance contract that is taxed less favorably on lifetime distributions than other life insurance contracts. A MEC has less favorable tax treatment because it is considered to be too investment oriented. Generally, a Policy will be classified as a MEC if the cumulative premiums paid during the first seven Policy Years after issue, or after a “material change” (described below), exceed the policy’s “seven-pay” limit. The seven-year time period is commonly referred to as the “seven-pay period”. Code Section 7702A defines the seven-pay limit as the sum of the premiums (net of expense and administrative charges) that would have to be paid in order for the Policy to be fully paid-up after seven level annual payments based on defined interest and mortality assumptions. If premiums in excess of the seven-pay limit are paid during a seven-pay period, a Policy will be a MEC. However, a policy will not be a MEC if the excess premiums are refunded, with interest, within 60 days after the end of the Policy Year in which they are paid. For purposes of measuring this 60-day refund period, the term “Policy Year” refers to the year that starts on the date of a material change if that date is different than the Policy Date. If excess premium is refunded, all Policy values are recalculated as though the excess premium had never been paid.

A policy can also become a MEC if the benefits under the Policy are reduced during the seven-pay period or, in the case of joint life Policies, the lifetime of either Insured. If a reduction occurs during a seven-pay period, the seven-pay premium limit will be redetermined based on the reduced level of benefits. All premiums paid during the seven-pay period must be retroactively tested against the new, lower, seven-pay limit. If the premiums previously paid are greater than the recalculated seven-pay premium level limit, the Policy will become a MEC. This means that a reduction of Policy benefits can result in a MEC because of premiums paid in prior years even if those premiums did not exceed the policy’s seven-pay limit at the time they were paid. A reduction in benefits includes a decrease in the amount of coverage, the termination or reduction of certain riders, a withdrawal or any other action resulting in a surrender of Cash Value to you according to the terms of the Policy, an election of the paid-up option or, in some cases, a lapsing of the Policy where the Policy is not reinstated within 90 days. A life insurance policy which is received in exchange for a MEC will also be considered a MEC. In the case of joint life Policies, the reduction test must be applied during the lifetime of either Insured rather than only during seven-pay periods.

Whenever there is a “material change” under a Policy, it will generally be treated as a new contract for purposes of determining whether the Policy is a MEC. This means that a new seven-pay period begins with a new seven-pay limit. The new seven-pay limit is determined by taking into account the value of the Policy at the time of such change. A material change could occur as a result of certain changes to the benefits or terms of the Policy, such as a change in a death benefit option or a change in the Insured(s), if allowable under your Policy. A material change could occur as a result of an


28		Variable Life Prospectus

increase in the death benefit, the addition of a benefit or the payment of a premium after the seven-pay period, which could be considered “unnecessary” under the Code.

If a Policy is a MEC, any distribution from the Policy will be treated as a distribution of gain first, subject to ordinary income taxation. Distributions for this purpose include a loan, a withdrawal of Cash Value, a surrender of the Policy, and dividends paid in cash. We do not report dividends retained by the Company to purchase paid-up additions as “Distributions”. Distributions taken within the two-year period prior to the Policy becoming a MEC may also be taxed under the MEC tax rules. The Policy basis is increased to the extent a loan is a taxable distribution from a MEC. For these purposes, the term “loan”, includes an increase in Policy Debt due to accrued but unpaid loan interest, or an assignment or pledge of the policy to secure a loan. For MECs, the basis would be increased by the amount of any prior loan under the Policy that was considered taxable income. For purposes of determining the taxable portion of any distribution, all MECs issued by Northwestern Mutual to the same Owner (excluding certain qualified plans) during any calendar year are to be aggregated. The Secretary of the Treasury has authority to prescribe additional rules to prevent avoidance of gain-first taxation on distributions from MECs.

A 10% penalty tax will apply to the taxable portion of a distribution from a MEC. The penalty tax will not, however, apply to distributions (i) to taxpayers 59¹⁄₂ years of age or older, (ii) in the case of a disability (as defined in the Code) or (iii) received as part of a series of substantially equal periodic annuity payments for the life (or life expectancy) of the taxpayer or the joint lives (or joint life expectancies) of the taxpayer and the taxpayer’s beneficiaries. The exceptions generally do not apply to life insurance policies owned by corporations or other entities.

Estate and Generation Skipping Transfer Taxes If the Insured owns, or has any incidents of ownership in, the Policy, the amount of the Death Benefit will generally be includible in the Insured’s estate for federal estate tax purposes and any applicable state inheritance tax. If a Policy is a joint life Policy, the Death Benefit will be includible in the estate of the second to die if that that individual owned or had any incidents of ownership in, the policy at the time of death. In some circumstances, the Death Benefit of a policy may be included in an Insured’s estate even if not owned at the time of death. This may occur if the Insured transferred an ownership interest, or an incident of ownership, in a policy within three years of death. If the Owner dies, but an Insured is still alive, the fair market value of the Policy will be includible in the Owner’s estate. With appropriate estate planning, an unlimited marital deduction may permit deferral of federal estate and gift taxes until the death of the Owner’s surviving spouse.

If ownership of a Policy is transferred, either directly or in trust, to a person two or more generations younger than the Owner, the value of the Policy may be subject to a generation skipping transfer tax.

An exemption limit of $5 million (single)/$10 million (married) (with inflation indexing after 2011) and a maximum rate of 40% applies for purposes of the estate, gift and generation skipping transfer taxes. In addition, any unused estate exemption limit may be carried over to the surviving spouse.

Business-Owned Life Insurance Business-owned life insurance may be subject to certain additional rules. Section 101(j) of the Code provides that a portion of the Death Benefit payable under business-owned life insurance in which the business is also the beneficiary will be taxable to the extent it exceeds the premiums or other consideration the business paid for the policy. This rule will not apply if (i) the Insured is an eligible employee and (ii) certain notice and consent requirements are satisfied before the policy is issued. Generally, an eligible employee is someone who was an employee at any time during the 12-month period before death, a director, a person who owns more than 5% of the business, an employee earning more than $120,000 annually (increased for cost of living), one of the highest 5 paid officers or an employee who is among the highest paid 35% of employees. The law also imposes an annual reporting and record-keeping obligation on the employer. Increases in Policy or Cash Value may also be subject to tax under the corporation alternative minimum tax provisions.

Section 264(a)(1) of the Code generally disallows a deduction for premiums paid on Policies by anyone who is directly or indirectly a beneficiary under the Policy. Interest on debt that is related to or is incurred to purchase or carry life insurance might be deductible in certain, limited, circumstances set forth in Code Section 264. For example, interest paid or accrued for up to an aggregate of $50,000 of indebtedness with respect to life insurance covering a “key person” may be deductible. Generally, a key person is defined as an officer or a 20% owner. However, the number of key persons will be limited to the greater of (a) five individuals, or (b) the lesser of 5% of the total officers and employees of the taxpayer or 20 individuals. Deductible interest for these Policies will be subject to limits based on current market rates.

In addition, if a business owns life insurance with cash value, section 264(f) of the Code may disallow a portion of a business’s non-life insurance related interest deduction. The disallowance is based on a ratio that compares the amount of unborrowed life insurance Cash Value to the adjusted basis of other business assets. Certain policies may be excluded the disallowance calculation. These include policies held by natural persons unless the business is a direct or indirect beneficiary under the policy and policies owned by a business and insuring an individual who at the time the policy is issued is an employee, director, officer or 20% owner (as well as joint policies insuring 20% owners and their spouses). The IRS has ruled that a policy received in a tax-free exchange is newly issued for this purpose.

The IRS has ruled privately that losses in business-owned life insurance could be deducted upon the surrender of the policy if there was no reasonable prospect of recovery, but that the losses would be calculated by reducing the basis of the policy


Variable Life Prospectus			29

by the annual cost of the insurance protection provided by the policy. Private rulings apply only to the taxpayer who receives the ruling but may be indicative of the IRS’s thinking on an issue.

Special rules under the Code govern how life insurance companies calculate income tax deductions. Under these rules the annual increase in the cash value of life insurance policies owned by life insurance companies may limit the company’s deductions, resulting in an overall increase in its taxable income. In Revenue Procedure 2007-61, the IRS provided a safe harbor under which the annual increase in cash value of life insurance policies covering no more than 35% of the company’s employees, directors, officers and 20% owners will not limit the life insurance company’s deductions. Additionally, the Revenue Procedure included language that the tax-deferred nature of such contracts remains subject to challenge by the IRS under other provisions of the tax law, including judicial doctrines such as the business purpose doctrine.

Split Dollar Arrangements Life insurance purchased under a split dollar arrangement is subject to special tax rules. Treasury regulations regarding the taxation of split dollar arrangements apply only to arrangements entered into or materially changed after September 17, 2003. The regulations provide that such split dollar arrangements must be taxed under one of two mutually exclusive tax regimes depending on the ownership of the underlying life insurance policy. Collateral assignment split dollar arrangements, in which the employee owns the policy, must be taxed under a loan regime. Where such an arrangement imposes a below market interest rate or no interest rate, the employee is taxed on the imputed interest under Section 7872 of the Code. Endorsement split dollar arrangements, in which the employer owns the policy, must be taxed under an economic benefit regime. Under this regime, the employee is taxed each year on (i) the value of the current life insurance protection provided to the employee, (ii) the increase in the amount of policy Cash Value to which the employee has current access, and (iii) the value of any other economic benefits provided to the employee during the taxable year.

Under the Sarbanes-Oxley Act of 2002, it is a criminal offense for an employer with publicly traded stock to extend or arrange a personal loan to a director or executive officer after July 30, 2002. One issue that has not been clarified is whether each premium paid by such an employer under a split dollar arrangement with a director or executive officer is a personal loan subject to the new law.

Section 409A of the Code imposes requirements for nonqualified deferred compensation plans with regard to the timing of deferrals, distribution triggers, funding mechanisms and reporting requirements. Nonqualified deferred compensation plans that fail to meet these conditions are taxed currently on all compensation previously deferred and interest earned thereon and assessed an additional 20% penalty. The law does not limit the use of life insurance as an informal funding mechanism for nonqualified deferred compensation plans, but IRS Notice 2007-34 treats certain split dollar arrangements as nonqualified deferred compensation plans that must comply with the new rules. The effective date of these rules was December 31, 2008. Congress has also considered limiting an individual’s annual aggregate deferrals to a nonqualified deferred compensation plan to $1,000,000.

Valuation of Life Insurance Special valuation rules apply to life insurance contracts distributed from a qualified plan to a participant or transferred by an employer to an employee. IRS Rev. Proc. 2005-25 provides safe harbor formulas for valuing variable and non-variable life insurance policies. Generally, the safe harbor value is the greater of (i) the sum of the interpolated terminal reserve, any unearned premiums, and a pro rata portion of the estimated dividends for the Policy Year; or (ii) the cash value without reduction for any surrender charges (but adjusted by a surrender factor for policies distributed from qualified plans) multiplied by a factor specified in Rev. Proc. 2005-25. These rules do not apply to split dollar arrangements entered into on or before September 17, 2003 and not materially modified thereafter.

Other Tax Considerations Under Code Section 6011, taxpayers are required to annually report all “reportable transactions”. Regulations under Code Section 6011 provide a list of several types of reportable transactions, some of which may involve life insurance policies. For example, in some circumstances a reportable transaction might exist if life insurance is owned by a welfare benefit plan. “Reportable transactions” also include transactions that create significant differences between the amount of any item for purposes of determining income, gain, expense or loss for tax purposes differs by more than $10 million, on a gross basis, from the amount of the item for purposes for book purposes. However, Rev. Proc. 2004-67 held that the purchase of life insurance policies that creates such a difference does not, by itself, constitute a “reportable transaction.” The rules related to reportable transactions are complicated and you should consult a qualified tax advisor before purchasing any insurance policy as part of a transaction.

Distribution of the Policy

We sell the Policy through our Financial Representatives who also are registered representatives of Northwestern Mutual Investment Services, LLC (“NMIS”). NMIS, our wholly-owned company, was organized under Wisconsin law in 1998 and is located at 720 East Wisconsin Avenue, Milwaukee, Wisconsin 53202. NMIS is a registered broker-dealer under

the Securities Exchange Act of 1934 and is a member of the Financial Industry Regulatory Authority. NMIS is the principal underwriter and distributor of the Policy and has entered into a Distribution Agreement with us.

Northwestern Mutual variable insurance and annuity products are available exclusively through NMIS and its registered


30		Variable Life Prospectus

representatives and cannot be held with or transferred to an unaffiliated broker-dealer. Except in limited circumstances, NMIS registered representatives are required to offer Northwestern Mutual variable insurance and annuity products. The amount and timing of sales compensation paid by insurance companies varies. The commissions, benefits, and other sales compensation that NMIS and its registered representatives receive for the sale of a Northwestern Mutual variable insurance or annuity product might be more or less than that received for the sale of a comparable product from another company.

The maximum commission payable to the registered representative who sold the Whole Life or Extra Ordinary Life Policy is 55% of the premium during the first Policy Year; 9% of the premium in Policy Years 2-3; 6% of the premium in Policy Years 4-7; 3% of the premium in Policy Years 8-10; and 2% of Premium Payments thereafter. For the Single Premium Life Policy, commissions were 2.75% of the premium. Registered representatives may receive less than the maximum commission or no commission in certain circumstances according to pre-established guidelines. We may also pay new registered representatives differently during a training period. The entire amount of sales commissions paid to registered representatives is passed through NMIS to the registered representative who sold the Policy and to his or her managers. The Company pays compensation and bonuses for the management team of NMIS, and other expenses of distributing the Policies.

Because registered representatives of NMIS are also our appointed agents, they may be eligible for various cash benefits, such as bonuses, insurance benefits, retirement benefits, and non-cash compensation programs that we offer, such as conferences, achievement recognition, prizes, and awards. In addition, registered representatives of NMIS who meet certain productivity, persistency, and length of service standards and/or their managers may be eligible for additional compensation. For example, registered representatives who meet certain annual sales production requirements with respect to their sales of Northwestern Mutual insurance and annuity products can qualify to receive additional cash compensation for their other sales of investment products and services. Sales of the Policies help registered representatives and/or their managers qualify for such compensation and benefits. Certain registered representatives of NMIS may receive other payments from us for the recruitment, training, development, and supervision of financial representatives, production of promotional literature and similar services.

Commissions and other incentives and payments described above are not charged directly to Owners or to the Separate Account. We intend to recoup commissions and other sales expenses through fees and charges deducted under the Policy. NMIS registered representatives receive ongoing servicing compensation related to the Policies, but may be ineligible to receive ongoing servicing compensation paid by issuers of other investment products for certain smaller accounts.

Glossary of Terms

APPLICATION

The form completed by the applicant when applying for coverage under the Policy. This includes any:

amendments or endorsements;

supplemental Applications;

reinstatement Applications; and

Policy change Applications.

ATTAINED AGE

The Insured’s Issue Age listed in the Policy, plus the number of complete Policy Years that have elapsed since the Policy Date.

CASH VALUE

The amount available in cash if the Policy is surrendered. Please note that in certain contexts outside of the Prospectus, such as sales literature, notices and/or other materials, the term Accumulated Value After Loan and Surrender Charge may be used in place of Cash Value. In some circumstances, the terms Accumulated Value After Loan, Accumulated Value After Surrender Charge, or Net Accumulated Value may be used to describe your Cash Value, as appropriate.

DATE OF ISSUE

The date on which insurance coverage takes effect as shown in the Policy.

DEATH BENEFIT

The gross amount payable to the beneficiary upon the death of the Insured, before the deduction of Policy Debt and other adjustments.

DIVISION

A subdivision of the Separate Account. We invest each Division’s assets exclusively in shares of one Portfolio.

FINANCIAL REPRESENTATIVE

An individual who is authorized to sell you the Policy and who is both licensed as a Northwestern Mutual insurance agent and registered as a representative of our affiliate, Northwestern Mutual Investment Services, LLC, the principal underwriter of the Policy.

FUND

Each Fund is registered under the 1940 Act as an open-end management investment company or as a unit investment trust, or is not required to be registered under the Act. Each Portfolio of the Funds is available as an investment option under the Policy. The assets of each of the Divisions of the Separate Account are used to purchase shares of the corresponding Portfolio of a Fund.


Variable Life Prospectus			31

GENERAL ACCOUNT

All assets of the Company, other than those held in the Separate Account or in other separate accounts that have been or may be established by the Company.

GOOD ORDER

Your request or payment meets all the current requirements necessary for us to process it. For certain requests this may include, as applicable, the return of proceeds, evidence of insurability, underwriting, MEC-limit (or insurance qualification) requirements, any premium payments due, instructions as to payment due dates, or proper completion of certain Northwestern Mutual forms.

HOME OFFICE

Our office at 720 East Wisconsin Avenue, Milwaukee, Wisconsin 53202-4797.

INCOME PLAN

An optional method of receiving the Death Benefit, maturity benefit, surrender proceeds or withdrawal proceeds of an insurance policy or annuity contract through a series of periodic payments. An Income Plan may also be known as a “payment plan.”

INSURED

The person named as the Insured on the Application and in the Policy.

INVESTED ASSETS

The sum of all amounts in the Divisions of the Separate Account.

ISSUE AGE

The Insured’s age on his or her birthday nearest the Policy Date.

MEC

Modified endowment contract as described in Section 7702A of the Internal Revenue Code. A modified endowment contract is a life insurance contract that is considered too investment oriented and is taxed less favorably on lifetime distributions than other life insurance contracts. See the “Tax Considerations” section for more detailed information.

NET PREMIUM

The amount of Premium Payment remaining after Premium charges have been deducted.

NYSE

New York Stock Exchange.

OWNER (You, Your)

The person named in the Application as the Owner, or the person who becomes Owner of a Policy by transfer or succession.

POLICY ANNIVERSARY

The same day and month as the Policy Date in each year following the first Policy Year.

POLICY DATE

The date shown in the Policy from which the following are computed, among other things:

Policy Year;

Policy Anniversary;

the Issue Age of Insured; and

the Attained Age of the Insured.

POLICY DEBT

The total amount of all outstanding Policy loans, including both principal and accrued interest.

POLICY VALUE

The sum of Invested Assets and Policy Debt less applicable charges. Please note that in certain contexts outside of the Prospectus, such as sales literature, notices and/or other materials, the term Accumulated Value may be used in place of Policy Value. In some circumstances, the terms Accumulated Value After Loan, Accumulated Value After Surrender Charge, or Net Accumulated Value may be used to describe your Policy Value after deductions for a surrender charge or an outstanding loan, as appropriate.

POLICY YEAR

A year that starts on the Policy Date or on a Policy Anniversary.

PORTFOLIO

A series of a Fund available for investment under the Policy, which corresponds to a particular Division of the Separate Account.

PREMIUM PAYMENTS

All payments you make under the Policy other than loan repayments and transaction charges.

SEPARATE ACCOUNT

Northwestern Mutual Variable Life Account.


32		Variable Life Prospectus

Additional Information

More information about the Separate Account is included in a Statement of Additional Information (“SAI”), which is dated the same day as this prospectus, is incorporated by reference into this prospectus, and is available free of charge from the Company. To request a free copy of the Separate Account’s SAI, or current annual report, call the Variable Life Service Center us toll-free at 1-866-424-2609. Under certain circumstances you or your financial representative may be able to obtain these documents online at www.northwesternmutual.com. Information about the Separate Account (including the SAI) can be reviewed and copied at the Public Reference Room of the SEC in Washington, DC. Information on the operation of the Public Reference Room may be obtained by calling the SEC at 1-202-551-8090. Reports and other information about the Separate Account are available on the SEC’s Internet site at http://www.sec.gov, or they may be obtained, upon payment of a duplicating fee, by writing the Public Reference Section of the SEC, 100 F Street, NE, Washington, DC 20549-0102.

Your Northwestern Mutual Financial Representative will provide you with illustrations for your Policy free of charge upon your request. The illustrations show how the Death Benefit, Invested Assets and cash surrender value for the Policy would vary based on hypothetical investment results. Your Northwestern Mutual Financial Representative will also respond to other inquiries you may have regarding the Policy, or you may contact the Variable Life Service Center at 1-866-424-2609.

Investment Company Act File No. 811-3989


Variable Life Prospectus			33

STATEMENT OF ADDITIONAL INFORMATION

May 1, 2020

VARIABLE LIFE

Whole Life

Extra Ordinary Life

Single Premium Life

Issued by The Northwestern Mutual Life Insurance Company

and

Northwestern Mutual Variable Life Account

(Account)

We no longer issue the three Policies described in this Statement of Additional Information.

The Policies we currently offer are described in separate Prospectuses and

Statements of Additional Information.

This Statement of Additional Information (“SAI”) is not a prospectus, but supplements, and should be read in conjunction with the prospectus for the Policies identified above and dated the same date as this SAI. The prospectus may be obtained by writing The Northwestern Mutual Life Insurance Company (“Northwestern Mutual”), 720 East Wisconsin Avenue, Milwaukee, Wisconsin 53202, or by calling telephone number 1-866-424-2609.

B-1

TABLE OF CONTENTS


	Page

DISTRIBUTION OF THE POLICIES		B-3

EXPERTS		B-3

FINANCIAL STATEMENTS OF THE ACCOUNT		F-1

FINANCIAL STATEMENTS OF NORTHWESTERN MUTUAL		NM-1

B-2

DISTRIBUTION OF THE POLICIES

The Policy is offered on a continuous basis exclusively through individuals who, in addition to being life insurance agents of Northwestern Mutual, are registered representatives of Northwestern Mutual Investment Services, LLC (“NMIS”). NMIS is our wholly-owned company. The principal business address of NMIS is 720 East Wisconsin Avenue, Milwaukee, Wisconsin 53202.

NMIS is the principal underwriter of the Policies for purposes of the federal securities laws. We paid the following amounts to NMIS with respect to sales of variable life insurance policies issued in connection with the Account during each of the last three fiscal years representing commission payments NMIS made to our agents and related benefits. None of these amounts was retained by NMIS and no amounts were paid to other underwriters or broker-dealers. We also paid additional amounts to NMIS in reimbursement for other expenses related to the distribution of variable life insurance policies.


Year	Amount
2019	$	834,668
2018	$	1,111,244
2017	$	1,718,429

NMIS also provides certain services related to the administration of payment plans under the Policies pursuant to an administrative services contract with Northwestern Mutual. In exchange for these services, NMIS receives compensation to cover the actual costs incurred by NMIS in performing these services.

EXPERTS

The statutory financial statements of The Northwestern Mutual Life Insurance Company as of December 31, 2019 and 2018 and for each of the three years in the period ended December 31, 2019, and the financial statements of Northwestern Mutual Variable Life Account as of December 31, 2019 and for the periods indicated, included in this Statement of Additional Information constituting part of this Registration Statement, have been so included in reliance on the reports of PricewaterhouseCoopers LLP, an independent registered public accounting firm, given on the authority of said firm as experts in auditing and accounting. The address of PricewaterhouseCoopers LLP is 833 East Michigan Street, Suite 1200, Milwaukee, Wisconsin 53202.

B-3

Annual Report December 31, 2019

Northwestern Mutual Variable Life Account

Financial Statements

Report of Independent Registered Public Accounting Firm

To the Board of Trustees of The Northwestern Mutual Life Insurance Company and the Policyowners of Northwestern Mutual Variable Life Account

Opinions on the Financial Statements

We have audited the accompanying statements of assets and liabilities of each of the divisions of Northwestern Mutual Variable Life Account indicated in the table below as of December 31, 2019, and the related statements of operations and of changes in net assets for each of the periods indicated in the table below, including the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of each of the divisions of Northwestern Mutual Variable Life Account as of December 31, 2019, and the results of each of their operations and the changes in each of their net assets for the periods indicated in the table below, in conformity with accounting principles generally accepted in the United States of America.

Growth Stock Division	Mid Cap Value Division	Select Bond Division	U.S. Strategic Equity
(1)	(1)	(1)	Division (1)
Focused Appreciation	Small Cap Growth	Long-Term U.S.	U.S. Small Cap Equity
Division (1)	Stock Division (1)	Government Bond	Division (1)
		Division (1)
Large Cap Core Stock	Index 600 Stock	Inflation Protection	International
Division (1)	Division (1)	Division (1)	Developed Markets
			Division (1)
Large Cap Blend	Small Cap Value	High Yield Bond	Strategic Bond Division
Division (1)	Division (1)	Division (1)	(1)
Index 500 Stock	International Growth	Multi-Sector Bond	Global Real Estate
Division (1)	Division (1)	Division (1)	Securities Division (1)
Large Company Value	Research International	Balanced Division (1)	LifePoints Moderate
Division (1)	Core Division (1)		Strategy Division (1)
Domestic Equity	International Equity	Asset Allocation	LifePoints Balanced
Division (1)	Division (1)	Division (1)	Strategy Division (1)
Equity Income Division	Emerging Markets	Fidelity VIP Mid Cap	LifePoints Growth
(1)	Equity Division (1)	Division (1)	Strategy Division (1)
Mid Cap Growth Stock	Government Money	Fidelity VIP	LifePoints Equity
Division (1)	Market Division (1)	Contrafund Division (1)	Growth Strategy
			Division (1)
Index 400 Stock	Short-Term Bond	AMT Sustainable	Credit Suisse Trust
Division (1)	Division (1)	Equity Division (1)	Commodity Return
			Strategy Division (1)

(1) Statement of operations for the year ended December 31, 2019 and statement of changes in net assets for the years ended December 31, 2019 and 2018

Basis for Opinions

These financial statements are the responsibility of The Northwestern Mutual Life Insurance Company management. Our responsibility is to express an opinion on the financial statements of each of the divisions of Northwestern Mutual Variable Life Account based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to each of the divisions of Northwestern Mutual Variable Life Account in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits of these financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. Our procedures included confirmation of investments owned as of December 31, 2019 by correspondence with the custodians and the transfer agents of the investee mutual funds. We believe that our audits provide a reasonable basis for our opinions.

/s/ PricewaterhouseCoopers LLP Milwaukee, Wisconsin

April 29, 2020

We have served as the auditor of one or more of the divisions of Northwestern Mutual Variable Life Account since 1984.

Northwestern Mutual Variable Life Account

Table of Contents

Statements of Assets and Liabilities	F-1
Statements of Operations	F-9
Statements of Changes on Net Assets	F-12
Notes to Financial Statements	F-22

Statements of Assets and Liabilities

NORTHWESTERN MUTUAL VARIABLE LIFE ACCOUNT

December 31, 2019 (in thousands, except accumulation values)

								Focused
					Growth Stock		Appreciation		Large Cap Core			Large Cap		Index 500
						Division		Division	Stock Division		Blend Division		Stock Division
Assets:
Assets:
	Investments, at fair value (1) Northwestern
	Mutual Series Fund, Inc Fidelity Variable			$		545,300	$	219,823	$	319,372	$	13,261	$	1,677,242
	Insurance Products Fund					-		-		-		-		-
	Neuberger Berman Advisers Management Trust					-		-		-		-		-
	Russell Investment Funds					-		-		-		-		-
	Credit Suisse Trust					-		-		-		-		-
	Due from Northwestern Mutual Life Insurance Company					-		-		-		-		-
	Total Assets
	Total Assets					545,300		219,823		319,372		13,261		1,677,242
Liabilities:
	t	oMrtLhwInessutrear cMeuCtuoal Life Insurance Company				33		4		6		1		471
	Due ttoN		n
	Due to Participants					-		-		-		-		-
	Total Liabilities
	Total Liabilities					33		4		6		1		471

Total Net Assets					$	545,267	$	219,819	$	319,366	$	13,260	$	1,676,771
Net Assets:
Net Assets:
	Variable Life Policies Issued
	Before October 11, 1995
	Policyowners' Equity			$		45,973	$	15,314	$	33,796	$	708	$	219,833
	Northwestern Mutual Equity					329		91		302		7		1,418
	Variable CompLife Policies Issued Between
	October 11, 1995 and December 31, 2008 (2)
	Policyowners' Equity					473,486		182,414		269,166		11,863		1,361,060
	Northwestern Mutual Equity					5,542		2,384		3,327		147		15,033
	Variable Executive Life Policies Issued Between
	March 2, 1998 and December 31, 2008 (3)
	Policyowners' Equity					9,260		5,556		5,699		371		29,013
	Variable Joint Life Policies Issued Between
	December 10, 1998 and December 31, 2008 (4)
	Policyowners' Equity					10,677		14,060		7,076		164		50,414
Total Net Assets
Total Net Assets					$	545,267	$	219,819	$	319,366	$	13,260	$	1,676,771
(1)	Investments, at cost
(1)	Investments, at cost			$		433,153	$	163,045	$	277,828	$	12,293	$	935,282
	Mutual Fund Shares Held					171,586		69,257		197,265		10,887		289,879
(2)	Accumulation Unit Value			$		6.844781	$	6.365138	$	4.680129	$	2.430590	$	7.598098
	Units Outstanding					69,984		29,033		58,223		4,941		181,113
(3)	Accumulation Unit Value			$		96.585761	$	68.873586	$	65.424142	$	21.249241	$	178.109105
	Units Outstanding					96		81		87		17		163
(4)	Accumulation Unit Value			$		96.585761	$	68.873586	$	65.424142	$	21.249241	$	178.109105
	Units Outstanding					111		204		108		8		283

(a)Amount is less than 1,000

The Accompanying Notes are an Integral Part of these Financial Statements.

F-1

Statements of Assets and Liabilities

NORTHWESTERN MUTUAL VARIABLE LIFE ACCOUNT

December 31, 2019 (in thousands, except accumulation values)

						Large						Mid Cap
					Company Value			Domestic	Equity Income		Growth Stock			Index 400
						Division	Equity Division			Division		Division	Stock Division
Assets:
Assets:
	Investments, at fair value (1) Northwestern
	Mutual Series Fund, Inc Fidelity Variable			$		15,611	$	223,756	$	137,257	$	562,875	$	372,351
	Insurance Products Fund					-		-		-		-		-
	Neuberger Berman Advisers Management Trust					-		-		-		-		-
	Russell Investment Funds					-		-		-		-		-
	Credit Suisse Trust					-		-		-		-		-
	Due from Northwestern Mutual Life Insurance Company					2		27		-		21		17
	Total Assets
	Total Assets					15,613		223,783		137,257		562,896		372,368
Liabilities:
	t	oMrtLhwInessutrear cMeuCtuoal Life Insurance Company				-		-		2		-		-
	Due ttoN		n
	Due to Participants					-		-		-		-		-
	Total Liabilities					-		-		2		-		-
Total Net Assets				$		15,613	$	223,783	$	137,255	$	562,896	$	372,368
Net Assets:
Net Assets:
	Variable Life Policies Issued
	Before October 11, 1995
	Policyowners' Equity			$		1,303	$	18,518	$	11,176	$	75,677	$	18,574
	Northwestern Mutual Equity					9		143		76		675		131
	Variable CompLife Policies Issued Between
	October 11, 1995 and December 31, 2008 (2)
	Policyowners' Equity					13,789		190,691		115,653		467,120		327,856
	Northwestern Mutual Equity					169		2,686		1,533		5,679		3,963
	Variable Executive Life Policies Issued Between
	March 2, 1998 and December 31, 2008 (3)
	Policyowners' Equity					11		5,524		4,159		5,145		10,665
	Variable Joint Life Policies Issued Between
	December 10, 1998 and December 31, 2008 (4)
	Policyowners' Equity					332		6,221		4,658		8,600		11,179
Total Net Assets
Total Net Assets					$	15,613	$	223,783	$	137,255	$	562,896	$	372,368
(1)	Investments, at cost
(1)	Investments, at cost			$		15,184	$	147,042	$	118,833	$	511,278	$	305,857
	Mutual Fund Shares Held					15,113		127,860		77,197		164,391		184,515
(2)	Accumulation Unit Value			$		2.334690	$	3.219819	$	3.739921	$	5.429275	$	5.677085
	Units Outstanding					5,979		60,059		31,334		87,083		58,449
(3)	Accumulation Unit Value			$		20.083819	$	35.207252	$	40.467475	$	154.540637	$	66.313755
	Units Outstanding					1		157		103		33		161
(4)	Accumulation Unit Value			$		20.083819	$	35.207252	$	40.467475	$	154.540637	$	66.313755
	Units Outstanding					17		177		115		56		169

(a)Amount is less than 1,000

The Accompanying Notes are an Integral Part of these Financial Statements. F-2

Statements of Assets and Liabilities

NORTHWESTERN MUTUAL VARIABLE LIFE ACCOUNT

December 31, 2019 (in thousands, except accumulation values)

								Small Cap					International
					Mid Cap Value		Growth Stock			Index 600		Small Cap		Growth
						Division		Division	Stock Division		Value Division			Division
Assets:
Assets:
	Investments, at fair value (1) Northwestern
	Mutual Series Fund, Inc Fidelity Variable			$		76,432	$	330,596	$	50,266	$	204,801	$	122,988
	Insurance Products Fund					-		-		-		-		-
	Neuberger Berman Advisers Management Trust					-		-		-		-		-
	Russell Investment Funds					-		-		-		-		-
	Credit Suisse Trust					-		-		-		-		-
	Due from Northwestern Mutual Life Insurance Company					9		7		11		12		-
	Total Assets
	Total Assets					76,441		330,603		50,277		204,813		122,988
Liabilities:
	t	oMrtLhwInessutrear cMeuCtuoal Life Insurance Company				-		-		-		-		7
	Due ttoN		n
	Due to Participants					-		-		-		-		-
	Total Liabilities					-		-		-		-		7
Total Net Assets				$		76,441	$	330,603	$	50,277	$	204,813	$	122,981
Net Assets:
Net Assets:
	Variable Life Policies Issued
	Before October 11, 1995
	Policyowners' Equity			$		5,218	$	14,676	$	4,203	$	14,647	$	5,905
	Northwestern Mutual Equity					38		101		31		111		48
	Variable CompLife Policies Issued Between
	October 11, 1995 and December 31, 2008 (2)
	Policyowners' Equity					66,609		298,214		42,686		179,175		107,270
	Northwestern Mutual Equity					885		3,851		507		2,437		1,574
	Variable Executive Life Policies Issued Between
	March 2, 1998 and December 31, 2008 (3)
	Policyowners' Equity					1,657		5,299		1,506		2,215		3,499
	Variable Joint Life Policies Issued Between
	December 10, 1998 and December 31, 2008 (4)
	Policyowners' Equity					2,034		8,462		1,344		6,228		4,685
Total Net Assets
Total Net Assets					$	76,441	$	330,603	$	50,277	$	204,813	$	122,981
(1)	Investments, at cost
(1)	Investments, at cost			$		73,076	$	261,844	$	47,284	$	185,322	$	85,923
	Mutual Fund Shares Held					46,211		121,364		35,078		94,422		66,480
(2)	Accumulation Unit Value			$		4.554015	$	5.829238	$	2.411252	$	4.791826	$	2.645647
	Units Outstanding					14,821		51,819		17,913		37,900		41,141
(3)	Accumulation Unit Value			$		49.276848	$	78.030714	$	27.399696	$	52.395678	$	28.928599
	Units Outstanding					34		68		55		42		121
(4)	Accumulation Unit Value			$		49.276848	$	78.030714	$	27.399696	$	52.395678	$	28.928599
	Units Outstanding					41		108		43		119		156

(a)Amount is less than 1,000

The Accompanying Notes are an Integral Part of these Financial Statements. F-3

Statements of Assets and Liabilities

NORTHWESTERN MUTUAL VARIABLE LIFE ACCOUNT

December 31, 2019 (in thousands, except accumulation values)

						Research				Emerging	Government
					International		International		Markets Equity		Money Market			Short-Term
					Core Division		Equity Division			Division		Division	Bond Division
Assets:
Assets:
	Investments, at fair value (1) Northwestern
	Mutual Series Fund, Inc Fidelity Variable			$		53,493	$	526,473	$	69,247	$	152,159	$	30,337
	Insurance Products Fund					-		-		-		-		-
	Neuberger Berman Advisers Management Trust					-		-		-		-		-
	Russell Investment Funds					-		-		-		-		-
	Credit Suisse Trust					-		-		-		-		-
	Due from Northwestern Mutual Life Insurance Company					152		-		4		18		3
	Total Assets
	Total Assets					53,645		526,473		69,251		152,177		30,340
Liabilities:
	t	oMrtLhwInessutrear cMeuCtuoal Life Insurance Company				-		93		-		-		-
	Due ttoN		n
	Due to Participants					-		-		-		30		-
	Total Liabilities					-		93		-		30		-
Total Net Assets				$		53,645	$	526,380	$	69,251	$	152,147	$	30,340
Net Assets:
Net Assets:
	Variable Life Policies Issued
	Before October 11, 1995
	Policyowners' Equity			$		2,960	$	60,489	$	3,415	$	12,208	$	2,259
	Northwestern Mutual Equity					23		711		29		144		17
	Variable CompLife Policies Issued Between
	October 11, 1995 and December 31, 2008 (2)
	Policyowners' Equity					46,729		436,938		60,095		121,355		24,357
	Northwestern Mutual Equity					575		5,982		752		2,479		293
	Variable Executive Life Policies Issued Between
	March 2, 1998 and December 31, 2008 (3)
	Policyowners' Equity					1,983		9,274		2,203		8,906		942
	Variable Joint Life Policies Issued Between
	December 10, 1998 and December 31, 2008 (4)
	Policyowners' Equity					1,375		12,986		2,757		7,055		2,472
Total Net Assets
Total Net Assets					$	53,645	$	526,380	$	69,251	$	152,147	$	30,340
(1)	Investments, at cost
(1)	Investments, at cost			$		47,573	$	566,882	$	60,683	$	152,159	$	29,906
	Mutual Fund Shares Held					49,439		319,074		61,772		152,159		28,756
(2)	Accumulation Unit Value			$		1.454984	$	3.700743	$	1.056655	$	1.568812	$	1.084100
	Units Outstanding					32,512		119,687		57,585		78,935		22,738
(3)	Accumulation Unit Value			$		14.176293	$	5.804990	$	12.866468	$	43.345856	$	13.380170
	Units Outstanding					140		1,598		171		206		70
(4)	Accumulation Unit Value			$		14.176293	$	5.804990	$	12.866468	$	43.345856	$	13.380170
	Units Outstanding					97		2,237		214		163		185

(a)Amount is less than 1,000

The Accompanying Notes are an Integral Part of these Financial Statements. F-4

Statements of Assets and Liabilities

NORTHWESTERN MUTUAL VARIABLE LIFE ACCOUNT

December 31, 2019 (in thousands, except accumulation values)

							Long-Term U.S.			Inflation
					Select Bond		Government			Protection		High Yield	Multi-Sector
						Division	Bond Division			Division	Bond Division		Bond Division
Assets:
Assets:
	Investments, at fair value (1) Northwestern
	Mutual Series Fund, Inc Fidelity Variable			$		266,685	$	13,947	$	11,881	$	120,112	$	55,537
	Insurance Products Fund					-		-		-		-		-
	Neuberger Berman Advisers Management Trust					-		-		-		-		-
	Russell Investment Funds					-		-		-		-		-
	Credit Suisse Trust					-		-		-		-		-
	Due from Northwestern Mutual Life Insurance Company					-		3		-		-		2
	Total Assets
	Total Assets					266,685		13,950		11,881		120,112		55,539
Liabilities:
	t	oMrtLhwInessutrear cMeuCtuoal Life Insurance Company				84		-		-		7		-
	Due ttoN		n
	Due to Participants					-		-		-		-		-
	Total Liabilities					84		-		-		7		-
Total Net Assets				$		266,601	$	13,950	$	11,881	$	120,105	$	55,539
Net Assets:
Net Assets:
	Variable Life Policies Issued
	Before October 11, 1995
	Policyowners' Equity			$		21,369	$	1,013	$	504	$	8,463	$	3,340
	Northwestern Mutual Equity					229		10		5		79		26
	Variable CompLife Policies Issued Between
	October 11, 1995 and December 31, 2008 (2)
	Policyowners' Equity					212,160		12,523		9,338		102,358		48,400
	Northwestern Mutual Equity					3,112		160		123		1,312		600
	Variable Executive Life Policies Issued Between
	March 2, 1998 and December 31, 2008 (3)
	Policyowners' Equity					16,979		69		693		5,216		829
	Variable Joint Life Policies Issued Between
	December 10, 1998 and December 31, 2008 (4)
	Policyowners' Equity					12,752		175		1,218		2,677		2,344
Total Net Assets
Total Net Assets					$	266,601	$	13,950	$	11,881	$	120,105	$	55,539
(1)	Investments, at cost
(1)	Investments, at cost			$		261,243	$	13,440	$	11,557	$	115,118	$	52,762
	Mutual Fund Shares Held					205,776		12,464		10,524		160,792		48,716
(2)	Accumulation Unit Value			$		3.038977	$	1.603184	$	1.172363	$	4.407984	$	1.515308
	Units Outstanding					70,837		7,911		8,071		23,520		32,337
(3)	Accumulation Unit Value			$		245.997917	$	22.930587	$	15.648347	$	59.428074	$	21.138053
	Units Outstanding					69		3		44		88		39
(4)	Accumulation Unit Value			$		245.997917	$	22.930587	$	15.648347	$	59.428074	$	21.138053
	Units Outstanding					52		8		78		45		111

(a)Amount is less than 1,000

The Accompanying Notes are an Integral Part of these Financial Statements. F-5

Statements of Assets and Liabilities

NORTHWESTERN MUTUAL VARIABLE LIFE ACCOUNT

December 31, 2019 (in thousands, except accumulation values)

								Asset			Fidelity VIP			AMT
						Balanced		Allocation	Fidelity VIP Mid			Contrafund	Sustainable
						Division		Division	Cap Division			Division	Equity Division
Assets:
Assets:
	Investments, at fair value (1) Northwestern
	Mutual Series Fund, Inc Fidelity Variable			$		401,112	$	57,275	$	-	$	-	$	-
	Insurance Products Fund					-		-		180,940		52,727		-
	Neuberger Berman Advisers Management Trust					-		-		-		-		5,561
	Russell Investment Funds					-		-		-		-		-
	Credit Suisse Trust					-		-		-		-		-
	Due from Northwestern Mutual Life Insurance Company					-		3		10		3		-
	Total Assets
	Total Assets					401,112		57,278		180,950		52,730		5,561
Liabilities:
	t	oMrtLhwInessutrear cMeuCtuoal Life Insurance Company				559		-		-		-		-
	Due ttoN		n
	Due to Participants					-		-		-		-		-
	Total Liabilities					559		-		-		-		-
Total Net Assets				$		400,553	$	57,278	$	180,950	$	52,730	$	5,561
Net Assets:
Net Assets:
	Variable Life Policies Issued
	Before October 11, 1995
	Policyowners' Equity			$		180,114	$	7,849	$	14,569	$	4,359	$	372
	Northwestern Mutual Equity					1,279		70		111		36		3
	Variable CompLife Policies Issued Between
	October 11, 1995 and December 31, 2008 (2)
	Policyowners' Equity					198,886		45,425		154,814		44,867		4,082
	Northwestern Mutual Equity					2,950		615		2,187		543		61
	Variable Executive Life Policies Issued Between
	March 2, 1998 and December 31, 2008 (3)
	Policyowners' Equity					9,856		1,134		3,458		780		254
	Variable Joint Life Policies Issued Between
	December 10, 1998 and December 31, 2008 (4)
	Policyowners' Equity					7,468		2,185		5,811		2,145		789
Total Net Assets
Total Net Assets					$	400,553	$	57,278	$	180,950	$	52,730	$	5,561
(1)	Investments, at cost
(1)	Investments, at cost			$		379,843	$	54,748	$	174,566	$	48,207	$	4,964
	Mutual Fund Shares Held					269,927		47,062		5,699		1,461		207
(2)	Accumulation Unit Value			$		4.418751	$	2.660780	$	5.515184	$	2.438969	$	2.274699
	Units Outstanding					45,677		17,303		28,467		18,619		1,821
(3)	Accumulation Unit Value			$		246.784874	$	29.093477	$	59.676525	$	27.008170	$	25.016087
	Units Outstanding					40		39		58		29		10
(4)	Accumulation Unit Value			$		246.784874	$	29.093477	$	59.676525	$	27.008170	$	25.016087
	Units Outstanding					30		75		97		79		32

(a)Amount is less than 1,000

The Accompanying Notes are an Integral Part of these Financial Statements. F-6

Statements of Assets and Liabilities

NORTHWESTERN MUTUAL VARIABLE LIFE ACCOUNT

December 31, 2019 (in thousands, except accumulation values)

									International				Global Real
										Developed				Estate
					U.S. Strategic		U.S. Small Cap			Markets	Strategic Bond			Securities
					Equity Division		Equity Division			Division		Division		Division
Assets:
Assets:
	Investments, at fair value (1) Northwestern
	Mutual Series Fund, Inc Fidelity Variable			$		-	$	-	$	-	$	-	$	-
	Insurance Products Fund					-		-		-		-		-
	Neuberger Berman Advisers Management Trust					-		-		-		-		-
	Russell Investment Funds					237,876		104,696		131,391		88,248		186,727
	Credit Suisse Trust					-		-		-		-		-
	Due from Northwestern Mutual Life Insurance Company					4		-		-		1		17
	Total Assets
	Total Assets					237,880		104,696		131,391		88,249		186,744
Liabilities:
	t	oMrtLhwInessutrear cMeuCtuoal Life Insurance Company				-		4		-		-		-
	Due ttoN		n
	Due to Participants					-		-		-		-		-
	Total Liabilities					-		4		-		-		-
Total Net Assets				$		237,880	$	104,692	$	131,391	$	88,249	$	186,744
Net Assets:
Net Assets:
	Variable Life Policies Issued
	Before October 11, 1995
	Policyowners' Equity			$		9,233	$	5,730	$	7,181	$	5,662	$	9,903
	Northwestern Mutual Equity					70		44		74		75		83
	Variable CompLife Policies Issued Between
	October 11, 1995 and December 31, 2008 (2)
	Policyowners' Equity					205,662		91,482		112,008		65,193		162,634
	Northwestern Mutual Equity					2,851		1,368		1,598		1,006		2,417
	Variable Executive Life Policies Issued Between
	March 2, 1998 and December 31, 2008 (3)
	Policyowners' Equity					10,622		2,963		6,956		12,997		4,605
	Variable Joint Life Policies Issued Between
	December 10, 1998 and December 31, 2008 (4)
	Policyowners' Equity					9,442		3,105		3,574		3,316		7,102
Total Net Assets
Total Net Assets					$	237,880	$	104,692	$	131,391	$	88,249	$	186,744
(1)	Investments, at cost
(1)	Investments, at cost			$		228,341	$	97,292	$	124,994	$	87,887	$	170,056
	Mutual Fund Shares Held					14,839		7,321		11,211		8,357		12,125
(2)	Accumulation Unit Value			$		2.520964	$	3.197903	$	2.055606	$	2.469076	$	5.422414
	Units Outstanding					82,712		29,035		55,267		26,811		30,439
(3)	Accumulation Unit Value			$		28.741505	$	37.394611	$	22.896522	$	26.963899	$	59.135972
	Units Outstanding					370		79		304		482		78
(4)	Accumulation Unit Value			$		28.741505	$	37.394611	$	22.896522	$	26.963899	$	59.135972
	Units Outstanding					329		83		156		123		120

(a)Amount is less than 1,000

The Accompanying Notes are an Integral Part of these Financial Statements. F-7

Statements of Assets and Liabilities

NORTHWESTERN MUTUAL VARIABLE LIFE ACCOUNT

December 31, 2019 (in thousands, except accumulation values)

						LifePoints		LifePoints		LifePoints		LifePoints		Credit Suisse
						Moderate		Balanced		Growth	Equity Growth		Trust Commodity
						Strategy		Strategy		Strategy		Strategy	Return Strategy
						Division		Division		Division		Division		Division
Assets:
Assets:
	Investments, at fair value (1) Northwestern
	Mutual Series Fund, Inc Fidelity Variable			$		-	$	-	$	-	$	-	$	-
	Insurance Products Fund					-		-		-		-		-
	Neuberger Berman Advisers Management Trust					-		-		-		-		-
	Russell Investment Funds					7,501		23,488		23,332		12,289		-
	Credit Suisse Trust					-		-		-		-		21,390
	Due from Northwestern Mutual Life Insurance Company					-		1		5		-		1
	Total Assets
	Total Assets					7,501		23,489		23,337		12,289		21,391
Liabilities:
	t	oMrtLhwInessutrear cMeuCtuoal Life Insurance Company				2		-		-		3		-
	Due ttoN		n
	Due to Participants					-		-		-		-		-
	Total Liabilities					2		-		-		3		-
Total Net Assets				$		7,499	$	23,489	$	23,337	$	12,286	$	21,391
Net Assets:
Net Assets:
	Variable Life Policies Issued
	Before October 11, 1995
	Policyowners' Equity			$		2,020	$	5,780	$	5,262	$	1,690	$	629
	Northwestern Mutual Equity					14		45		39		14		8
	Variable CompLife Policies Issued Between
	October 11, 1995 and December 31, 2008 (2)
	Policyowners' Equity					5,362		16,688		17,340		9,442		17,987
	Northwestern Mutual Equity					74		266		317		152		272
	Variable Executive Life Policies Issued Between
	March 2, 1998 and December 31, 2008 (3)
	Policyowners' Equity					28		25		9		-		994
	Variable Joint Life Policies Issued Between
	December 10, 1998 and December 31, 2008 (4)
	Policyowners' Equity					1		685		370		988		1,501
Total Net Assets
Total Net Assets					$	7,499	$	23,489	$	23,337	$	12,286	$	21,391
(1)	Investments, at cost
(1)	Investments, at cost			$		7,398	$	23,360	$	23,554	$	11,961	$	24,688
	Mutual Fund Shares Held					746		2,402		2,400		1,336		5,828
(2)	Accumulation Unit Value			$		1.435781	$	1.547882	$	1.608669	$	1.675624	$	5.018507
	Units Outstanding					3,786		10,953		10,976		5,725		3,638
(3)	Accumulation Unit Value			$		17.716081	$	17.958473	$	17.402048	$	16.548015	$	4.729147
	Units Outstanding					2		1		1		-		210
(4)	Accumulation Unit Value			$		17.716081	$	17.958473	$	17.402048	$	16.548015	$	4.729147
	Units Outstanding					- (a)		38		21		60		317

(a)Amount is less than 1,000

The Accompanying Notes are an Integral Part of these Financial Statements. F-8

Statements of Operations

NORTHWESTERN MUTUAL VARIABLE LIFE ACCOUNT

For the Year Ended December 31, 2019 (in thousands)

				Focused
	Growth Stock		Appreciation		Large Cap Core			Large Cap		Index 500
		Division		Division	Stock Division		Blend Division		Stock Division
Income:
Income:
Dividend income	$	3,415	$	1,325	$	3,547	$	150	$	24,701
Expenses:
Mortality and expense risk charges		2,243		840		1,280		57		6,620
Taxes		22		7		16		-		101
Total expenses		2,265		847		1,296		57		6,721
Net investment income (loss)		1,150		478		2,251		93		17,980
Realized gain (loss) on investments:
Realized gain (loss) on sale of fund shares		15,398		11,258		6,277		193		44,030
Realized gain distribution		53,390		11,672		14,473		1,230		36,060
Realized gains (losses)		68,788		22,930		20,750		1,423		80,090
Change in unrealized appreciation/(depreciation)
of investments during the period		57,241		31,875		53,758		1,229		301,904
Net increase (decrease) in net assets
resulting from operations	$	127,179	$	55,283	$	76,759	$	2,745	$	399,974

	Large Company							Mid Cap
	Value Division			Domestic	Equity Income		Growth Stock			Index 400
			Equity Division			Division		Division	Stock Division
Income:
Income:
Dividend income	$	321	$	3,908	$	2,971	$	973	$	4,294
Expenses:
Mortality and expense risk charges		63		916		549		2,356		1,490
Taxes		1		9		5		36		9
Total expenses		64		925		554		2,392		1,499
Net investment income (loss)		257		2,983		2,417		(1,419)		2,795
Realized gain (loss) on investments:
Realized gain (loss) on sale of fund shares		(336)		5,538		7,297		5,186		4,432
Realized gain distribution		1,018		10,048		7,911		22,686		22,812
Realized gains (losses)		682		15,586		15,208		27,872		27,244
Change in unrealized appreciation/(depreciation)
of investments during the period		2,478		20,470		12,175		115,822		47,170
Net increase (decrease) in net assets
resulting from operations	$	3,417	$	39,039	$	29,800	$	142,275	$	77,209

				Small Cap					International
	Mid Cap Value		Growth Stock			Index 600		Small Cap		Growth
		Division		Division	Stock Division		Value Division			Division
Income:
Income:
Dividend income	$	1,169	$	297	$	116	$	924	$	1,384
Expenses:
Mortality and expense risk charges		310		1,311		197		846		462
Taxes		3		7		2		7		3
Total expenses		313		1,318		199		853		465
Net investment income (loss)		856		(1,021)		(83)		71		919
Realized gain (loss) on investments:
Realized gain (loss) on sale of fund shares		2,324		3,289		322		3,112		(343)
Realized gain distribution		6,485		43,764		3,175		30,124		358
Realized gains (losses)		8,809		47,053		3,497		33,236		15
Change in unrealized appreciation/(depreciation)
of investments during the period		8,080		42,501		5,532		9,853		31,121
Net increase (decrease) in net assets
resulting from operations	$	17,745	$	88,533	$	8,946	$	43,160	$	32,055

The Accompanying Notes are an Integral Part of these Financial Statements. F-9

Statements of Operations

NORTHWESTERN MUTUAL VARIABLE LIFE ACCOUNT

For the Year Ended December 31, 2019 (in thousands)

		Research						Emerging		Government
	International			International		Markets Equity			Money Market					Short-Term
	Core Division		Equity Division					Division			Division	Bond Division
Income:
Income:
Dividend income	$	738	$		12,707	$		722	$		2,935	$		596
Expenses:
Mortality and expense risk charges		182			2,213			270			616			113
Taxes		1			29			2			6			1
Total expenses
Total expenses		183			2,242			272			622			114
Net investment income (loss)		555			10,465			450			2,313			482
Realized gain (loss) on investments:
Realized gain (loss) on sale of fund shares		792			3,066			271			-			92
Realized gain distribution		1,184			23,234			-			2			-
Realized gains (losses)
Realized gains (losses)		1,976			26,300			271			2			92
Change in unrealized appreciation/(depreciation)
of investments during the period		8,018			21,318			10,881			-			519

Net increase (decrease) in net assets
resulting from operations	$	10,549		$	58,083		$	11,602		$	2,315		$	1,093

			Long-Term U.S.					Inflation
	Select Bond			Government				Protection			High Yield		Multi-Sector
		Division	Bond Division					Division	Bond Division			Bond Division
Income:
Income:
Dividend income	$	7,199	$		272	$		299	$		6,374	$		2,311
Expenses:
Mortality and expense risk charges		1,043			54			43			489			209
Taxes		11			-			-			4			1
Total expenses		1,054			54			43			493			210
Net investment income (loss)		6,145			218			256			5,881			2,101
Realized gain (loss) on investments:
Realized gain (loss) on sale of fund shares		713			(253)			22			1,318			139
Realized gain distribution		-			-			-			-			-
Realized gains (losses)		713			(253)			22			1,318			139
Change in unrealized appreciation/(depreciation)
of investments during the period		13,342			1,352			640			8,209			3,774
Net increase (decrease) in net assets
resulting from operations	$	20,200	$		1,317	$		918	$		15,408	$		6,014

					Asset						Fidelity VIP			AMT
		Balanced			Allocation	Fidelity VIP Mid					Contrafund		Sustainable
		Division			Division		Cap Division				Division	Equity Division
Income:
Income:
Dividend income	$	8,794	$		1,217	$		1,180	$		106	$		22
Expenses:
Mortality and expense risk charges		1,718			232			752			207			20
Taxes		87			4			7			2			-
Total expenses		1,805			236			759			209			20
Net investment income (loss)		6,989			981			421			(103)			2
Realized gain (loss) on investments:
Realized gain (loss) on sale of fund shares		(795)			779			1,044			599			227
Realized gain distribution		19,651			3,392			19,601			5,490			291
Realized gains (losses)		18,856			4,171			20,645			6,089			518
Change in unrealized appreciation/(depreciation)
of investments during the period		34,018			4,749			13,976			6,705			698
Net increase (decrease) in net assets
resulting from operations	$	59,863	$		9,901	$		35,042	$		12,691	$		1,218

The Accompanying Notes are an Integral Part of these Financial Statements.

F-10

Statements of Operations

NORTHWESTERN MUTUAL VARIABLE LIFE ACCOUNT

For the Year Ended December 31, 2019 (in thousands)

						International
	U.S. Strategic		U.S. Small Cap			Developed	Strategic Bond
	Equity Division		Equity Division		Markets Division			Division
Income:
Income:
Dividend income	$	2,399	$	571	$	3,280	$	2,371
Expenses:
Mortality and expense risk charges		921		428		517		317
Taxes		5		3		3		3
Total expenses
Total expenses		926		431		520		320
Net investment income (loss)		1,473		140		2,760		2,051
Realized gain (loss) on investments:
Realized gain (loss) on sale of fund shares		(165)		45		(1,971)		(242)
Realized gain distribution		12,307		1,561		-		1,136
Realized gains (losses)
Realized gains (losses)		12,142		1,606		(1,971)		894
Change in unrealized appreciation/(depreciation)
of investments during the period		43,177		18,423		21,073		4,196

Net increase (decrease) in net assets
resulting from operations	$	56,792	$	20,169	$	21,862	$	7,141

	Global Real			LifePoints				LifePoints
		Estate		Moderate		LifePoints		Growth
		Securities		Strategy		Balanced		Strategy
		Division		Division	Strategy Division			Division
Income:
Income:
Dividend income	$	9,180	$	92	$	345	$	157
Expenses:
Mortality and expense risk charges		765		35		96		101
Taxes		5		1		3		3
Total expenses		770		36		99		104
Net investment income (loss)		8,410		56		246		53

Realized gain (loss) on investments:

Realized gain (loss) on sale of fund shares Realized gain distribution

Realized gains (losses)

Change in unrealized appreciation/(depreciation) of investments during the period

Net increase (decrease) in net assets resulting from operations

	(2,162)		(72)		(517)		(213)
	-		176		381		1,198
	(2,162)		104		(136)		985
	27,356		671		3,026		2,553
$	33,604	$	831	$	3,136	$	3,591

	LifePoints	Credit Suisse
Equity Growth			Trust
	Strategy		Commodity
	Division	Return Strategy

Income:
Dividend income	$	27	$	185
Expenses:
Mortality and expense risk charges		50		84
Taxes		1		-
Total expenses		51		84
Net investment income (loss)		(24)		101
Realized gain (loss) on investments:
Realized gain (loss) on sale of fund shares		(107)		(1,972)
Realized gain distribution		740		-
Realized gains (losses)		633		(1,972)
Change in unrealized appreciation/(depreciation)
of investments during the period		1,536		3,120
Net increase (decrease) in net assets
resulting from operations	$	2,145	$	1,249

The Accompanying Notes are an Integral Part of these Financial Statements. F-11

Statements of Changes in Net Assets

NORTHWESTERN MUTUAL VARIABLE LIFE ACCOUNT

(in thousands)

Growth Stock Division

Year Ended	Year Ended
December 31,	December 31,
2019	2018

Focused Appreciation Division

Year Ended	Year Ended
December 31,	December 31,
2019	2018

Operations:
Net investment income (loss)	$	1,150	$	1,241	$		478	$	142
Net realized gains (losses)		68,788		64,092			22,930		9,816
Net change in unrealized appreciation/(depreciation)		57,241		(60,587)			31,875		(14,420)
Net increase (decrease) in net assets resulting from operations
		127,179		4,746			55,283		(4,462)
Policy Transactions:
Policy owners' net payments		11,540		13,937			3,393		4,583
Policy loans, surrenders and death benefits		(27,361)		(21,009)			(16,912)		(11,287)
Mortality and other (net)		(9,217)		(8,792)			(3,589)		(3,579)
Transfers from other divisions or sponsor		58,461		58,975			21,881		25,055
Transfers to other divisions or sponsor		(59,770)		(58,640)			(21,590)		(20,918)

Net increase (decrease) in net assets resulting from contract
transactions		(26,347)		(15,529)			(16,817)		(6,146)
Net increase (decrease) in net assets		100,832		(10,783)			38,466		(10,608)
Net Assets:
Beginning of period		444,435		455,218			181,353		191,961
End of period
End of period	$	545,267	$	444,435		$	219,819	$	181,353

Units issued during the period		5,338		5,954			3,122		3,511
Units redeemed during the period		(9,074)		(8,021)			(5,341)		(4,514)
Net units issued (redeemed) during period		(3,736)		(2,067)			(2,219)		(1,003)

Large Cap Core Stock Division

Year Ended	Year Ended
December 31,	December 31,
2019	2018

Large Cap Blend Division

Year Ended	Year Ended
December 31,	December 31,
2019	2018

Operations:
Net investment income (loss)	$	2,251	$	3,020	$	93	$	43
Net realized gains (losses)		20,750		90,228		1,423		853
Net change in unrealized appreciation/(depreciation)		53,758		(110,692)		1,229		(1,427)
Net increase (decrease) in net assets resulting from operations		76,759		(17,444)		2,745		(531)
Policy Transactions:
Policy owners' net payments		7,127		10,089		287		341
Policy loans, surrenders and death benefits		(14,187)		(13,157)		(835)		(151)
Mortality and other (net)		(5,820)		(5,567)		(219)		(206)
Transfers from other divisions or sponsor		19,351		22,385		1,861		2,148
Transfers to other divisions or sponsor		(19,607)		(23,397)		(2,359)		(2,294)
Net increase (decrease) in net assets resulting from contract
transactions		(13,136)		(9,647)		(1,265)		(162)
Net increase (decrease) in net assets		63,623		(27,091)		1,480		(693)
Net Assets:
Beginning of period		255,743		282,834		11,780		12,473
End of period	$	319,366	$	255,743	$	13,260	$	11,780

Units issued during the period		4,473		4,860		829		739
Units redeemed during the period		(7,077)		(6,968)		(1,232)		(919)
Net units issued (redeemed) during period		(2,604)		(2,108)		(403)		(180)

The Accompanying Notes are an Integral Part of these Financial Statements. F-12

Statements of Changes in Net Assets

NORTHWESTERN MUTUAL VARIABLE LIFE ACCOUNT

(in thousands)

		Index 500 Stock Division				Large Company Value Division
		Year Ended		Year Ended			Year Ended		Year Ended
	December 31,		December 31,			December 31,		December 31,
		2019		2018			2019		2018
Operations:
Operations:
Net investment income (loss)	$	17,980	$	16,883	$		257	$	179
Net realized gains (losses)		80,090		57,193			682		952
Net change in unrealized appreciation/(depreciation)		301,904		(142,220)			2,478		(2,319)
Net increase (decrease) in net assets resulting from operations
		399,974		(68,144)			3,417		(1,188)
Policy Transactions:
Policy owners' net payments		37,946		41,240			435		350
Policy loans, surrenders and death benefits		(62,749)		(65,216)			(1,441)		(637)
Mortality and other (net)		(27,106)		(26,188)			(245)		(224)
Transfers from other divisions or sponsor		145,726		151,145			2,222		3,036
Transfers to other divisions or sponsor		(143,381)		(152,092)			(1,708)		(1,901)
Net increase (decrease) in net assets resulting from contract
transactions		(49,564)		(51,111)			(737)		624
Net increase (decrease) in net assets		350,410		(119,255)			2,680		(564)
Net Assets:
Beginning of period		1,326,361		1,445,616			12,933		13,497
End of period	$	1,676,771	$	1,326,361	$		15,613	$	12,933
Units issued during the period
Units issued during the period		14,677		14,561			1,278		1,364
Units redeemed during the period		(20,017)		(19,653)			(1,457)		(1,279)
Net units issued (redeemed) during period		(5,340)		(5,092)			(179)		85

Domestic Equity Division

Year Ended	Year Ended
December 31,	December 31,
2019	2018

Equity Income Division

Year Ended	Year Ended
December 31,	December 31,
2019	2018

Operations:
Net investment income (loss)	$	2,983	$	2,801	$	2,417	$	2,077
Net realized gains (losses)		15,586		13,396		15,208		14,455
Net change in unrealized appreciation/(depreciation)		20,470		(22,403)		12,175		(29,347)
Net increase (decrease) in net assets resulting from operations
		39,039		(6,206)		29,800		(12,815)
Policy Transactions:
Policy owners' net payments		4,418		6,415		3,570		4,203
Policy loans, surrenders and death benefits		(9,311)		(12,413)		(7,901)		(5,313)
Mortality and other (net)		(3,818)		(3,960)		(2,338)		(2,335)
Transfers from other divisions or sponsor		18,551		21,717		31,352		34,468
Transfers to other divisions or sponsor		(22,786)		(25,575)		(36,423)		(34,845)
Net increase (decrease) in net assets resulting from contract
transactions		(12,946)		(13,816)		(11,740)		(3,822)
Net increase (decrease) in net assets		26,093		(20,022)		18,060		(16,637)
Net Assets:
Beginning of period		197,690		217,712		119,195		135,832
End of period	$	223,783	$	197,690	$	137,255	$	119,195

Units issued during the period		4,935		5,157		3,620		4,265
Units redeemed during the period		(8,454)		(8,605)		(6,675)		(5,114)
Net units issued (redeemed) during period		(3,519)		(3,448)		(3,055)		(849)

The Accompanying Notes are an Integral Part of these Financial Statements. F-13

Statements of Changes in Net Assets

NORTHWESTERN MUTUAL VARIABLE LIFE ACCOUNT

(in thousands)

	Mid Cap Growth Stock Division						Index 400 Stock Division
		Year Ended		Year Ended			Year Ended		Year Ended
	December 31,		December 31,			December 31,		December 31,
		2019		2018			2019		2018
Operations:
Operations:
Net investment income (loss)	$	(1,419)	$	(1,651)	$		2,795	$	2,392
Net realized gains (losses)		27,872		94,191			27,244		27,995
Net change in unrealized appreciation/(depreciation)		115,822		(129,136)			47,170		(71,107)
Net increase (decrease) in net assets resulting from operations
		142,275		(36,596)			77,209		(40,720)
Policy Transactions:
Policy owners' net payments		13,475		17,537			6,905		9,209
Policy loans, surrenders and death benefits		(25,940)		(24,391)			(15,265)		(15,038)
Mortality and other (net)		(10,183)		(9,604)			(5,812)		(5,839)
Transfers from other divisions or sponsor		26,266		29,379			62,922		76,431
Transfers to other divisions or sponsor		(28,656)		(32,361)			(62,690)		(73,087)
Net increase (decrease) in net assets resulting from contract
transactions		(25,038)		(19,440)			(13,940)		(8,324)
Net increase (decrease) in net assets		117,237		(56,036)			63,269		(49,044)
Net Assets:
Beginning of period		445,659		501,695			309,099		358,143
End of period	$	562,896	$	445,659	$		372,368	$	309,099

Units issued during the period

Units redeemed during the period

Net units issued (redeemed) during period

5,9776,492

(10,036)(9,716)

(4,059)(3,224)

Mid Cap Value Division

Year Ended	Year Ended
December 31,	December 31,
2019	2018

5,643	6,152
(7,838)	(7,499)
(2,195)	(1,347)

Small Cap Growth Stock

Division

Year Ended	Year Ended
December 31,	December 31,
2019	2018

Operations:
Net investment income (loss)	$	856	$	857	$	(1,021)	$	(1,370)
Net realized gains (losses)		8,809		10,500		47,053		29,559
Net change in unrealized appreciation/(depreciation)		8,080		(21,062)		42,501		(62,947)
Net increase (decrease) in net assets resulting from operations
		17,745		(9,705)		88,533		(34,758)
Policy Transactions:
Policy owners' net payments		1,259		2,287		7,398		9,056
Policy loans, surrenders and death benefits		(2,736)		(3,069)		(15,014)		(14,175)
Mortality and other (net)		(1,313)		(1,343)		(5,247)		(5,314)
Transfers from other divisions or sponsor		8,489		8,528		34,236		40,892
Transfers to other divisions or sponsor		(10,565)		(11,576)		(36,980)		(43,375)
Net increase (decrease) in net assets resulting from contract
transactions		(4,866)		(5,173)		(15,607)		(12,916)
Net increase (decrease) in net assets		12,879		(14,878)		72,926		(47,674)
Net Assets:
Beginning of period		63,562		78,440		257,677		305,351
End of period	$	76,441	$	63,562	$	330,603	$	257,677

Units issued during the period		1,478		1,450		4,203		4,736
Units redeemed during the period		(2,408)		(2,544)		(6,932)		(6,887)
Net units issued (redeemed) during period		(930)		(1,094)		(2,729)		(2,151)

The Accompanying Notes are an Integral Part of these Financial Statements. F-14

Statements of Changes in Net Assets

NORTHWESTERN MUTUAL VARIABLE LIFE ACCOUNT

(in thousands)

		Index 600 Stock Division					Small Cap Value Division
		Year Ended		Year Ended			Year Ended		Year Ended
	December 31,		December 31,			December 31,		December 31,
		2019		2018			2019		2018
Operations:
Operations:
Net investment income (loss)	$	(83)	$	431	$		71	$	168
Net realized gains (losses)		3,497		2,295			33,236		20,371
Net change in unrealized appreciation/(depreciation)		5,532		(7,277)			9,853		(46,873)
Net increase (decrease) in net assets resulting from operations
		8,946		(4,551)			43,160		(26,334)
Policy Transactions:
Policy owners' net payments		1,307		1,116			4,722		6,343
Policy loans, surrenders and death benefits		(1,966)		(1,412)			(8,681)		(8,910)
Mortality and other (net)		(637)		(738)			(3,398)		(3,530)
Transfers from other divisions or sponsor		16,252		21,687			9,403		10,025
Transfers to other divisions or sponsor		(13,897)		(14,489)			(15,528)		(14,096)
Net increase (decrease) in net assets resulting from contract
transactions		1,059		6,164			(13,482)		(10,168)
Net increase (decrease) in net assets		10,005		1,613			29,678		(36,502)
Net Assets:
Beginning of period		40,272		38,659			175,135		211,637
End of period	$	50,277	$	40,272	$		204,813	$	175,135

Units issued during the period

Units redeemed during the period

Net units issued (redeemed) during period

4,122	5,520
(3,596)	(3,139)
526	2,381

International Growth Division
Year Ended	Year Ended
December 31,	December 31,
2019	2018

3,092	3,084
(5,462)	(5,013)
(2,370)	(1,929)

Research International Core

Division

Year Ended	Year Ended
December 31,	December 31,
2019	2018

Operations:
Net investment income (loss)	$	919	$	1,048	$	555	$	494
Net realized gains (losses)		15		(434)		1,976		873
Net change in unrealized appreciation/(depreciation)		31,121		(13,290)		8,018		(7,190)
Net increase (decrease) in net assets resulting from operations
		32,055		(12,676)		10,549		(5,823)
Policy Transactions:
Policy owners' net payments		3,873		4,950		(2,321)		86
Policy loans, surrenders and death benefits		(7,410)		(5,145)		(1,827)		(1,390)
Mortality and other (net)		(1,848)		(1,970)		(596)		(667)
Transfers from other divisions or sponsor		18,214		20,586		25,897		18,677
Transfers to other divisions or sponsor		(17,262)		(20,386)		(14,083)		(13,904)
Net increase (decrease) in net assets resulting from contract
transactions		(4,433)		(1,965)		7,070		2,802
Net increase (decrease) in net assets		27,622		(14,641)		17,619		(3,021)
Net Assets:
Beginning of period		95,359		110,000		36,026		39,047
End of period	$	122,981	$	95,359	$	53,645	$	36,026

Units issued during the period		5,287		6,323		12,847		7,190
Units redeemed during the period		(6,957)		(6,934)		(7,416)		(5,422)
Net units issued (redeemed) during period		(1,670)		(611)		5,431		1,768

The Accompanying Notes are an Integral Part of these Financial Statements. F-15

Statements of Changes in Net Assets

NORTHWESTERN MUTUAL VARIABLE LIFE ACCOUNT

(in thousands)

International Equity Division

Year Ended	Year Ended
December 31,	December 31,
2019	2018

Emerging Markets Equity

Division

Year Ended	Year Ended
December 31,	December 31,
2019	2018

Operations:
Net investment income (loss)	$	10,465	$	11,683	$	450	$	537
Net realized gains (losses)		26,300		10,324		271		332
Net change in unrealized appreciation/(depreciation)		21,318		(114,245)		10,881		(10,179)
Net increase (decrease) in net assets resulting from operations
		58,083		(92,238)		11,602		(9,310)
Policy Transactions:
Policy owners' net payments		21,599		23,063		2,138		1,930
Policy loans, surrenders and death benefits		(24,330)		(28,576)		(3,210)		(2,694)
Mortality and other (net)		(8,800)		(10,349)		(1,025)		(1,003)
Transfers from other divisions or sponsor		42,006		50,395		14,790		18,352
Transfers to other divisions or sponsor		(52,138)		(50,468)		(11,868)		(13,322)
Net increase (decrease) in net assets resulting from contract
transactions		(21,663)		(15,935)		825		3,263
Net increase (decrease) in net assets		36,420		(108,173)		12,427		(6,047)
Net Assets:
Beginning of period		489,960		598,133		56,824		62,871
End of period	$	526,380	$	489,960	$	69,251	$	56,824

Units issued during the period

Units redeemed during the period

Net units issued (redeemed) during period

18,002	17,874
(23,449)	(21,014)
(5,447)	(3,140)

Government Money Market

Division

Year Ended	Year Ended
December 31,	December 31,
2019	2018

11,676	14,904
(10,565)	(11,451)
1,111	3,453

Short-Term Bond Division
Year Ended	Year Ended
December 31,	December 31,
2019	2018

Operations:	$	2,313	$	1,684		$	482	$	283
Net investment income (loss)	$	2,313	$	1,684		$	482	$	283
Net realized gains (losses)		2		-			92		(5)
Net change in unrealized appreciation/(depreciation)		-		-			519		(32)
Net increase (decrease) in net assets resulting from operations
		2,315		1,684			1,093		246
Policy Transactions:
Policy owners' net payments		43,281		46,736			1,105		361
Policy loans, surrenders and death benefits		(23,121)		(24,887)			(5,089)		(1,997)
Mortality and other (net)		(4,312)		(4,202)			(533)		(402)
Transfers from other divisions or sponsor		107,285		168,804			16,817		15,225
Transfers to other divisions or sponsor		(127,831)		(181,455)			(7,946)		(11,029)
Net increase (decrease) in net assets resulting from contract
transactions		(4,698)		4,996			4,354		2,158
Net increase (decrease) in net assets		(2,383)		6,680			5,447		2,404
Net Assets:
Beginning of period		154,530		147,850			24,893		22,489
End of period	$	152,147	$	154,530	$		30,340	$	24,893

Units issued during the period		62,690		71,691			13,859		7,297
Units redeemed during the period		(62,028)		(70,154)			(7,508)		(6,867)
Net units issued (redeemed) during period		662		1,537			6,351		430

The Accompanying Notes are an Integral Part of these Financial Statements. F-16

Statements of Changes in Net Assets

NORTHWESTERN MUTUAL VARIABLE LIFE ACCOUNT

(in thousands)

Select Bond Division

Year Ended	Year Ended
December 31,	December 31,
2019	2018

Long-Term U.S. Government

Bond Division

Year Ended	Year Ended
December 31,	December 31,
2019	2018

Operations:
Net investment income (loss)	$	6,145	$	4,467	$	218	$	143
Net realized gains (losses)		713		(500)		(253)		21
Net change in unrealized appreciation/(depreciation)		13,342		(5,612)		1,352		(344)
Net increase (decrease) in net assets resulting from operations
		20,200		(1,645)		1,317		(180)
Policy Transactions:
Policy owners' net payments		7,815		9,372		332		515
Policy loans, surrenders and death benefits		(12,079)		(14,848)		(79)		(253)
Mortality and other (net)		(4,736)		(4,331)		(226)		(179)
Transfers from other divisions or sponsor		101,553		116,263		4,716		2,807
Transfers to other divisions or sponsor		(89,163)		(113,554)		(2,777)		(1,923)
Net increase (decrease) in net assets resulting from contract
transactions		3,390		(7,098)		1,966		967
Net increase (decrease) in net assets		23,590		(8,743)		3,283		787
Net Assets:
Beginning of period		243,011		251,754		10,667		9,880
End of period	$	266,601	$	243,011	$	13,950	$	10,667
Units issued during the period
Units issued during the period		10,910		9,360		3,091		2,371
Units redeemed during the period		(10,401)		(9,851)		(2,134)		(1,691)
Net units issued (redeemed) during period		509		(491)		957		680

Inflation Protection Division

Year Ended	Year Ended
December 31,	December 31,
2019	2018

High Yield Bond Division

Year Ended	Year Ended
December 31,	December 31,
2019	2018

Operations:	$	256	$	183		$	5,881	$	5,624
Net investment income (loss)	$	256	$	183		$	5,881	$	5,624
Net realized gains (losses)		22		(54)			1,318		1,386
Net change in unrealized appreciation/(depreciation)		640		(456)			8,209		(10,507)
Net increase (decrease) in net assets resulting from operations
		918		(327)			15,408		(3,497)
Policy Transactions:
Policy owners' net payments		309		415			3,340		3,957
Policy loans, surrenders and death benefits		(455)		(551)			(5,362)		(5,367)
Mortality and other (net)		(185)		(177)			(2,153)		(2,165)
Transfers from other divisions or sponsor		7,624		6,764			24,561		24,915
Transfers to other divisions or sponsor		(7,141)		(5,806)			(23,077)		(26,822)
Net increase (decrease) in net assets resulting from contract
transactions		152		645			(2,691)		(5,482)
Net increase (decrease) in net assets		1,070		318			12,717		(8,979)
Net Assets:
Beginning of period		10,811		10,493			107,388		116,367
End of period	$	11,881	$	10,811	$		120,105	$	107,388

Units issued during the period		2,407		2,426			2,768		2,659
Units redeemed during the period		(2,356)		(2,082)			(3,328)		(3,784)
Net units issued (redeemed) during period		51		344			(560)		(1,125)

The Accompanying Notes are an Integral Part of these Financial Statements. F-17

Statements of Changes in Net Assets

NORTHWESTERN MUTUAL VARIABLE LIFE ACCOUNT

(in thousands)

		Multi-Sector Bond Division					Balanced Division
		Year Ended		Year Ended			Year Ended		Year Ended
	December 31,		December 31,			December 31,		December 31,
		2019		2018			2019		2018
Operations:
Operations:
Net investment income (loss)	$	2,101	$	1,130	$		6,989	$	6,980
Net realized gains (losses)		139		(322)			18,856		7,148
Net change in unrealized appreciation/(depreciation)		3,774		(1,526)			34,018		(28,103)
Net increase (decrease) in net assets resulting from operations
		6,014		(718)			59,863		(13,975)
Policy Transactions:
Policy owners' net payments		852		1,268			11,730		14,159
Policy loans, surrenders and death benefits		(2,029)		(1,995)			(16,713)		(21,756)
Mortality and other (net)		(862)		(758)			(8,815)		(8,811)
Transfers from other divisions or sponsor		14,514		9,930			69,764		78,836
Transfers to other divisions or sponsor		(4,827)		(6,231)			(62,625)		(76,177)
Net increase (decrease) in net assets resulting from contract
transactions		7,648		2,214			(6,659)		(13,749)
Net increase (decrease) in net assets		13,662		1,496			53,204		(27,724)
Net Assets:
Beginning of period		41,877		40,381			347,349		375,073
End of period	$	55,539	$	41,877	$		400,553	$	347,349
Units issued during the period
Units issued during the period		9,173		6,891			6,043		4,614
Units redeemed during the period		(4,551)		(5,784)			(6,224)		(5,946)
Net units issued (redeemed) during period		4,622		1,107			(181)		(1,332)

Asset Allocation Division

Year Ended	Year Ended
December 31,	December 31,
2019	2018

Fidelity VIP Mid Cap Division

Year Ended	Year Ended
December 31,	December 31,
2019	2018

Operations:
Net investment income (loss)	$	981	$	822	$	421	$	(67)
Net realized gains (losses)		4,171		2,557		20,645		18,502
Net change in unrealized appreciation/(depreciation)		4,749		(6,009)		13,976		(46,600)
Net increase (decrease) in net assets resulting from operations
		9,901		(2,630)		35,042		(28,165)
Policy Transactions:
Policy owners' net payments		1,825		1,681		4,882		6,023
Policy loans, surrenders and death benefits		(2,509)		(3,546)		(8,534)		(8,185)
Mortality and other (net)		(1,158)		(1,139)		(3,061)		(3,349)
Transfers from other divisions or sponsor		3,601		3,121		13,225		16,837
Transfers to other divisions or sponsor		(2,723)		(2,746)		(19,640)		(19,693)
Net increase (decrease) in net assets resulting from contract
transactions		(964)		(2,629)		(13,128)		(8,367)
Net increase (decrease) in net assets		8,937		(5,259)		21,914		(36,532)
Net Assets:
Beginning of period		48,341		53,600		159,036		195,568
End of period	$	57,278	$	48,341	$	180,950	$	159,036

Units issued during the period		2,048		1,830		2,385		2,663
Units redeemed during the period		(2,216)		(2,431)		(4,493)		(3,823)
Net units issued (redeemed) during period		(168)		(601)		(2,108)		(1,160)

The Accompanying Notes are an Integral Part of these Financial Statements. F-18

Statements of Changes in Net Assets

NORTHWESTERN MUTUAL VARIABLE LIFE ACCOUNT

(in thousands)

	Fidelity VIP Contrafund Division				AMT Sustainable Equity Division
		Year Ended		Year Ended		Year Ended		Year Ended
	December 31,		December 31,		December 31,		December 31,
		2019		2018		2019		2018
Operations:
Operations:
Net investment income (loss)	$	(103)	$	4	$	2	$	8
Net realized gains (losses)		6,089		4,972		518		490
Net change in unrealized appreciation/(depreciation)		6,705		(8,106)		698		(858)
Net increase (decrease) in net assets resulting from operations
		12,691		(3,130)		1,218		(360)
Policy Transactions:
Policy owners' net payments		1,010		1,371		114		197
Policy loans, surrenders and death benefits		(1,658)		(1,572)		(217)		(159)
Mortality and other (net)		(820)		(779)		(86)		(88)
Transfers from other divisions or sponsor		7,162		7,341		1,732		2,036
Transfers to other divisions or sponsor		(7,573)		(6,171)		(2,273)		(1,840)
Net increase (decrease) in net assets resulting from contract
transactions		(1,879)		190		(730)		146
Net increase (decrease) in net assets		10,812		(2,940)		488		(214)
Net Assets:
Beginning of period		41,918		44,858		5,073		5,287
End of period	$	52,730	$	41,918	$	5,561	$	5,073
Units issued during the period
Units issued during the period		2,684		3,067		352		490
Units redeemed during the period		(3,606)		(3,030)		(623)		(448)
Net units issued (redeemed) during period		(922)		37		(271)		42

U.S. Strategic Equity Division

Year Ended	Year Ended
December 31,	December 31,
2019	2018

U.S. Small Cap Equity Division

Year Ended	Year Ended
December 31,	December 31,
2019	2018

Operations:
Net investment income (loss)	$	1,473	$	1,655	$		140	$	40
Net realized gains (losses)		12,142		45,898			1,606		18,450
Net change in unrealized appreciation/(depreciation)		43,177		(69,035)			18,423		(31,125)
Net increase (decrease) in net assets resulting from operations
		56,792		(21,482)			20,169		(12,635)
Policy Transactions:
Policy owners' net payments		3,691		6,575			2,689		3,467
Policy loans, surrenders and death benefits		(10,473)		(10,381)			(5,836)		(5,554)
Mortality and other (net)		(3,937)		(3,961)			(1,796)		(2,013)
Transfers from other divisions or sponsor		9,095		12,877			8,664		11,935
Transfers to other divisions or sponsor		(13,118)		(18,307)			(10,518)		(14,339)
Net increase (decrease) in net assets resulting from contract
transactions		(14,742)		(13,197)			(6,797)		(6,504)
Net increase (decrease) in net assets		42,050		(34,679)			13,372		(19,139)
Net Assets:
Beginning of period		195,830		230,509			91,320		110,459
End of period	$	237,880	$	195,830		$	104,692	$	91,320

Units issued during the period		4,992		5,660			2,388		2,777
Units redeemed during the period		(10,133)		(9,925)			(4,199)		(4,468)
Net units issued (redeemed) during period		(5,141)		(4,265)			(1,811)		(1,691)

The Accompanying Notes are an Integral Part of these Financial Statements. F-19

Statements of Changes in Net Assets

NORTHWESTERN MUTUAL VARIABLE LIFE ACCOUNT

(in thousands)

International Developed Markets

Division

Year Ended	Year Ended
December 31,	December 31,
2019	2018

Strategic Bond Division

Year Ended	Year Ended
December 31,	December 31,
2019	2018

Operations:
Net investment income (loss)	$	2,760	$	1,725	$	2,051	$	1,430
Net realized gains (losses)		(1,971)		10,177		894		(392)
Net change in unrealized appreciation/(depreciation)		21,073		(32,739)		4,196		(2,093)
Net increase (decrease) in net assets resulting from operations
		21,862		(20,837)		7,141		(1,055)
Policy Transactions:
Policy owners' net payments		4,029		5,326		2,831		2,957
Policy loans, surrenders and death benefits		(7,912)		(7,412)		(5,318)		(5,622)
Mortality and other (net)		(2,271)		(2,403)		(1,655)		(1,602)
Transfers from other divisions or sponsor		19,212		19,698		57,505		32,671
Transfers to other divisions or sponsor		(19,606)		(19,767)		(53,867)		(31,917)
Net increase (decrease) in net assets resulting from contract
transactions		(6,548)		(4,558)		(504)		(3,513)
Net increase (decrease) in net assets		15,314		(25,395)		6,637		(4,568)
Net Assets:
Beginning of period		116,077		141,472		81,612		86,180
End of period	$	131,391	$	116,077	$	88,249	$	81,612

Units issued during the period

Units redeemed during the period

Net units issued (redeemed) during period

6,299	6,537
(8,981)	(7,759)
(2,682)	(1,222)

Global Real Estate Securities

Division

Year Ended	Year Ended
December 31,	December 31,
2019	2018

5,8984,833

(6,629)(5,716)

(731)(883)

LifePoints Moderate Strategy

Division

Year Ended	Year Ended
December 31,	December 31,
2019	2018

Operations:	$	8,410	$	6,972		$	56	$	279
Net investment income (loss)	$	8,410	$	6,972		$	56	$	279
Net realized gains (losses)		(2,162)		(4,643)			104		159
Net change in unrealized appreciation/(depreciation)		27,356		(12,985)			671		(778)
Net increase (decrease) in net assets resulting from operations
		33,604		(10,656)			831		(340)
Policy Transactions:
Policy owners' net payments		5,368		7,050			353		(313)
Policy loans, surrenders and death benefits		(10,384)		(8,018)			(298)		(393)
Mortality and other (net)		(3,234)		(3,170)			(189)		(157)
Transfers from other divisions or sponsor		23,645		21,601			1,039		2,196
Transfers to other divisions or sponsor		(23,405)		(24,752)			(951)		(1,239)
Net increase (decrease) in net assets resulting from contract
transactions		(8,010)		(7,289)			(46)		94
Net increase (decrease) in net assets		25,594		(17,945)			785		(246)
Net Assets:
Beginning of period		161,150		179,095			6,714		6,960
End of period	$	186,744	$	161,150	$		7,499	$	6,714

Units issued during the period		3,334		3,343			967		1,702
Units redeemed during the period		(4,707)		(4,677)			(959)		(2,321)
Net units issued (redeemed) during period		(1,373)		(1,334)			8		(619)

The Accompanying Notes are an Integral Part of these Financial Statements. F-20

Statements of Changes in Net Assets

NORTHWESTERN MUTUAL VARIABLE LIFE ACCOUNT

(in thousands)

LifePoints Balanced Strategy

Division

Year Ended	Year Ended
December 31,	December 31,
2019	2018

LifePoints Growth Strategy

Division

Year Ended	Year Ended
December 31,	December 31,
2019	2018

Operations:
Net investment income (loss)	$	246	$	1,044	$	53	$	1,053
Net realized gains (losses)		(136)		408		985		1,027
Net change in unrealized appreciation/(depreciation)		3,026		(3,007)		2,553		(4,085)
Net increase (decrease) in net assets resulting from operations
		3,136		(1,555)		3,591		(2,005)
Policy Transactions:
Policy owners' net payments		546		764		673		830
Policy loans, surrenders and death benefits		(552)		(1,976)		(1,800)		(451)
Mortality and other (net)		(467)		(460)		(431)		(432)
Transfers from other divisions or sponsor		2,987		1,488		1,325		2,538
Transfers to other divisions or sponsor		(1,494)		(1,423)		(1,032)		(1,608)
Net increase (decrease) in net assets resulting from contract
transactions		1,020		(1,607)		(1,265)		877
Net increase (decrease) in net assets		4,156		(3,162)		2,326		(1,128)
Net Assets:
Beginning of period		19,333		22,495		21,011		22,139
End of period	$	23,489	$	19,333	$	23,337	$	21,011

Units issued during the period

Units redeemed during the period

Net units issued (redeemed) during period

2,394	1,597
(2,328)	(2,163)
66	(566)

LifePoints Equity Growth

Strategy Division

Year Ended	Year Ended
December 31,	December 31,
2019	2018

1,4641,737

(2,225)(1,825)

(761)(88)

Credit Suisse Trust Commodity

Return Strategy Division

Year Ended	Year Ended
December 31,	December 31,
2019	2018

Operations:	$	(24)	$	587		$	101	$	456
Net investment income (loss)	$	(24)	$	587		$	101	$	456
Net realized gains (losses)		633		793			(1,972)		(1,287)
Net change in unrealized appreciation/(depreciation)		1,536		(2,664)			3,120		(1,879)
Net increase (decrease) in net assets resulting from operations
		2,145		(1,284)			1,249		(2,710)
Policy Transactions:
Policy owners' net payments		363		404			1,085		836
Policy loans, surrenders and death benefits		(471)		(358)			(767)		(840)
Mortality and other (net)		(198)		(225)			(336)		(390)
Transfers from other divisions or sponsor		336		739			6,889		8,169
Transfers to other divisions or sponsor		(1,486)		(1,009)			(6,765)		(6,151)
Net increase (decrease) in net assets resulting from contract
transactions		(1,456)		(449)			106		1,624
Net increase (decrease) in net assets		689		(1,733)			1,355		(1,086)
Net Assets:
Beginning of period		11,597		13,330			20,036		21,122
End of period	$	12,286	$	11,597	$		21,391	$	20,036

Units issued during the period		691		852			1,765		1,929
Units redeemed during the period		(1,640)		(1,026)			(1,765)		(1,608)
Net units issued (redeemed) during period		(949)		(174)			-		321

The Accompanying Notes are an Integral Part of these Financial Statements.

F-21

Notes to Financial Statements

1.Organization

Northwestern Mutual Variable Life Account ("the Account") is registered as a unit investment trust under the Investment Company Act of 1940 and is a segregated asset account of The Northwestern Mutual Life Insurance Company ("Northwestern Mutual" or "sponsor") used to fund variable life insurance policies ("the Policies").

All assets of each Division of the Account are invested in shares of the corresponding Portfolio of Northwestern Mutual Series Fund, Inc., Fidelity Variable Insurance Products Fund, Neuberger Berman Advisers Management Trust, Russell Investment Funds and Credit Suisse Trust (collectively known as "the Funds"). The Funds are open-end investment companies registered under the Investment Company Act of 1940. The financial statements for the Funds should be read in conjunction with the financial statements of the Divisions. Each Division of the account indirectly bears exposure to the market, credit and liquidity risks of the Funds in which it invests.

New sales of the Policies which invest in the Account were discontinued for Variable CompLife, Variable Executive Life, and Variable Joint Life policies in 2008; Variable Life was discontinued in 1995. However, premium payments made by policyowners existing at that date will continue to be recorded by the Account.

2.Significant Accounting Policies

A.Use of Estimates – The preparation of the financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of increases and decreases in net assets for use in estimates. Actual results could differ from those estimates.

B.Investment Valuation – The shares are valued at the Funds' offering and redemption prices per share. As of December 31, 2019, all of the Account's investments are identified as Level 1 securities for valuation purposes under the Fair Value Measurement Topic of the FASB Accounting Standards Codification. Level 1 fair value is determined by unadjusted quoted prices in active markets for identical securities or derivatives. Level 2 fair value is determined by other significant observable inputs (including quoted prices for similar securities). Level 3 fair value is determined by significant unobservable inputs (including the Account's own assumptions in determining fair value). There were no transfers between levels during the year. All changes in fair value are recorded as change in unrealized appreciation/(depreciation) of investments during the period in the statements of operations of the applicable Division.

C.Investment Income, Securities Transactions and Policy Dividends – Transactions in the Funds' shares are accounted for on the trade date. The basis for determining cost on sale of the Funds' shares is identified cost. Dividend income and distributions of net realized gains from the Funds are recorded on the ex–date of the dividends. Dividends and distributions received are reinvested in additional shares of the respective portfolios of the Funds. The Policies are eligible to receive policy dividends from Northwestern Mutual. Any policy dividends reinvested in the Account are reflected in Policyowners' net payments in the accompanying financial statements.

D.Due to Participants – Upon notification of death of the policyowner, a liability is recorded and is included in Due to Participants in the accompanying financial statements. This liability is identified as Level 1 for valuation purposes under the Fair Value Measurement Topic of the FASB Accounting Standards Codification.

E.Taxes – Northwestern Mutual is taxed as a "life insurance company" under the Internal Revenue Code. The Policies, which are funded in the Account, are taxed as part of the operations of Northwestern Mutual. The Policies provide that a charge for taxes may be made against the assets of the Account. Currently, for Variable Life policies issued before October 11, 1995, Northwestern Mutual charges the Account at an annual rate of 0.05% of the Account's net assets and reserves the right to increase, decrease or eliminate the charge for taxes in the future. Currently, for Variable CompLife policies issued on or after October 11, 1995, Variable Executive Life policies issued on or after March 2, 1998, and Variable Joint Life policies issued on or after December 10, 1998, there is no charge being made against the assets of the Account for federal income taxes, but Northwestern Mutual reserves the right to charge for taxes in the future.

F.Premium Payments – For Variable Life and Variable CompLife policies, the Account is credited for the policyowners' net annual premiums at the respective policy anniversary dates regardless of when policyowners actually pay their premiums. Northwestern Mutual's equity represents any unpaid portion of net annual premiums.

3.Purchases and Sales of Investments

Purchases and sales of the Funds' shares for the year ended December 31, 2019 were as follows (amounts in thousands):

Fund Name	Purchases	Sales
Growth Stock Division............................................................................	$ 75,452	$ 47,219
Focused Appreciation Division...............................................................	25,489	30,145
Large Cap Core Stock Division...............................................................	29,922	26,151
Large Cap Blend Division.......................................................................	2,939	2,882
Index 500 Stock Division........................................................................	121,972	117,375
Large Company Value Division..............................................................	3,806	3,271
Domestic Equity Division.........................................................................	22,933	22,846
Equity Income Division............................................................................	17,708	19,050
Mid Cap Growth Stock Division..............................................................	42,217	45,762
Index 400 Stock Division........................................................................	43,464	31,647
Mid Cap Value Division...........................................................................	11,566	9,071
Small Cap Growth Stock Division...........................................................	56,588	29,416
Index 600 Stock Division........................................................................	10,762	6,611
Small Cap Value Division........................................................................	39,311	22,577
International Growth Division.................................................................	9,966	13,098
	F-22

Notes to Financial Statements

Fund Name	Purchases			Sales
Research International Core Division.....................................................	$	17,123	$	8,465
International Equity Division....................................................................		62,785		50,682
Emerging Markets Equity Division...........................................................		9,853		8,640
Government Money Market Division.......................................................		60,206		62,652
Short-Term Bond Division.......................................................................		20,882		16,049
Select Bond Division...............................................................................		35,049		25,471
Long-Term U.S. Government Bond Division...........................................		5,003		2,819
Inflation Protection Bond Division...........................................................		2,711		2,302
High Yield Bond Division.........................................................................		13,652		10,459
Multi-Sector Bond Division......................................................................		14,849		5,102
Balanced Division...................................................................................		52,118		31,617
Asset Allocation Division........................................................................		8,972		5,573
Fidelity VIP Mid Cap Division...................................................................		28,442		21,346
Fidelity VIP Contrafund Division..............................................................		10,462		6,958
AMT Sustainable Equity Division............................................................		891		1,327
U.S. Strategic Equity Division.................................................................		21,182		22,126
U.S. Small Cap Equity Division................................................................		6,485		11,559
International Developed Markets Division...............................................		11,117		14,902
Strategic Bond Division..........................................................................		14,462		11,769
Global Real Estate Securities Division....................................................		19,434		19,032
LifePoints Moderate Strategy Division....................................................		1,538		1,351
LifePoints Balanced Strategy Division....................................................		5,288		3,631
LifePoints Growth Strategy Division......................................................		3,356		3,372
LifePoints Equity Growth Strategy Division............................................		1,851		2,591
Credit Suisse Trust Commodity Return Strategy Division.......................		3,362		3,154

4.Expenses and Related Party Transactions

A deduction for mortality and expense risks is paid to Northwestern Mutual. Mortality risk is the risk that insureds may not live as long as estimated. Expense risk is the risk that expenses of issuing and administering the Policies may exceed the estimated costs.

For Variable Life and Variable CompLife policies, the deduction is determined daily at an annual rate of 0.50% and 0.45%, respectively, of the net assets of the Account. These charges are reflected as a reduction in invested assets and are included in Mortality and expense risk charges on the statements of operations.

A deduction for the mortality and expense risks for Variable Executive Life policies is determined monthly at an annual rate of 0.48% of the amount invested in the Account for the Policy for the first ten Policy years, and 0.05% thereafter for policies with the Cash Value Amendment, or 0.03% thereafter for the policies without the Cash Value Amendment.

A deduction for the mortality and expense risks for Variable Joint Life policies is determined monthly at an annual rate of 0.00% of the amount invested in the Account. Additional Variable Joint Life mortality and expense risks deductions are determined annually and are paid to Northwestern Mutual for the first ten Policy years based on the age of the insured individuals at the time the policy was issued.

Additional mortality costs are deducted from the Policies annually for Variable Life and Variable CompLife policies, and monthly for Variable Executive Life and Variable Joint Life policies and are paid to Northwestern Mutual to cover the cost of providing insurance protection. For Variable Life and Variable CompLife policies, this cost is actuarially calculated based upon the insured's age, the 1980 Commissioners Standard Ordinary Mortality Table and the amount of insurance provided under the policy. For Variable Executive Life and Variable Joint Life policies, the cost reflects expected mortality costs based upon actual experience.

Certain deductions are also made from the annual, single or other premiums before amounts are allocated to the Account. These deductions are for sales load, administrative expenses, taxes and a risk charge for the guaranteed minimum death benefit among other charges which are detailed in the Prospectus.

Mortality and expense risks deductions for Variable Executive Life and Variable Joint Life policies, as well as the noted additional mortality costs and other deductions for each of the products are reflected as a reduction in units and are included in Mortality and other on the statements of changes in net assets.

F-23

Notes to Financial Statements

5.Subsequent Events

On or around May 1, 2020, the Company will automatically transfer amounts in the Account's investment in the following divisions to a share class of the same Fund that does not have a Rule 12b-1 fee.

Division	Current Fund/Class	New Fund/Class
Fidelity VIP Mid Cap Division	Fidelity VIP Mid Cap Portfolio –	Fidelity VIP Mid Cap Portfolio – Initial
	Service Class 2	Class
Fidelity VIP Contrafund Division	Fidelity VIP Contrafund Portfolio –	Fidelity VIP Contrafund Portfolio –
	Service Class 2	Initial Class
Credit Suisse Commodity Return	Credit Suisse Commodity Return	Credit Suisse Commodity Return
Strategy Division	Strategy Portfolio – Class 1	Strategy Portfolio – Class 2

The Funds will continue to be managed by the same investment advisor according to the same investment objectives and policies and for the same investment advisory and other fee structure as before the transaction. However, expenses related to investment in the new share class of the Funds will not reflect a Rule 12b-1 fee.

Subsequent to December 31, 2019 a pandemic related to COVID-19 was declared which has adversely affected the financial markets and the economy and may continue to do so for an extended period of time. The extent of the impact is uncertain and cannot be predicted at this time. Management will continue to monitor developments which may have a negative impact on the Account's assets.

F-24

Notes to Financial Statements

6. Financial Highlights
	As of the respective period end date:											For the respective period ended:
										Dividend
										Income as		Expense Ratio,
	Units									a % of		Expense Ratio,
	Outstanding		Unit Value,				Net Assets			Average		Lowest to	Total Return Lowest
	(000's)		Lowest to Highest					(000's)		Net Assets		Highest (1)	to Highest (1)
Growth Stock Division
2019......	70,191	$	6.844781	to	$	96.585761	$	545,267	0.66		%	0.00% to 0.55%	28.98	%	to	29.68	%
2018......	73,927		5.301752	to		74.477290		444,435	0.70			0.00 to 0.55	0.70		to	1.26
2017......	75,993		5.259578	to		73.551913		455,218	0.86			0.00 to 0.55	23.59		to	24.27
2016......	78,732		4.251519	to		59.189518		381,579	0.87			0.00 to 0.55	1.91		to	2.47
2015......	82,582		4.167790	to		57.763945		392,702	0.74			0.00 to 0.55	5.43		to	6.01
Focused Appreciation Division
2019......	29,318	$	6.365138	to	$	68.873586	$	219,819	0.64		%	0.00% to 0.55%	31.25	%	to	31.97	%
2018......	31,537		4.844807	to		52.188290		181,353	0.49			0.00 to 0.55	(2.87)		to	(2.34)
2017......	32,539		4.983314	to		53.438372		191,961	0.72			0.00 to 0.55	32.89		to	33.62
2016......	33,700		3.746116	to		39.992151		146,387	0.24			0.00 to 0.55	5.30		to	5.87
2015......	34,234		3.554167	to		37.773111		138,660	0.00			0.00 to 0.55	13.02		to	13.64
Large Cap Core Stock Division
2019......	58,418	$	4.680129	to	$	65.424142	$	319,366	1.20		%	0.00% to 0.55%	30.47	%	to	31.19	%
2018......	61,022		3.583452	to		49.869208		255,743	1.51			0.00 to 0.55	(6.55)		to	(6.04)
2017......	63,131		3.831001	to		53.073917		282,834	1.76			0.00 to 0.55	24.19		to	24.87
2016......	64,732		3.081784	to		42.503832		234,433	2.16			0.00 to 0.55	6.98		to	7.57
2015......	71,653		2.759081	to		37.544148		233,882	1.15			0.00 to 0.55	27.88		to	28.58
Large Cap Blend Division
2019......	4,966	$	2.430590	to	$	21.249241	$	13,260	1.12		%	0.00% to 0.55%	23.29	%	to	23.97	%
2018......	5,369		1.969452	to		17.140701		11,780	0.78			0.00 to 0.55	(4.53)		to	(4.00)
2017......	5,549		2.060897	to		17.855817		12,473	0.92			0.00 to 0.55	18.38		to	19.02
2016......	5,069		1.739254	to		15.001832		9,582	1.06			0.00 to 0.55	13.36		to	13.99
2015......	5,414		1.532727	to		13.161232		8,934	0.93			0.00 to 0.55	(2.95)		to	(2.42)
Index 500 Stock Division
2019......	181,559	$	7.598098	to	$	178.109105	$	1,676,771	1.61		%	0.00% to 0.55%	30.46	%	to	31.18	%
2018......	186,899		5.818234	to		135.776139		1,326,361	1.60			0.00 to 0.55	(5.10)		to	(4.58)
2017......	191,990		6.124794	to		142.286114		1,445,616	1.76			0.00 to 0.55	20.85		to	21.52
2016......	196,058		5.062909	to		117.092375		1,222,210	1.85			0.00 to 0.55	11.12		to	11.73
2015......	198,438		4.551560	to		104.794845		1,113,211	1.70			0.00 to 0.55	0.62		to	1.17
Large Company Value Division
2019......	5,997	$	2.334690	to	$	20.083819	$	15,613	2.21		%	0.00% to 0.55%	26.96	%	to	27.66	%
2018......	6,176		1.837071	to		15.732361		12,933	1.78			0.00 to 0.55	(8.43)		to	(7.92)
2017......	6,091		2.004205	to		17.086312		13,497	2.00			0.00 to 0.55	10.49		to	11.10
2016......	6,290		1.812084	to		15.379433		12,809	1.71			0.00 to 0.55	14.73		to	15.36
2015......	5,877		1.577867	to		13.331635		10,525	1.62			0.00 to 0.55	(4.37)		to	(3.85)

Domestic Equity Division
2019......	60,393	$	3.219819	to	$	35.207252	$	223,783	1.83		%	0.00% to 0.55%	20.11	%	to	20.77	%
2018......	63,912		2.678096	to		29.152607		197,690	1.74			0.00 to 0.55	(3.34)		to	(2.81)
2017......	67,362		2.768059	to		29.996128		217,712	1.62			0.00 to 0.55	13.16		to	13.78
2016......	71,274		2.443831	to		26.364364		203,723	1.86			0.00 to 0.55	14.35		to	14.98
2015......	73,953		2.135000	to		22.929503		183,664	1.82			0.00 to 0.55	(0.64)		to	(0.09)

Equity Income Division
2019......	31,552	$	3.739921	to	$	40.467475	$	137,255	2.29		%	0.00% to 0.55%	25.92	%	to	26.61	%
2018......	34,607		2.967059	to		31.961107		119,195	2.01			0.00 to 0.55	(9.84)		to	(9.35)
2017......	35,456		3.287847	to		35.257091		135,832	2.20			0.00 to 0.55	15.61		to	16.24
2016......	37,103		2.841098	to		30.330455		122,350	2.03			0.00 to 0.55	18.52		to	19.17
2015......	38,972		2.394831	to		25.451821		109,208	1.69			0.00 to 0.55	(7.25)		to	(6.74)

(1)Total return includes deductions for management and other expenses; it excludes deductions for sales loads and other charges, which are a reduction in units. The expense ratios further reflect only those expenses which impact total return. For additional information regarding all expenses assessed, refer to the accompanying notes.

F-25

Notes to Financial Statements

6. Financial Highlights
	As of the respective period end date:											For the respective period ended:
										Dividend
										Income as		Expense Ratio,
	Units									a % of		Expense Ratio,
	Outstanding		Unit Value,				Net Assets			Average		Lowest to	Total Return Lowest
	(000's)		Lowest to Highest					(000's)		Net Assets		Highest (1)	to Highest (1)
Mid Cap Growth Stock Division
2019......	87,172	$	5.429275	to	$	154.540637	$	562,896	0.18		%	0.00% to 0.55%	32.29	%	to	33.01	%
2018......	91,231		4.100122	to		116.184426		445,659	0.13			0.00 to 0.55	(7.89)		to	(7.38)
2017......	94,455		4.446849	to		125.441587		501,695	0.25			0.00 to 0.55	19.63		to	20.29
2016......	97,909		3.713373	to		104.283373		434,672	0.19			0.00 to 0.55	0.28		to	0.83
2015......	101,666		3.699378	to		103.425002		450,936	0.04			0.00 to 0.55	0.16		to	0.71
Index 400 Stock Division
2019......	58,779	$	5.677085	to	$	66.313755	$	372,368	1.21		%	0.00% to 0.55%	25.20	%	to	25.88	%
2018......	60,974		4.530052	to		52.678316		309,099	1.11			0.00 to 0.55	(11.82)		to	(11.33)
2017......	62,321		5.132177	to		59.411237		358,143	1.07			0.00 to 0.55	15.33		to	15.96
2016......	64,605		4.445732	to		51.235085		321,909	1.15			0.00 to 0.55	19.72		to	20.38
2015......	66,515		3.709654	to		42.560713		275,417	1.08			0.00 to 0.55	(2.92)		to	(2.38)
Mid Cap Value Division
2019......	14,896	$	4.554015	to	$	49.276848	$	76,441	1.61		%	0.00% to 0.55%	28.50	%	to	29.21	%
2018......	15,826		3.540449	to		38.138006		63,562	1.60			0.00 to 0.55	(13.33)		to	(12.85)
2017......	16,920		4.080949	to		43.762109		78,440	1.44			0.00 to 0.55	11.20		to	11.81
2016......	17,981		3.666285	to		39.139970		74,486	1.68			0.00 to 0.55	22.56		to	23.23
2015......	17,077		2.988550	to		31.761925		57,463	1.64			0.00 to 0.55	(1.87)		to	(1.33)

Small Cap Growth Stock Division
2019......	51,995	$	5.829238	to	$	78.030714	$	330,603	0.10		%	0.00% to 0.55%	34.95	%	to	35.69	%
2018......	54,724		4.315234	to		57.505467		257,677	0.00			0.00 to 0.55	(12.19)		to	(11.71)
2017......	56,874		4.909491	to		65.129570		305,351	0.11			0.00 to 0.55	20.94		to	21.61
2016......	59,134		4.055279	to		53.557262		262,833	0.23			0.00 to 0.55	11.64		to	12.25
2015......	61,830		3.628992	to		47.712811		246,246	0.11			0.00 to 0.55	(0.23)		to	0.32
Index 600 Stock Division
2019......	18,011	$	2.411252	to	$	27.399696	$	50,277	0.25		%	0.00% to 0.55%	21.77	%	to	22.44	%
2018......	17,485		1.978237	to		22.378619		40,272	1.41			0.00 to 0.55	(9.28)		to	(8.78)
2017......	15,104		2.178475	to		24.532713		38,659	1.86			0.00 to 0.55	12.31		to	12.93
2016......	13,434		1.937744	to		21.724279		30,548	0.58			0.00 to 0.55	25.43		to	26.12
2015......	11,625		1.543293	to		17.224563		20,831	0.00			0.00 to 0.55	(2.88)		to	(2.35)

Small Cap Value Division
2019......	38,061	$	4.791826	to	$	52.395678	$	204,813	0.47		%	0.00% to 0.55%	25.20	%	to	25.89	%
2018......	40,431		3.823467	to		41.620093		175,135	0.53			0.00 to 0.55	(13.21)		to	(12.73)
2017......	42,358		4.400993	to		47.690780		211,637	0.77			0.00 to 0.55	11.04		to	11.65
2016......	44,467		3.959369	to		42.713658		199,932	0.93			0.00 to 0.55	31.67		to	32.39
2015......	45,429		3.004079	to		32.262868		156,881	0.68			0.00 to 0.55	(5.97)		to	(5.45)

International Growth Divisio n
2019......	41,418	$	2.645647	to	$	28.928599	$	122,981	1.25		%	0.00% to 0.55%	34.07	%	to	34.80	%
2018......	43,088		1.971431	to		21.459907		95,359	1.40			0.00 to 0.55	(11.76)		to	(11.28)
2017......	43,701		2.232113	to		24.188049		110,000	1.30			0.00 to 0.55	29.32		to	30.03
2016......	43,639		1.832844	to		19.596007		90,803	1.30			0.00 to 0.55	(5.04)		to	(4.52)
2015......	44,659		1.928280	to		20.524033		98,031	1.40			0.00 to 0.55	19.15		to	19.81

Research International Core		Division
2019......	32,749	$	1.454984	to	$	14.176293	$	53,645	1.66 %			0.00% to 0.55%	27.55	%	to	28.25	%
2018......	27,318		1.139564	to		11.053328		36,026	1.66			0.00 to 0.55	(14.14)		to	(13.66)
2017......	25,545		1.325886	to		12.802534		39,047	1.68			0.00 to 0.55	27.51		to	28.21
2016......	21,617		1.038788	to		9.985604		26,555	1.77			0.00 to 0.55	(1.66)		to	(1.12)
2015......	20,383		1.055308	to		10.098885		24,504	2.05			0.00 to 0.55	(1.65)		to	(1.11)

F-26

Notes to Financial Statements

6. Financial Highlights
	As of the respective period end date:											For the respective period ended:
										Dividend
										Income as		Expense Ratio,
	Units									a % of		Expense Ratio,
	Outstanding		Unit Value,				Net Assets			Average		Lowest to	Total Return Lowest
	(000's)		Lowest to Highest					(000's)		Net Assets		Highest (1)	to Highest (1)
International Equity Division
2019......	123,522	$	3.700743	to	$	5.804990	$	526,380	2.49		%	0.00% to 0.55%	11.98	%	to	12.60	%
2018......	128,969		3.301503	to		5.155553		489,960	2.50			0.00 to 0.55	(15.87)		to	(15.41)
2017......	132,108		3.920448	to		6.094491		598,133	2.35			0.00 to 0.55	21.63		to	22.30
2016......	134,698		3.220087	to		4.983406		502,291	2.14			0.00 to 0.55	2.33		to	2.89
2015......	137,889		3.143590	to		4.843231		502,646	2.95			0.00 to 0.55	(2.75)		to	(2.21)

Emerging Markets Equity Division
2019......	57,970	$	1.056655	to	$	12.866468	$	69,251	1.11		%	0.00% to 0.55%	19.94	%	to	20.60	%
2018......	56,859		0.880106	to		10.668771		56,824	1.31			0.00 to 0.55	(14.23)		to	(13.75)
2017......	53,406		1.025080	to		12.370178		62,871	0.92			0.00 to 0.55	27.14		to	27.84
2016......	42,450		0.805449	to		9.676365		39,231	0.72			0.00 to 0.55	8.47		to	9.06
2015......	39,847		0.741823	to		8.872116		34,756	0.88			0.00 to 0.55	(12.72)		to	(12.24)
Government Money Market Division
2019......	79,304	$	1.568812	to	$	43.345856	$	152,147	1.92		%	0.00% to 0.55%	1.38	%	to	1.94	%
2018......	78,642		1.545924	to		42.522150		154,530	1.53			0.00 to 0.55	0.97		to	1.53
2017......	77,104		1.529296	to		41.875417		147,850	0.59			0.00 to 0.55	0.05		to	0.60
2016......	83,720		1.527011	to		41.625993		164,799	0.12			0.00 to 0.55	(0.42)		to	0.13
2015......	79,683		1.531914	to		41.572750		171,148	0.01			0.00 to 0.55	(0.54)		to	0.01
Short-Term Bond Division
2019......	22,993	$	1.084100	to	$	13.380170	$	30,340	2.05		%	0.00% to 0.55%	3.81	%	to	4.38	%
2018......	16,642		1.043226	to		12.818134		24,893	1.54			0.00 to 0.55	0.81		to	1.36
2017......	16,212		1.033965	to		12.646732		22,489	1.28			0.00 to 0.55	0.78		to	1.33
2016......	16,506		1.025038	to		12.481062		20,405	1.19			0.00 to 0.55	1.12		to	1.67
2015......	12,538		1.012734	to		12.275717		15,742	0.71			0.00 to 0.55	0.17	(2)	to	0.72
Select Bond Division
2019......	70,958	$	3.038977	to	$	245.997917	$	266,601	2.77		%	0.00% to 0.55%	8.06	%	to	8.65	%
2018......	70,449		2.809628	to		226.413644		243,011	2.25			0.00 to 0.55	(0.76)		to	(0.21)
2017......	70,939		2.828365	to		226.897252		251,754	2.07			0.00 to 0.55	3.02		to	3.58
2016......	70,949		2.742774	to		219.047810		249,118	1.94			0.00 to 0.55	2.49		to	3.06
2015......	70,587		2.673382	to		212.549665		243,197	1.50			0.00 to 0.55	(0.02)		to	0.53

Long-Term U.S. Government Bond Division
2019......	7,922	$	1.603184	to	$	22.930587	$	13,950	2.20		%	0.00% to 0.55%	12.55	%	to	13.17	%
2018......	6,965		1.423026	to		20.262648		10,667	2.02			0.00 to 0.55	(2.58)		to	(2.04)
2017......	6,284		1.459300	to		20.685508		9,880	1.86			0.00 to 0.55	7.69		to	8.28
2016......	6,543		1.353810	to		19.104481		9,594	1.87			0.00 to 0.55	0.54		to	1.09
2015......	5,671		1.345254	to		18.898765		8,101	2.11			0.00 to 0.55	(2.01)		to	(1.47)

Inflation Protection Division
2019......	8,193	$	1.172363	to	$	15.648347	$	11,881	2.63		%	0.00% to 0.55%	8.42	%	to	9.02	%
2018......	8,142		1.080225	to		14.354000		10,811	2.09			0.00 to 0.55	(3.14)		to	(2.61)
2017......	7,799		1.114216	to		14.738894		10,493	0.69			0.00 to 0.55	3.01		to	3.58
2016......	6,910		1.080563	to		14.229840		8,987	1.23			0.00 to 0.55	4.11		to	4.68
2015......	6,372		1.036853	to		13.593038		7,975	2.34			0.00 to 0.55	(2.74)		to	(2.20)

High Yield Bond Division
2019......	23,653	$	4.407984	to	$	59.428074	$	120,105	5.49		%	0.00% to 0.55%	14.34	%	to	14.97	%
2018......	24,213		3.851321	to		51.690668		107,388	5.42			0.00 to 0.55	(3.24)		to	(2.71)
2017......	25,336		3.976385	to		53.128855		116,367	5.44			0.00 to 0.55	6.30		to	6.88
2016......	25,741		3.737039	to		49.707921		110,842	5.33			0.00 to 0.55	13.97		to	14.60
2015......	26,563		3.275752	to		43.377037		100,914	4.53			0.00 to 0.55	(1.90)		to	(1.36)

(2)Ratio is less than 0.005%.

F-27

Notes to Financial Statements

6. Financial Highlights
	As of the respective period end date:										For the respective period ended:
										Dividend
										Income as	Expense Ratio,
	Units									a % of	Expense Ratio,
	Outstanding		Unit Value,				Net Assets			Average	Lowest to	Total Return Lowest
	(000's)		Lowest to Highest					(000's)		Net Assets	Highest (1)	to Highest (1)
Multi-Sector Bond Division
2019......	32,487	$	1.515308	to	$	21.138053	$	55,539	4.66 %		0.00% to 0.55%	13.42	%	to	14.04	%
2018......	27,865		1.334721	to		18.535667		41,877	3.12		0.00 to 0.55	(1.84)		to	(1.30)
2017......	26,759		1.358433	to		18.780164		40,381	3.85		0.00 to 0.55	7.79		to	8.38
2016......	23,443		1.258995	to		17.327635		32,977	4.53		0.00 to 0.55	10.48		to	11.09
2015......	21,624		1.138400	to		15.597729		27,546	5.58		0.00 to 0.55	(2.76)		to	(2.22)

Balanced Division
2019......	45,747	$	4.418751	to	$	246.784874	$	400,553	2.30 %		0.00% to 0.55%	17.28	%	to	17.92	%
2018......	45,928		3.764026	to		209.277798		347,349	2.37		0.00 to 0.55	(3.98)		to	(3.45)
2017......	47,261		3.916267	to		216.761163		375,073	2.19		0.00 to 0.55	11.37		to	11.98
2016......	48,762		3.512832	to		193.563662		347,403	2.26		0.00 to 0.55	6.00		to	6.58
2015......	53,304		3.310708	to		181.609174		345,035	1.97		0.00 to 0.55	(0.67)		to	(0.12)

Asset Allocation Division
2019......	17,417	$	2.660780	to	$	29.093477	$	57,278	2.23 %		0.00% to 0.55%	20.42	%	to	21.08	%
2018......	17,585		2.207402	to		24.028105		48,341	1.99		0.00 to 0.55	(5.40)		to	(4.88)
2017......	18,186		2.331046	to		25.259678		53,600	2.07		0.00 to 0.55	14.25		to	14.87
2016......	17,637		2.038314	to		21.988973		44,895	2.37		0.00 to 0.55	7.20		to	7.79
2015......	18,489		1.899554	to		20.400265		44,291	1.92		0.00 to 0.55	(0.97)		to	(0.43)
Fidelity VIP Mid Cap Division
2019......	28,622	$	5.515184	to	$	59.676525	$	180,950	0.67 %		0.00% to 0.55%	22.50	%	to	23.17	%
2018......	30,730		4.497777	to		48.449732		159,036	0.40		0.00 to 0.55	(15.24)		to	(14.77)
2017......	31,890		5.301232	to		56.847028		195,568	0.49		0.00 to 0.55	19.88		to	20.54
2016......	33,080		4.417776	to		47.161926		169,985	0.32		0.00 to 0.55	11.31		to	11.92
2015......	34,908		3.964922	to		42.137819		162,700	0.25		0.00 to 0.55	(2.17)		to	(1.63)
Fidelity VIP Contrafund Division
2019......	18,727	$	2.438969	to	$	27.008170	$	52,730	0.22 %		0.00% to 0.55%	30.56	%	to	31.27	%
2018......	19,649		1.866274	to		20.573795		41,918	0.44		0.00 to 0.55	(7.15)		to	(6.64)
2017......	19,612		2.008049	to		22.036922		44,858	0.77		0.00 to 0.55	20.92		to	21.59
2016......	20,138		1.658952	to		18.124509		38,211	0.62		0.00 to 0.55	7.14		to	7.73
2015......	22,441		1.546836	to		16.824006		39,557	0.82		0.00 to 0.55	(0.13)		to	0.42
AMT Sustainable Equity Division
2019......	1,863	$	2.274699	to	$	25.016087	$	5,561	0.41 %		0.00% to 0.55%	25.20	%	to	25.88	%
2018......	2,134		1.815096	to		19.872228		5,073	0.51		0.00 to 0.55	(6.23)		to	(5.72)
2017......	2,092		1.933853	to		21.076980		5,287	0.51		0.00 to 0.55	17.78		to	18.43
2016......	2,390		1.640254	to		17.797220		4,887	0.71		0.00 to 0.55	9.26		to	9.86
2015......	2,413		1.499733	to		16.199640		4,514	0.57		0.00 to 0.55	(1.01)		to	(0.46)
U.S. Strategic Equity Division
2019......	83,411	$	2.520964	to	$	28.741505	$	237,880	1.07 %		0.00% to 0.55%	29.55	%	to	30.26	%
2018......	88,552		1.943977	to		22.064057		195,830	1.15		0.00 to 0.55	(10.14)		to	(9.64)
2017......	92,817		2.161152	to		24.418364		230,509	1.02		0.00 to 0.55	20.14		to	20.80
2016......	99,289		1.797106	to		20.214494		204,986	1.04		0.00 to 0.55	10.03		to	10.64
2015......	108,402		1.631656	to		18.271298		203,098	0.82		0.00 to 0.55	0.55		to	1.11
U.S. Small Cap Equity Division
2019......	29,197	$	3.197903	to	$	37.394611	$	104,692	0.56 %		0.00% to 0.55%	22.40	%	to	23.07	%
2018......	31,008		2.610168	to		30.385277		91,320	0.47		0.00 to 0.55	(12.45)		to	(11.97)
2017......	32,697		2.978626	to		34.518205		110,459	0.18		0.00 to 0.55	14.85		to	15.48
2016......	34,090		2.590944	to		29.891437		100,382	0.83		0.00 to 0.55	18.01		to	18.66
2015......	36,650		2.193357	to		25.191084		91,739	0.67		0.00 to 0.55	(7.69)		to	(7.19)

F-28

Notes to Financial Statements

6. Financial Highlights
	As of the respective period end date:											For the respective period ended:
										Dividend
										Income as		Expense Ratio,
	Units									a % of		Expense Ratio,
	Outstanding		Unit Value,				Net Assets			Average		Lowest to	Total Return Lowest
	(000's)		Lowest to Highest					(000's)		Net Assets		Highest (1)	to Highest (1)
International Developed Markets Division
2019......	55,727	$	2.055606	to	$	22.896522	$	131,391	2.62		%	0.00% to 0.55%	19.07	%	to	19.72	%
2018......	58,409		1.724712	to		19.124827		116,077	1.72			0.00 to 0.55	(15.34)		to	(14.87)
2017......	59,631		2.035246	to		22.466466		141,472	2.65			0.00 to 0.55	24.29		to	24.98
2016......	60,682		1.635824	to		17.976751		116,151	3.23			0.00 to 0.55	1.80		to	2.36
2015......	62,803		1.605290	to		17.562157		117,670	1.15			0.00 to 0.55	(1.85)		to	(1.31)

Strategic Bond Division
2019......	27,416	$	2.469076	to	$	26.963899	$	88,249	2.75		%	0.00% to 0.55%	8.60	%	to	9.19	%
2018......	28,147		2.271363	to		24.693685		81,612	2.12			0.00 to 0.55	(1.35)		to	(0.81)
2017......	29,030		2.300337	to		24.895915		86,180	1.35			0.00 to 0.55	3.30		to	3.86
2016......	29,943		2.224732	to		23.970161		86,313	1.59			0.00 to 0.55	2.54		to	3.10
2015......	29,943		2.167486	to		23.248775		85,576	2.39			0.00 to 0.55	(0.69)		to	(0.14)

Global Real Estate Securities Division
2019......	30,637	$	5.422414	to	$	59.135972	$	186,744	5.05		%	0.00% to 0.55%	20.98	%	to	21.64	%
2018......	32,010		4.477782	to		48.615288		161,150	4.49			0.00 to 0.55	(6.24)		to	(5.73)
2017......	33,345		4.771257	to		51.568102		179,095	3.63			0.00 to 0.55	11.19		to	11.80
2016......	34,924		4.286703	to		46.124107		168,647	4.49			0.00 to 0.55	2.46		to	3.02
2015......	36,412		4.179747	to		44.771967		172,160	1.64			0.00 to 0.55	(0.30)		to	0.25

LifePoints Moderate Strategy Division
2019......	3,788	$	1.435781	to	$	17.716081	$	7,499	1.21		%	0.00% to 0.55%	11.93	%	to	12.54	%
2018......	3,780		1.281521	to		15.741887		6,714	4.57			0.00 to 0.55	(5.44)		to	(4.92)
2017......	4,399		1.353996	to		16.557145		6,960	2.27			0.00 to 0.55	9.29		to	9.88
2016......	3,497		1.237730	to		15.067752		5,175	3.65			0.00 to 0.55	7.16		to	7.75
2015......	2,175		1.153913	to		13.984420		3,256	2.55			0.00 to 0.55	(2.24)		to	(1.71)

LifePoints Balanced Strategy Division
2019......	10,992	$	1.547882	to	$	17.958473	$	23,489	1.59		%	0.00% to 0.55%	15.81	%	to	16.45	%
2018......	10,926		1.335190	to		15.421524		19,333	5.36			0.00 to 0.55	(7.31)		to	(6.80)
2017......	11,492		1.439016	to		16.545882		22,495	2.36			0.00 to 0.55	11.39		to	12.00
2016......	10,796		1.290626	to		14.773443		18,770	3.30			0.00 to 0.55	8.46		to	9.05
2015......	11,511		1.188804	to		13.546956		17,506	2.20			0.00 to 0.55	(2.84)		to	(2.30)

LifePoints Growth Strategy Division
2019......	10,998	$	1.608669	to	$	17.402048	$	23,337	0.70		%	0.00% to 0.55%	17.42	%	to	18.06	%
2018......	11,759		1.368685	to		14.739598		21,011	4.93			0.00 to 0.55	(8.55)		to	(8.05)
2017......	11,847		1.495208	to		16.029490		22,139	3.19			0.00 to 0.55	15.02		to	15.65
2016......	12,307		1.298639	to		13.860030		19,559	2.92			0.00 to 0.55	9.13		to	9.73
2015......	13,267		1.188862	to		12.631574		19,036	1.81			0.00 to 0.55	(3.84)		to	(3.31)

LifePoints Equity Growth Strategy Division
2019......	5,785	$	1.675624	to	$	16.548015	$	12,286	0.23		%	0.00% to 0.55%	19.43	%	to	20.09	%
2018......	6,734		1.401615	to		13.779890		11,597	4.92			0.00 to 0.55	(9.95)		to	(9.45)
2017......	6,907		1.554985	to		15.218716		13,330	3.38			0.00 to 0.55	16.91		to	17.55
2016......	6,850		1.328754	to		12.946453		10,823	2.95			0.00 to 0.55	10.24		to	10.85
2015......	6,000		1.204105	to		11.679451		8,824	1.53			0.00 to 0.55	(4.40)		to	(3.87)

Credit Suisse Trust Commodity Return Strategy Division
2019......	4,165	$	4.729147	to	$	5.018507	$	21,391	0.88		%	0.00% to 0.55%	6.11	%	to	6.69	%
2018......	4,165		4.432602	to		4.724979		20,036	2.52			0.00 to 0.55	(12.14)		to	(11.66)
2017......	3,845		5.017461	to		5.372638		21,122	9.04			0.00 to 0.55	0.96		to	1.52
2016......	3,494		4.942479	to		5.316102		18,978	0.00			0.00 to 0.55	11.41		to	12.02
2015......	3,059		4.412123	to		4.767003		14,882	0.00			0.00 to 0.55	(25.44)		to	(25.03)

F-29

The Northwestern Mutual

Life Insurance Company

Financial Statements and

Supplementary Information

December 31, 2019, 2018 and 2017

NM-1

LOGO

Report of Independent Auditors

To the Board of Trustees of

The Northwestern Mutual Life Insurance Company

We have audited the accompanying statutory financial statements of The Northwestern Mutual Life Insurance Company (the “Company”), which comprise the statutory statements of financial position as of December 31, 2019 and 2018, and the related statutory statements of operations and changes in surplus, and of cash flows for each of the three years in the period ended December 31, 2019.

Management’s Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of the financial statements in accordance with the accounting practices prescribed or permitted by the Office of the Commissioner of Insurance of the State of Wisconsin. Management is also responsible for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditors’ Responsibility

Our responsibility is to express an opinion on the financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on our judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the Company’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Basis for Adverse Opinion on U.S. Generally Accepted Accounting Principles

As described in Note 1 to the financial statements, the financial statements are prepared by the Company on the basis of the accounting practices prescribed or permitted by the Office of the Commissioner of Insurance of the State of Wisconsin, which is a basis of accounting other than accounting principles generally accepted in the United States of America.

The effects on the financial statements of the variances between the statutory basis of accounting described in Note 1 and accounting principles generally accepted in the United States of America, although not reasonably determinable, are presumed to be material.

NM-2

Adverse Opinion on U.S. Generally Accepted Accounting Principles

In our opinion, because of the significance of the matter discussed in the “Basis for Adverse Opinion on U.S. Generally Accepted Accounting Principles” paragraph, the financial statements referred to above do not present fairly, in accordance with accounting principles generally accepted in the United States of America, the financial position of the Company as of December 31, 2019 and 2018, or the results of its operations or its cash flows for each of the three years in the period ended December 31, 2019.

Opinion on Statutory Basis of Accounting

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2019 and 2018, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2019, in accordance with the accounting practices prescribed or permitted by the Office of the Commissioner of Insurance of the State of Wisconsin described in Note 1.

LOGO

Milwaukee, Wisconsin

February 14, 2020

NM-3

The Northwestern Mutual Life Insurance Company

Statements of Financial Position

(in millions)


	December 31,
	2019		2018

Assets:
Bonds	$	159,760	$	153,713
Mortgage loans		39,771		36,755
Policy loans		17,829		17,693
Common and preferred stocks		4,677		5,574
Real estate		2,872		2,576
Other investments		20,962		17,048
Cash and short-term investments		2,408		1,899


Total investments		248,279		235,258

Due and accrued investment income		2,057		1,956
Net deferred tax assets		1,609		1,792
Deferred premium and other assets		3,541		3,444
Separate account assets		34,832		29,717


Total assets	$	290,318	$	272,167


Liabilities and surplus:
Reserves for policy benefits	$	211,100	$	202,816
Policyowner dividends payable		5,995		5,635
Interest maintenance reserve		979		580
Asset valuation reserve		6,203		4,597
Income taxes payable		129		249
Other liabilities		6,864		6,439
Separate account liabilities		34,832		29,717


Total liabilities		266,102		250,033

Surplus:
Surplus notes		3,568		2,948
Unassigned surplus		20,648		19,186

Total surplus		24,216		22,134


Total liabilities and surplus	$	290,318	$	272,167

The accompanying notes are an integral part of these financial statements.

NM-4

The Northwestern Mutual Life Insurance Company

Statements of Operations

(in millions)


	For the years ended
	December 31,

	2019			2018			2017

Revenue:
Premiums	$	19,010		$	18,036		$	17,897
Net investment income		10,149			9,791			9,541
Other income		696			655			649


Total revenue		29,855			28,482			28,087


Benefits and expenses:
Benefit payments to policyowners and beneficiaries		11,515			11,436			10,332
Net additions to policy benefit reserves		9,451			8,079			8,700
Net transfers from separate accounts		(783	)		(497	)		(229	)


Total benefits		20,183			19,018			18,803

Commissions and operating expenses		3,306			3,230			3,120


Total benefits and expenses		23,489			22,248			21,923


Gain from operations before dividends and taxes		6,366			6,234			6,164

Policyowner dividends		5,999			5,634			5,338


Gain from operations before taxes		367			600			826
Income tax benefit		(199	)		(159	)		(98	)


Net gain from operations		566			759			924
Net realized capital gains		702			24			93


Net income	$	1,268		$	783		$	1,017

The accompanying notes are an integral part of these financial statements.

NM-5

The Northwestern Mutual Life Insurance Company

Statements of Changes in Surplus

(in millions)


	For the years ended

	December 31,
	2019			2018			2017

Beginning of year balance	$	22,134		$	20,851		$	20,230

Net income		1,268			783			1,017

Change in net unrealized capital gains and losses		1,141			(126	)		822

Change in net deferred tax assets		(130	)		(76	)		(1,323	)

Change in nonadmitted assets		(143	)		169			(390	)

Change in asset valuation reserve		(1,606	)		(263	)		(887	)

Change in surplus notes		620			-			1,198

Other surplus changes		932			796			184



Net increase in surplus		2,082			1,283			621


End of year balance	$	24,216		$	22,134		$	20,851

The accompanying notes are an integral part of these financial statements.

NM-6

The Northwestern Mutual Life Insurance Company

Statements of Cash Flows

(in millions)


	For the years ended

	December 31,
	2019			2018			2017

Cash flows from operating activities:
Premiums and other income received	$	13,864		$	13,252		$	12,957
Investment income received		9,518			9,202			9,012
Benefit and dividend payments to policyowners and beneficiaries		(10,660	)		(10,513	)		(9,506	)
Net transfers from separate accounts		770			496			228
Commissions, expenses and taxes paid		(3,268	)		(2,699	)		(3,080	)


Net cash provided by operating activities		10,224			9,738			9,611


Cash flows from investing activities:
Proceeds from investments sold or matured:
Bonds		41,841			33,279			44,511
Mortgage loans		3,078			3,167			2,581
Common and preferred stocks		5,461			4,886			2,750
Real estate		941			23			284
Other investments		2,235			2,831			2,193


Subtotal proceeds from investments		53,556			44,186			52,319


Cost of investments acquired:
Bonds		(47,219	)		(40,797	)		(50,472	)
Mortgage loans		(6,048	)		(4,314	)		(4,096	)
Common and preferred stocks		(3,832	)		(4,857	)		(3,549	)
Real estate		(841	)		(168	)		(148	)
Other investments		(5,634	)		(4,515	)		(4,431	)


Subtotal cost of investments acquired		(63,574	)		(54,651	)		(62,696	)


Net inflows of policy loans		168			35			74


Net cash applied to investing activities		(9,850	)		(10,430	)		(10,303	)


Cash flows from financing and miscellaneous sources:
Surplus notes issuance		596			-			1,198
Net outflows on deposit-type contracts		(232	)		(350	)		(220	)
Other cash provided (applied)		(229	)		472			(117	)


Net cash provided by (applied to) financing and miscellaneous sources		135			122			861


Net increase (decrease) in cash and short-term investments		509			(570	)		169

Cash and short-term investments, beginning of year		1,899			2,469			2,300


Cash and short-term investments, end of year	$	2,408		$	1,899		$	2,469

The accompanying notes are an integral part of these financial statements.

NM-7

The Northwestern Mutual Life Insurance Company

Statements of Cash Flows (supplemental)

(in millions)


	For the years ended
	December 31,
	2019		2018		2017

Supplemental disclosures of cash flow information

Non-cash operating, investing and financing and miscellaneous sources not included in the statements of cash flows:

Operating:
Dividends used to pay premiums and loans	$	5,453	$	5,149	$	5,025
Capitalized interest and payment in-kind investment income		870		776		729
Other policyowner contract activity		245		226		207
Employee benefit and compensation plan expenses		155		128		129

Investing:
Bond refinancings and exchanges		13,075		2,116		1,826
Mortgage loan refinancings and transfers		731		1,377		845
Net policy loan activity		316		295		303
Other invested asset exchanges		270		103		88
Common stock exchanges		105		144		93
Net premium loan activity		125		139		48
Net asset transfers with affiliated entities		199		138		803

Financing and Miscellaneous:
Deposit-type contract deposits and interest credited		505		391		439
Surplus note exchange		24		-		-

The accompanying notes are an integral part of these financial statements.

NM-8

The Northwestern Mutual Life Insurance Company

Notes to Financial Statements

December 31, 2019, 2018 and 2017

1.	Basis of Presentation

The accompanying statutory financial statements include the accounts of The Northwestern Mutual Life Insurance Company (the Company). The Company offers life, annuity and disability insurance products to the personal, business and estate markets throughout the United States of America.

As part of an affiliated reinsurance agreement, the Company assumes all of the risks associated with the long-term care policies issued by its wholly-owned subsidiary, Northwestern Long Term Care Insurance Company (NLTC). See Note 9 for more information regarding reinsurance and its impacts on the Company’s financial statements.

These financial statements were prepared in accordance with accounting practices prescribed or permitted by the Office of the Commissioner of Insurance of the State of Wisconsin (statutory basis of accounting or SAP), which are based on the Accounting Practices and Procedures Manual of the National Association of Insurance Commissioners (NAIC). Financial statements prepared on the statutory basis of accounting differ from financial statements prepared in accordance with U.S. generally accepted accounting principles (GAAP), primarily because on a GAAP basis: (1) certain policy acquisition costs are deferred and amortized, (2) most bond and preferred stock investments are reported at fair value, (3) policy benefit reserves are established using different actuarial methods and assumptions, (4) deposit-type contracts, for which premiums, benefits and reserve changes are not included in revenue or benefits as reported in the Statements of Operations, are defined differently, (5) majority-owned subsidiaries are consolidated, (6) changes in deferred taxes are reported as a component of net income, (7) no deferral of realized investment gains and losses is permitted and (8) “nonadmitted” assets, required for the statutory basis of accounting, are included in total assets. The effects on the Company’s financial statements attributable to the differences between the statutory basis of accounting and GAAP are material.

Reclassifications

Certain amounts in prior year financial statement balances and footnote disclosures have been reclassified to conform to the current year presentation.

2.	Summary of Significant Accounting Policies

The preparation of financial statements in accordance with the statutory basis of accounting requires the Company to make estimates or assumptions about the future that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the annual periods presented. Actual future results could differ from these estimates and assumptions.

Investments

See Notes 3, 4 and 14 regarding the statement value and fair value of the Company’s investments in bonds, mortgage loans, common and preferred stocks, real estate and other investments, including derivative instruments.

Policy Loans

Policy loans represent amounts borrowed from the Company by life insurance and annuity policyowners, secured by the cash value of the related policies and are reported at the unpaid principal balance. Policy loans earn interest at either a fixed rate or at a variable rate based on an election that is made by the policyowner when applying for their policy. If a variable rate is elected, the rate will be reset annually. The Company considers the unpaid principal balance of policy loans to approximate fair value.

NM-9

The Northwestern Mutual Life Insurance Company

Notes to Financial Statements

December 31, 2019, 2018 and 2017

Cash and Short-term Investments

Short-term investments include securities that had maturities of one year or less at purchase, primarily money market funds and short-term commercial paper. These investments are reported at amortized cost, which approximates fair value.

Separate Accounts

Separate account assets and related reserve liabilities represent the segregation of balances attributable to variable life insurance and variable annuity products, as well as a group annuity separate account used to fund certain of the Company’s employee and financial representative benefit plan obligations. All separate account assets are legally insulated from claims by the Company’s general account policyowners and creditors. Variable product policyowners bear the investment performance risk associated with these products. Separate account assets related to variable products are invested at the direction of the policyowner in a variety of mutual fund options. Variable annuity policyowners also have the option to invest in fixed-rate investment options, which are supported by the assets held in the Company’s general account. Separate account assets are generally reported at fair value primarily based on quoted market prices for the underlying investment securities. See Note 7 and Note 14 for more information regarding the Company’s separate accounts and Note 8 for more information regarding the Company’s employee and financial representative benefit plans.

Reserves for Policy Benefits

Reserves for policy benefits generally represent the net present value of future policy benefits less future policy premiums, calculated using actuarial methods, mortality and morbidity experience tables and valuation interest rates prescribed or permitted by the Office of the Commissioner of Insurance of the State of Wisconsin (OCI). These actuarial tables and methods include assumptions regarding future mortality and morbidity experience. Actual future experience could differ from the assumptions used to make these reserve estimates. See Note 5 and Note 14 for more information regarding the Company’s reserves for policy benefits.

Policyowner Dividends

All life and disability insurance policies and certain annuity policies issued by the Company are participating. All long-term care insurance policies issued by NLTC are also participating. Annually, the Company’s Board of Trustees (in its discretion) approves the amount and allocation of dividends among groups of policies issued by the Company, based on management’s recommendation. Dividends are accrued and charged to operations when approved. The liability for policyowner dividends includes the estimated amount of annual dividends and termination dividends. Termination dividends are additional dividends payable upon surrender, maturity or, for policies issued in one state, death. Depending on the type of policy they own, participating policyowners generally have the option to receive their dividends in cash, use them to reduce future premiums due, use them to purchase additional insurance benefits, use them to repay policy loans or leave them on deposit with the Company to accumulate interest. Dividends used by policyowners to purchase additional insurance benefits or pay renewal premiums are reported as premiums in the statements of operations but are not included in premiums received or benefit and dividend payments to policyowners and beneficiaries in the statements of cash flows. The Company’s annual approval and declaration of policyowner dividends includes a guarantee of a minimum aggregate amount of annual dividends to be paid to policyowners as a group in the subsequent calendar year. If this guaranteed amount is greater than the aggregate of annual dividends paid to policyowners in the subsequent year, the difference is paid in the immediately succeeding calendar year. The fact that the Company guarantees a minimum aggregate payment of annual dividends in one year does not obligate the Company to declare a dividend in future years or to guarantee any portion of dividends that may be declared in future years.

NM-10

The Northwestern Mutual Life Insurance Company

Notes to Financial Statements

December 31, 2019, 2018 and 2017

Interest Maintenance Reserve

The Company is required to maintain an interest maintenance reserve (IMR). The IMR is used to defer realized capital gains and losses, net of any income tax, on fixed income investments and derivatives that are attributable to changes in market interest rates, including both changes in risk-free market interest rates and market credit spreads. Net realized capital gains and losses deferred to the IMR are amortized into net investment income over the estimated remaining term to maturity of the investment sold or the asset/liability hedged by an interest rate-related derivative instrument.

Asset Valuation Reserve

The Company is required to maintain an asset valuation reserve (AVR). The AVR represents a reserve for invested asset valuation using a formula prescribed by the NAIC. The AVR is intended to protect surplus by absorbing declines in the value of the Company’s investments that are not related to changes in interest rates. Increases or decreases in the AVR are reported as direct adjustments to surplus in the statements of changes in surplus.

Premium Revenue

Most life insurance premiums are recognized as revenue at the beginning of each respective policy year. Universal life insurance and annuity premiums are recognized as revenue when received. Considerations received on supplementary contracts and income annuities without life contingencies are deposit-type transactions and are excluded from revenue in the statements of operations. Disability and long-term care insurance premiums are recognized as revenue when due. Premium revenue is reported net of ceded reinsurance. See Note 9 for more information regarding the Company’s use of reinsurance.

Net Investment Income

Net investment income primarily represents interest, dividends and prepayment fees received or accrued on bonds, mortgage loans, common and preferred stocks, policy loans and other investments. Net investment income also includes dividends and distributions paid to the Company from the accumulated earnings of joint ventures, partnerships and unconsolidated non-insurance subsidiaries. Net investment income is reduced by investment management expenses, real estate depreciation, interest costs associated with securities lending and repurchase agreements and interest expense related to the Company’s surplus notes. See Note 3 for more information regarding net investment income and repurchase agreements and Note 13 for more information regarding the Company’s surplus notes.

Other Income

Other income primarily represents ceded reinsurance expense allowances and various insurance policy charges. Ceded reinsurance expense allowances are recognized as revenue when due. See Note 9 for more information regarding the Company’s use of reinsurance.

Benefit Payments to Policyowners and Beneficiaries

Benefit payments to policyowners and beneficiaries include death, surrender, maturity, disability and long-term care benefits, as well as payments on supplementary contracts and income annuities that include life contingencies. Benefit payments on supplementary contracts and income annuities without life contingencies are deposit-type transactions and are excluded from benefits in the statements of operations. Benefit payments are reported net of ceded reinsurance recoveries. See Note 9 for more information regarding the Company’s use of reinsurance.

Commissions and Operating Expenses

Commissions and other operating expenses, including costs of acquiring new insurance policies, are generally charged to expense as incurred.

NM-11

The Northwestern Mutual Life Insurance Company

Notes to Financial Statements

December 31, 2019, 2018 and 2017

Federal Income Taxes

Current federal income taxes are charged or credited to operations based upon amounts estimated to be payable or recoverable as a result of taxable operations for the current year and any adjustments to such estimates from prior years. Deferred tax assets and liabilities represent the future tax recoveries or obligations associated with the accumulation of temporary differences between the tax and financial statement bases of the Company’s assets and liabilities. Changes in deferred tax assets and liabilities related to unrealized capital gains and losses on investments are included in changes in net unrealized capital gains and losses in the statements of changes in surplus. Other net changes in deferred tax assets and liabilities are reported as direct adjustments to surplus in the statements of changes in surplus.

The statutory basis of accounting limits the amount of gross deferred tax assets that can be admitted to surplus to those for which ultimate recoverability can be demonstrated. This limit is based on a calculation that considers available tax loss carryback and carryforward capacity, the expected timing of reversal for accumulated temporary differences, gross deferred tax liabilities and the level of Company surplus.

A “more likely than not” standard is applied for financial statement recognition of contingent tax liabilities, whereby a liability is recorded only if the Company believes that there is a greater than 50% likelihood that the related tax position will not be sustained upon examination. In cases where liability recognition is appropriate, a best estimate of the ultimate tax liability is made. If this estimate represents 50% or less of the total amount of the tax contingency, the best estimate is established as a liability. If this best estimate represents more than 50% of the total tax contingency, the total amount is established as a liability. Changes in contingent tax liabilities are included in income tax benefit in the year that such determination is made by the Company. The Company reports interest accrued or released related to contingent tax liabilities in current income tax benefit.

See Note 10 for more information on the Company’s income taxes.

Information Technology Equipment and Software

The cost of information technology (IT) equipment and operating system software is generally capitalized and depreciated over three years using the straight-line method. Non-operating system software is generally capitalized and depreciated over a maximum of five years using the straight-line method. IT equipment and operating software assets of $31 million and $56 million at December 31, 2019 and 2018, respectively, are included in other assets in the Statements of Financial Position and are net of accumulated depreciation of $428 million and $394 million, respectively. Non-operating software costs, net of accumulated depreciation, are nonadmitted assets and thereby excluded from assets and surplus in the statements of financial position. These amounts were $357 million and $305 million at December 31, 2019 and 2018, respectively. Depreciation expense for IT equipment and software totaled $146 million, $134 million and $115 million for the years ended December 31, 2019, 2018 and 2017, respectively.

Furniture, Fixtures and Equipment

The cost of furniture, fixtures and equipment, including leasehold improvements, is generally capitalized and depreciated over the useful life of the assets using the straight-line method. Furniture, fixtures and equipment, net of accumulated depreciation, are nonadmitted assets and thereby excluded from assets and surplus in the statements of financial position. These amounts were $130 million and $145 million at December 31, 2019 and 2018, respectively. Depreciation expense for furniture, fixtures and equipment totaled $16 million, $16 million and $12 million for the years ended December 31, 2019, 2018 and 2017, respectively.

Corporate Owned Life Insurance

Through a wholly-owned subsidiary, the Company indirectly holds corporate-owned life insurance (“COLI”) to provide protection against key-person risk for certain qualified employees and to help fund certain future employee benefit expenses. See Note 3 for more information regarding COLI.

NM-12

The Northwestern Mutual Life Insurance Company

Notes to Financial Statements

December 31, 2019, 2018 and 2017

Nonadmitted Assets

Certain assets are designated as nonadmitted on the statutory basis of accounting. Such assets, principally related to defined benefit pension funding, amounts advanced to or due from the Company’s financial representatives, furniture, fixtures, equipment and non-operating software (net of accumulated depreciation), derivatives, and certain equity-method investments for which audits are not performed are excluded from assets and surplus in the statements of financial position. Changes in nonadmitted assets are reported as a direct adjustment to surplus in the statements of changes in surplus.

Foreign Currency Translation

All of the Company’s insurance operations are conducted in the United States of America on a U.S. dollar-denominated basis. The Company invests in bonds, mortgage loans, equities, and other investments denominated in foreign currencies. Investments denominated in a foreign currency are translated to U.S. dollars at each reporting date using then-current foreign currency exchange rates. Translation gains or losses relating to fluctuations in exchange rates are reported as a change in net unrealized capital gains and losses until the related investment is sold, determined to be other-than-temporarily impaired or matures, at which time a realized capital gain or loss is reported. Transactions denominated in a foreign currency, such as receipt of foreign-denominated interest or dividends, are translated to U.S. dollars based on the actual exchange rate at the time of the transaction. See Note 4 for more information regarding the Company’s use of derivatives to mitigate exposure to fluctuations in foreign currency exchange rates.

Subsequent Events

The Company has evaluated events subsequent to December 31, 2019 through February 14, 2020, the date these financial statements were available to be issued. Based on this evaluation, it is the Company’s opinion that no events subsequent to December 31, 2019 have occurred that are material to the Company’s financial position at that date or the results of its operations for the year then ended.

3.	Investments

Bonds

The Securities Valuation Office (SVO) of the NAIC Investment Analysis Office evaluates the credit quality of the Company’s bond investments and issues related credit ratings. Bonds rated at “1” (highest quality), “2” (high quality), “3” (medium quality), “4” (low quality) or “5” (lower quality) are reported in the financial statements at amortized cost less any other-than-temporary impairment. Bonds rated “6” (lowest quality) are reported at the lower of amortized cost or fair value. SVO-identified exchange-traded fund investments are reported at fair value. The interest method is used to amortize any purchase premium or discount, including estimates of future prepayments that are obtained from independent sources. Prepayment assumptions are updated at least annually, with the retrospective method used to adjust net investment income for changes in the estimated yield to maturity.

The disclosure of fair value for bonds is primarily based on independent pricing services or internally-developed pricing models utilizing observable market data. See Note 14 for more information regarding the fair value of the Company’s investments in bonds.

NM-13

The Northwestern Mutual Life Insurance Company

Notes to Financial Statements

December 31, 2019, 2018 and 2017

Statement value and fair value of bonds at December 31, 2019 and 2018, summarized by asset categories required in the NAIC Annual Statement, were as follows:


December 31, 2019	Reconciliation to Fair Value

			Gross		Gross
	Statement		Unrealized		Unrealized			Fair
	Value		Gains		Losses			Value
	(in millions)
U.S. Government	$	2,701	$	158	$	(5	)	$	2,854
States, territories and possessions		742		139		(1	)		880
Special revenue and assessments		26,310		887		(48	)		27,149
All foreign governments		4,531		350		(23	)		4,858
Hybrid securities		473		28		(22	)		479
SVO-identified funds		3		-		-			3
Industrial and miscellaneous		125,000		7,864		(358	)		132,506


Total bonds	$	159,760	$	9,426	$	(457	)	$	168,729


December 31, 2018	Reconciliation to Fair Value

			Gross		Gross
	Statement		Unrealized		Unrealized			Fair
	Value		Gains		Losses			Value
	(in millions)
U.S. Government	$	4,747	$	200	$	(15	)	$	4,932
States, territories and possessions		648		88		(2	)		734
Special revenue and assessments		33,671		420		(788	)		33,303
All foreign governments		2,011		10		(77	)		1,944
Hybrid securities		540		16		(32	)		524
SVO-identified funds		117		-		-			117
Industrial and miscellaneous		111,979		1,380		(3,348	)		110,011


Total bonds	$	153,713	$	2,114	$	(4,262	)	$	151,565

Bonds classified by the NAIC as special revenue and assessments primarily consist of U.S. Government agency-issued residential mortgage-backed securities and municipal bonds issued by political subdivisions to finance specific public projects. Bonds classified as industrial and miscellaneous consist primarily of notes issued by public and private corporate entities and structured securities not issued by U.S. Government agencies.

NM-14

The Northwestern Mutual Life Insurance Company

Notes to Financial Statements

December 31, 2019, 2018 and 2017

Statement value of bonds by SVO rating category at December 31, 2019 and 2018 was as follows:


December 31, 2019	SVO Rating

	1		2		3		4		5		6		Total

	(in millions)

U.S. Government	$	2,701	$	-	$	-	$	-	$	-	$	-	$	2,701

States, territories and possessions		664		78		-		-		-		-		742

Special revenue and assessments		26,159		119		32		-		-		-		26,310

All foreign governments		1,472		2,903		65		40		51		-		4,531

Hybrid securities		-		270		173		30		-		-		473

SVO-identified funds		-		-		-		3		-		-		3

Industrial and miscellaneous		60,420		49,654		6,809		5,014		3,049		54		125,000


Total bonds	$	91,416	$	53,024	$	7,079	$	5,087	$	3,100	$	54	$	159,760


December 31, 2018	SVO Rating

	1		2		3		4		5		6		Total

	(in millions)

U.S. Government	$	4,747	$	-	$	-	$	-	$	-	$	-	$	4,747

States, territories and possessions		596		52		-		-		-		-		648

Special revenue and assessments		33,550		121		-		-		-		-		33,671

All foreign governments		641		1,168		166		36		-		-		2,011

Hybrid securities		-		314		191		35		-		-		540

SVO-identified funds		-		-		-		117		-		-		117

Industrial and miscellaneous		52,858		45,684		5,826		4,934		2,645		32		111,979


Total bonds	$	92,392	$	47,339	$	6,183	$	5,122	$	2,645	$	32	$	153,713

Based on statement value, 90% and 91% of the Company’s bond portfolio was rated investment grade (i.e., rated 1 or 2 by the SVO) at December 31, 2019 and 2018, respectively.

The Company’s bond investments include structured securities which include a significant concentration in residential mortgage-backed securities issued by U.S. Government agencies. Statement value and fair value of structured securities at December 31, 2019 and 2018, aggregated by investment grade or below investment grade (i.e., rated 3, 4, 5 or 6 by the SVO), were as follows:


December 31, 2019	Investment Grade				Below Investment Grade				Total
	Statement Value		Fair Value		Statement Value		Fair Value		Statement Value		Fair Value
	(in millions)
Residential mortgage-backed:
U.S. Government agencies	$	24,486	$	24,947	$	-	$	-	$	24,486	$	24,947
Other prime		709		719		1		1		710		720
Other below-prime		357		362		2		3		359		365
Commercial mortgage-backed:
U.S. Government agencies		64		66		-		-		64		66
Conduit		3,008		3,077		-		-		3,008		3,077
Other commercial mortgage-backed		2		2		-		-		2		2
Other asset-backed		8,420		8,574		98		107		8,518		8,681


Total structured securities	$	37,046	$	37,747	$	101	$	111	$	37,147	$	37,858

NM-15

The Northwestern Mutual Life Insurance Company

Notes to Financial Statements

December 31, 2019, 2018 and 2017


December 31, 2018	Investment Grade				Below Investment Grade					Total
	Statement Value		Fair Value		Statement Value			Fair Value		Statement Value		Fair Value
							(in millions)
Residential mortgage-backed:
U.S. Government agencies	$	31,654	$	31,025	$	-		$	-	$	31,654	$	31,025
Other prime		602		597		1			1		603		598
Other below-prime		401		396		3			3		404		399
Commercial mortgage-backed:
U.S. Government agencies		133		134		-			-		133		134
Conduit		1,972		1,945		-			1		1,972		1,946
Other commercial mortgage-backed		15		16		-			-		15		16
Other asset-backed		7,687		7,655		52			57		7,739		7,712

Total structured securities	$	42,464	$	41,768	$	56		$	62	$	42,520	$	41,830

Based on statement value, over 99% of the Company’s structured securities portfolio was rated as investment grade at each of December 31, 2019 and 2018.

Statement value and fair value of bonds and short-term investments by contractual maturity at December 31, 2019 are summarized below. Actual maturities may differ from contractual maturities because certain borrowers have the right to call or prepay obligations with or without call or prepayment fees.


	Statement		Fair
	Value		Value
	(in millions)

Due in one year or less	$	4,338	$	4,362

Due after one year through five years		37,653		38,705

Due after five years through ten years		46,633		48,884

Due after ten years		72,735		78,377


Total	$	161,359	$	170,328

Mortgage Loans

Mortgage loans consist solely of commercial mortgage loans underwritten and originated by the Company and are reported at the unpaid principal balance, less any valuation adjustments or unamortized commitment or origination fees. Such fees are generally deferred upon receipt and amortized into net investment income over the life of the loan using the interest method. Affiliated mortgage loan investments were $163 million and $137 million at December 31, 2019 and 2018, respectively.

NM-16

The Northwestern Mutual Life Insurance Company

Notes to Financial Statements

December 31, 2019, 2018 and 2017

The statement value of mortgage loans by collateral property type and geographic location at December 31, 2019 and 2018 was as follows:


December 31, 2019	United States of America

	East		Midwest		South		West		Foreign		Total
	(in millions)

Apartment	$	5,434	$	1,915	$	2,912	$	7,411	$	-	$	17,672

Office		3,617		897		1,293		3,263		-		9,070

Retail		2,593		535		1,670		2,052		-		6,850

Warehouse/Industrial		677		447		672		1,179		196		3,171

Manufactured housing		254		321		1,189		893		-		2,657

Other		126		59		28		138		-		351


Total	$	12,701	$	4,174	$	7,764	$	14,936	$	196	$	39,771


December 31, 2018	United States of America

	East		Midwest		South		West		Foreign		Total
	(in millions)

Apartment	$	4,621	$	1,620	$	2,418	$	6,290	$	-	$	14,949

Office		3,640		921		1,242		3,399		-		9,202

Retail		2,709		550		2,000		2,229		-		7,488

Warehouse/Industrial		539		372		635		1,155		171		2,872

Manufactured housing		234		235		719		697		-		1,885

Other		140		52		30		137		-		359


Total	$	11,883	$	3,750	$	7,044	$	13,907	$	171	$	36,755

The Company has mortgage loans where co-lending or participation arrangements are in place with unaffiliated third parties. Mortgage loans with co-lending or participation arrangements totaled $3.5 billion and $3.6 billion at December 31, 2019 and 2018, respectively.

All mortgage loans were current on contractual interest and principal payments at each of December 31, 2019 and 2018. Interest rates and loan-to-value (LTV) ratio information for the Company’s mortgage loans originated or refinanced during 2019 and 2018 is summarized below.


	2019			2018

Minimum interest rate		2.95	%		3.19	%

Maximum interest rate		11.75	%		7.50	%

Weighted-average LTV		57	%		56	%

Maximum LTV		74	%		87	%

NM-17

The Northwestern Mutual Life Insurance Company

Notes to Financial Statements

December 31, 2019, 2018 and 2017

LTV ratios are commonly used to assess the credit quality of commercial mortgage loans. A lower LTV ratio generally indicates a higher quality loan. At December 31, 2019 and 2018, the aggregate weighted-average LTV ratio for the mortgage loan portfolio was 52% and 51%, respectively. The statement value of mortgage loans by collateral property type and LTV ratio at December 31, 2019 and 2018 was as follows:


December 31, 2019	< 51%		51%-70%		71%-90%		> 90%		Total

	(in millions)

Apartment	$	5,628	$	11,877	$	167	$	-	$	17,672

Office		5,977		2,704		318		71		9,070

Retail		3,179		3,370		258		43		6,850

Warehouse/Industrial		1,699		1,187		216		69		3,171

Manufactured housing		419		2,238		-		-		2,657

Other		222		54		59		16		351


Total	$	17,124	$	21,430	$	1,018	$	199	$	39,771


December 31, 2018	< 51%		51%-70%		71%-90%		> 90%		Total

	(in millions)

Apartment	$	4,963	$	9,862	$	124	$	-	$	14,949

Office		5,714		3,115		171		202		9,202

Retail		3,997		3,365		126		-		7,488

Warehouse/Industrial		1,313		1,318		241		-		2,872

Manufactured housing		639		898		348		-		1,885

Other		223		113		-		23		359


Total	$	16,849	$	18,671	$	1,010	$	225	$	36,755

The aggregate statement value of mortgage loans with an LTV ratio in excess of 100% was $45 million at December 31, 2019. At December 31, 2018, the Company had no mortgage loans with an LTV ratio in excess of 100%.

The fair value of the collateral securing each commercial mortgage loan is updated at least annually by the Company. More frequent updates are performed if deemed necessary due to changes in market capitalization rates, borrower financial strength and/or property operating performance. Fair value of the collateral is estimated using the income capitalization approach based on stabilized property income and market capitalization rates. Stabilized property income is derived from actual property financial statements adjusted for non-recurring items, normalized market vacancy and lease rollover, among other factors. Other collateral, such as excess land and additional capital required to maintain property income, is also factored into fair value estimates. Both private market transactions and public market alternatives are considered in determining appropriate market capitalization rates. See Note 14 for more information regarding the fair value of the Company’s investments in mortgage loans.

In the normal course of business, the Company may refinance or otherwise modify the terms of an existing mortgage loan, typically in reaction to a request by the borrower. These modifications can include a partial repayment of outstanding loan principal, changes to interest rates, extensions of loan maturity and/or changes to loan covenants. When such modifications are made, the statutory basis of accounting requires that the new terms of the loan be evaluated to determine whether the modification qualifies as a “troubled debt restructuring.” If new terms are extended to a borrower that are less favorable to the Company than those currently being offered to new borrowers under similar circumstances in an arms-length transaction, a realized capital loss is reported for the estimated amount of the economic concessions made and the reported value of the mortgage loan is reduced. The Company recognized no capital losses related to

NM-18

The Northwestern Mutual Life Insurance Company

Notes to Financial Statements

December 31, 2019, 2018 and 2017

troubled debt restructuring of mortgage loans for the years ended December 31, 2019, 2018 and 2017, respectively. The Company had no mortgage loans at December 31, 2019 that were considered “restructured.” At December 31, 2018, the Company had $21 million of principal outstanding on mortgage loans that were considered “restructured.”

In circumstances where the Company has deemed it probable that it will be unable to collect all contractual principal and interest on a mortgage loan, a valuation allowance is established to reduce the statement value of the mortgage loan to its net realizable value. Changes to mortgage loan valuation allowances are reported as a change in net unrealized capital gains and losses in the statements of changes in surplus. If the Company later determines that the decline in value is other-than-temporary, a realized capital loss is reported, and any temporary valuation allowance is reversed. The Company had no mortgage loan valuation allowance at December 31, 2019 or 2018.

Common and Preferred Stocks

Common stocks are generally reported at fair value, with $4,474 million and $5,366 million included in the statements of financial position at December 31, 2019 and 2018, respectively. The fair value for publicly-traded common stocks is primarily based on quoted market prices. For private common stocks without quoted market prices, fair value is primarily determined using a sponsor valuation or market comparables approach. The equity method is generally used to report investments in common stock of unconsolidated subsidiaries.

Preferred stocks rated 1, 2 or 3 by the SVO are reported at amortized cost. Preferred stocks rated 4, 5 or 6 by the SVO are reported at the lower of amortized cost or fair value. At December 31, 2019 and 2018, the statements of financial position included $203 million and $208 million, respectively, of preferred stocks. The fair value for preferred stocks is primarily determined using a sponsor valuation or market comparables approach.

See Note 14 for more information regarding the fair value of the Company’s investments in common and preferred stock.

Real Estate

Real estate investments are reported at cost, less any encumbrances and accumulated depreciation of buildings and other improvements. Depreciation of real estate investments is recorded using a straight-line method over the estimated useful lives of the improvements. Fair value of real estate is estimated primarily based on the capitalization of stabilized net operating income.

The statement value of real estate investments by property type and U.S. geographic location at December 31, 2019 and 2018 was as follows:


December 31, 2019	East		Midwest		South		West		Total

	(in millions)

Apartment	$	277	$	195	$	178	$	718	$	1,368

Office		214		676		128		17		1,035

Warehouse/Industrial		118		-		38		205		361

Other		16		54		13		25		108

Total	$	625	$	925	$	357	$	965	$	2,872

NM-19

The Northwestern Mutual Life Insurance Company

Notes to Financial Statements

December 31, 2019, 2018 and 2017


December 31, 2018	East		Midwest		South		West		Total
	(in millions)
Apartment	$	285	$	201	$	218	$	526	$	1,230

Office		-		693		131		18		842

Warehouse/Industrial		160		-		40		188		388

Other		28		48		13		27		116


Total	$	473	$	942	$	402	$	759	$	2,576

The Company’s home office properties are included above (Office/Midwest) and had an aggregate statement value of $676 million and $687 million at December 31, 2019 and 2018, respectively. The Company’s other investments in real estate are held for the production of income.

Other Investments

Other investments primarily represent investments that are made through ownership interests in partnerships, joint ventures (JVs) and limited liability companies (LLCs). In some cases, these ownership interests are held directly by the Company, while in other cases these investments are held indirectly through wholly-owned non-insurance investment holding companies organized as LLCs. Whether held directly by the Company or indirectly through its investment holding companies, securities or real estate partnerships, JVs, and LLCs are reported in the statements of financial position using the equity method of accounting based on the Company’s share of the underlying entities’ audited GAAP-basis equity.

The statement value of other investments held directly or indirectly by the Company at December 31, 2019 and 2018 was as follows:


	December 31,
	2019		2018
	(in millions)

Securities partnerships and LLCs	$	7,581	$	6,839

Bonds		3,571		3,196

Real estate JVs, partnerships and LLCs		2,697		2,115

Common and preferred stocks		2,030		1,253

Corporate-owned life insurance		1,043		-

Real estate		1,023		806

Structured settlements		800		527

Low income housing tax credit properties		662		598

Derivative instruments		546		695

Cash and short-term investments		444		392

Lease receivables		274		253

Other, net		291		374


Total	$	20,962	$	17,048

For securities partnerships and LLCs, bonds, common and preferred stocks, COLI, cash and short-term investments and derivative instruments, the underlying entity generally reports these investments at fair value. For real estate related investments (including JVs, partnerships and LLCs), structured settlements, tax credit properties and lease receivables, the underlying entity generally reports these investments at cost, reduced where appropriate by depreciation or amortization. Tax credit properties had 13 years of unexpired credits at December 31, 2019 and 2018, respectively. The required holding period for tax credit properties is 15 years. The amount of tax credits and other tax benefits recognized during 2019 and 2018 were $123 million and $119 million, respectively. See Note 10 for more information regarding the Company’s use of tax credits.

NM-20

The Northwestern Mutual Life Insurance Company

Notes to Financial Statements

December 31, 2019, 2018 and 2017

See Note 4 for more information regarding the Company’s use of derivatives.

Investments in Subsidiaries, Controlled and Affiliated Entities

The Company’s investments in subsidiaries, controlled and affiliated entities (SCAs) are reported in the statements of financial position using the equity method of accounting based on the Company’s share of the underlying entities’ audited GAAP-basis equity. At December 31, 2019 and 2018, the value of wholly-owned SCA investments were as follows:


	December 31, 2019						December 31, 2018

	Investment in SCA		Nonadmitted Asset		Statement Value		Investment in SCA		Nonadmitted Asset		Statement Value

			(in millions)						(in millions)

NM Wealth Management Company	$	237	$	-	$	237	$	172	$	-	$	172


Bradford, Inc.		-		-		-		1		1		-

Total common stock SCAs ¹		237		-		237		173		1		172

NML Securities Holdings, LLC		8,485		-		8,485		5,714		-		5,714

NML Real Estate Holdings, LLC		2,404		-		2,404		1,803		-		1,803

NM Investment Holdings, LLC		1,334		-		1,334		1,286		-		1,286

NM Pebble Valley, LLC		128		-		128		204		-		204

NM Investment Services, LLC		124		-		124		110		-		110

NM GP Holdings, LLC		62		13		49		59		3		56

Northwestern Mutual Investment Management Company, LLC		44		44		-		42		42		-

Mason Street Advisors, LLC		36		36		-		35		35		-

NM QOZ FUND, LLC		16		-		16		16		9		7

NM-SAS, LLC		4		-		4		4		-		4

NM Career Distribution Holdings, LLC		4		4		-		2		2		-

GRO-SUB, LLC		1		1		-		1		1		-

GRO, LLC		1		1		-		1		1		-

Total other investment SCAs ²		12,643		99		12,544		9,277		93		9,184


Total investments in SCAs	$	12,880	$	99	$	12,781	$	9,450	$	94	$	9,356

¹	Reported in common and preferred stocks in the statements of financial position.

²	Reported in other investments in the statements of financial position.

Investment filings for all common stock SCAs were submitted to the NAIC during 2019. In all cases, the NAIC accepted the statement value.

NM-21

The Northwestern Mutual Life Insurance Company

Notes to Financial Statements

December 31, 2019, 2018 and 2017

Net Investment Income

The sources of net investment income for the years ended December 31, 2019, 2018 and 2017 were as follows:


	For the years ended December 31,

	2019		2018		2017

			(in millions)

Bonds	$	6,400	$	6,020	$	5,738

Mortgage loans		1,676		1,573		1,590

Common and preferred stocks		146		210		118

Real estate		288		275		276

Other investments		1,205		1,184		1,216

Policy loans		1,180		1,164		1,149

Amortization of IMR		133		135		162


Gross investment income		11,028		10,561		10,249

Less: investment expenses		879		770		708


Net investment income	$	10,149	$	9,791	$	9,541

For the years ended December 31, 2019 and 2018, bond investment income included $72 million and $42 million of prepayment fees, respectively, generated as a result of 108 and 83 securities, respectively, sold, disposed, or otherwise redeemed as a result of a callable feature. Accrued investment income more than ninety days past due is a nonadmitted asset. Changes in the nonadmitted amount are reported as direct adjustments to surplus in the statements of changes in surplus. Accrued investment income that is ultimately deemed uncollectible is included as a reduction of net investment income in the period that such determination is made.

Realized Capital Gains and Losses

Realized capital gains and losses are recognized based upon specific identification of investments sold. Realized capital losses also include valuation adjustments for impairment of bonds, mortgage loans, common and preferred stocks, real estate and other investments that have experienced a decline in fair value that the Company considers to be other-than-temporary. Realized capital gains and losses, as reported in the statements of operations, are net of any capital gains tax (or benefit) and exclude any deferrals to the IMR of interest rate-related capital gains or losses.

NM-22

The Northwestern Mutual Life Insurance Company

Notes to Financial Statements

December 31, 2019, 2018 and 2017

Realized capital gains and losses for the years ended December 31, 2019, 2018 and 2017 were as follows:


	For the year ended								For the year ended								For the year ended

	December 31, 2019								December 31, 2018								December 31, 2017

						Net								Net								Net

						Realized								Realized								Realized

	Realized		Realized			Gains			Realized		Realized			Gains			Realized		Realized			Gains

	Gains		Losses			(Losses)			Gains		Losses			(Losses)			Gains		Losses			(Losses)

			(in millions)								(in millions)								(in millions)

Bonds	$	1,094	$	(369)		$	725		$	275	$	(543	)	$	(268	)	$	755	$	(543	)	$	212
Mortgage loans		8		(3	)		5			-		(2	)		(2	)		2		(5	)		(3	)
Common and preferred stocks		662		(291	)		371			538		(147	)		391			363		(29	)		334
Real estate		502		(6	)		496			12		(13	)		(1	)		101		-			101
Other investments		1,005		(1,053	)		(48	)		699		(952	)		(253	)		692		(786	)		(94	)


Subtotal	$	3,271	$	(1,722	)		1,549		$	1,524	$	(1,657	)		(133	)	$	1,913	$	(1,363	)		550


Less: IMR net gains (losses) before taxes							674								(245	)							389
Less: Capital gains tax expense (benefit)							173								88								68


Net realized capital gains (losses)						$	702							$	24							$	93

Realized capital gains and losses are generally the result of normal investment trading activity. Proceeds from the sale of bonds totaled $30 billion, $22 billion, and $31 billion for the years ended December 31, 2019, 2018 and 2017, respectively.

On a quarterly basis, the Company performs a review of bonds, mortgage loans, common and preferred stocks, real estate and other investments to identify investments that have experienced a decline in fair value that is considered to be other-than-temporary. Factors considered include the duration and extent to which fair value was less than cost, the financial condition and near-term financial prospects of the issuer and the Company’s ability and intent to hold the investment for a period of time sufficient to allow for an anticipated recovery in value. If the decline in an investment’s fair value is considered to be other-than-temporary, the statement value of the investment is generally written down to fair value and a realized capital loss is reported.

For fixed income investments, the review focuses on the issuer’s ability to remit all contractual interest and principal payments and the Company’s ability and intent to hold the investment until the earlier of a recovery in value or maturity. The Company’s intent and ability to hold an investment takes into consideration broad portfolio management parameters such as expected net cash flows and liquidity targets, asset/liability duration management and issuer and industry sector credit exposures. Mortgage loans considered to have experienced an other-than-temporary decline in value are written down to net realizable value based on the appraised value of the collateral property.

For equity securities, greater weight and consideration is given to the duration and extent of the decline in fair value and the likelihood that the fair value of the security will recover in the foreseeable future. A real estate equity investment is evaluated for an other-than-temporary impairment when the fair value of the property is lower than its depreciated cost.

For real estate and other investments that represent ownership interests in partnerships, JVs and LLCs, the review focuses on the likelihood that the Company will ultimately recover its initial investment, adjusted for its share of subsequent net earnings and/or distributions. The Company’s review of securities

NM-23

The Northwestern Mutual Life Insurance Company

Notes to Financial Statements

December 31, 2019, 2018 and 2017

partnerships will generally defer to GAAP-basis impairment reviews performed by the general partner absent compelling evidence of a permanent impairment of the Company’s partnership interest.

Realized capital losses related to declines in fair value of investments that were considered to be other-than-temporary for the years ended December 31, 2019, 2018 and 2017 were as follows:


	For the years ended December 31,
	2019			2018			2017
Bonds, common and preferred stocks:				(in millions)

Structured securities	$	(1	)	$	(1)		$	(1	)
Financial services		-			(1	)		(1	)
Consumer discretionary		(84	)		-			(63	)
Industrials		(9	)		(35	)		(53	)
Energy		(44	)		(2	)		(39	)
Basic materials		(1	)		-			(7	)


Subtotal		(139	)		(39	)		(164	)

Real estate		(6	)		(13	)		-

Other investments:
Real estate JVs		-			-			(27	)
Securities partnerships		(78	)		(44	)		(53	)
Energy and transportation		-			(22	)		-


Subtotal		(78	)		(66	)		(80	)


Total	$	(223	)	$	(118	)	$	(244	)

In addition to the realized capital losses above, $0.2 million, $22 million and $30 million of other-than-temporary impairments were recorded by the Company’s unconsolidated non-insurance subsidiaries for the years ended December 31, 2019, 2018 and 2017, respectively. The decline in the Company’s equity in these subsidiaries resulting from these impairments is reported in changes in net unrealized capital gains and losses in the statements of changes in surplus.

Unrealized Capital Gains and Losses

Unrealized capital gains and losses include changes in the fair value of common and some preferred stocks, other investments and currency translation adjustments on foreign-denominated bonds and mortgage loans and are reported net of any related changes in deferred taxes in the statements of changes in surplus. Changes in the Company’s equity-method share of the undistributed earnings of partnerships, JVs, LLCs and unconsolidated subsidiaries are also reported as changes in unrealized capital gains and losses. If net earnings are distributed to the Company in the form of dividends, net investment income is recognized in the amount of the distribution and the previously unrealized net capital gains are reversed.

NM-24

The Northwestern Mutual Life Insurance Company

Notes to Financial Statements

December 31, 2019, 2018 and 2017

Changes in net unrealized capital gains and losses for the years ended December 31, 2019, 2018 and 2017 were as follows:


	For the years ended December 31,

	2019			2018			2017
	(in millions)

Bonds	$	152		$	(376	)	$	564

Mortgage loans		11			(10	)		13

Common and preferred stocks		304			(653	)		529

Other investments		727			833			(230	)



Subtotal		1,194			(206	)		876



Change in deferred taxes		(53	)		80			(54	)



Change in net unrealized capital gains and losses	$	1,141		$	(126	)	$	822

Changes in net unrealized capital gains and losses for the years ended December 31, 2019, 2018 and 2017 included the reversal of previously unrealized capital gains of $(369) million, $(602) million and $(489) million, respectively, related to distributions of accumulated net earnings made to the Company from unconsolidated non-insurance subsidiaries.

The amortized cost and fair value of bonds and common and preferred stocks for which fair value declined and remained below cost at December 31, 2019 and 2018 were as follows:


	December 31, 2019

	Decline For Less Than 12 Months							Decline For Greater Than 12 Months

	Amortized Cost		Fair Value		Difference			Amortized Cost		Fair Value		Difference

	(in millions)

Bonds	$	11,128	$	10,947	$	(181	)	$	9,657	$	9,139	$	(518	)

Common and preferred stocks		495		430		(65	)		374		307		(67	)


Total	$	11,623	$	11,377	$	(246	)	$	10,031	$	9,446	$	(585	)


	December 31, 2018

	Decline For Less Than 12 Months							Decline For Greater Than 12 Months

	Amortized Cost		Fair Value		Difference			Amortized Cost		Fair Value		Difference
	(in millions)

Bonds	$	53,896	$	51,789	$	(2,107)		$	56,888	$	54,284	$	(2,604	)

Common and preferred stocks		2,609		2,267		(342	)		265		192		(73	)


Total	$	56,505	$	54,056	$	(2,449	)	$	57,153	$	54,476	$	(2,677	)

All of these bonds were current on contractual interest and principal payments at December 31, 2019. Based on the results of the impairment review process described above, the Company considers these declines in fair value to be temporary based on current facts and circumstances.

NM-25

The Northwestern Mutual Life Insurance Company

Notes to Financial Statements

December 31, 2019, 2018 and 2017

At December 31, 2019 and 2018, unrealized capital losses on structured securities in a loss position for greater than 12 months were $32 million and $856 million, respectively, while unrealized capital losses on structured securities in a loss position for less than 12 months were $34 million and $60 million, respectively.

For securities without a full SVO credit analysis performed, the statutory basis of accounting allows the Company to assign a NAIC designation of 5* to such securities for reporting purposes. At December 31, 2019 and 2018, the statement and fair values of NAIC 5* securities were as follows:


	December 31,

	2019						2018

	Number of Securities		Statement Value		Fair Value		Number of Securities		Statement Value		Fair Value
	($ in millions)

Bonds		59	$	1,471	$	1,412		60	$	1,587	$	1,519
Loan-backed and structured securities		5		57		66		3		—		—
Preferred stock		5		79		83		7		74		80

Total		69	$	1,607	$	1,561		70	$	1,661	$	1,599

Repurchase Agreements

The Company participates in a bilateral repurchase program with U.S. domiciled unaffiliated third parties. The agreements under this program require the Company to sell securities and simultaneously agree to repurchase the same (or substantially the same) securities prior to the securities reaching their maturity. These repurchase agreements are intended to enhance the yield of the Company’s investment portfolio. The agreements are accounted for as collateralized borrowings with the transferred security proceeds recorded as other liabilities in the statements of financial position while the underlying securities continue to be recorded as investments by the Company. Investment earnings are recorded as net investment income and the difference between the transferred security proceeds and the amount at which the securities will be subsequently reacquired is amortized into net investment income as interest expense in the statements of operations.

The Company manages counterparty and other risks associated with its repurchase program by adhering to guidelines that require counterparties to provide the Company with cash or other high-quality collateral of no less than 98% of the fair value of the securities on loan plus accrued interest and by setting conservative standards for the Company’s reinvestment of cash collateral received. At December 31, 2019 and 2018, the liability to return the repurchase agreement cash collateral was $1.7 billion and $1.8 billion, respectively, and is reported as other liabilities in the statements of financial position.

During 2019 and 2018, cash collateral received, and the corresponding liability to return that collateral, had the following characteristics:


For the quarter ended:	Maximum Balance		Ending Balance
	(in millions)
March 31, 2019	$	1,867	$	1,771
June 30, 2019	$	1,798	$	1,797
September 30, 2019	$	1,833	$	1,410
December 31, 2019	$	1,718	$	1,711
March 31, 2018	$	485	$	485
June 30, 2018	$	1,514	$	1,449
September 30, 2018	$	1,519	$	1,435
December 31, 2018	$	1,763	$	1,763

NM-26

The Northwestern Mutual Life Insurance Company

Notes to Financial Statements

December 31, 2019, 2018 and 2017

During 2019 and 2018, securities sold under repurchase agreements included the following characteristics:


For the quarter ended:	Maximum Balance (Fair Value)		Ending Balance (Fair Value)		Ending Balance (Statement Value)
	(in millions)
March 31, 2019	$	1,902	$	1,799	$	1,697
June 30, 2019	$	1,835	$	1,821	$	1,697
September 30, 2019	$	1,872	$	1,434	$	1,299
December 31, 2019	$	1,754	$	1,730	$	1,600
March 31, 2018	$	485	$	492	$	498
June 30, 2018	$	1,514	$	1,468	$	1,396
September 30, 2018	$	1,519	$	1,456	$	1,397
December 31, 2018	$	1,763	$	1,787	$	1,696

The repurchase agreements have overnight contractual maturities. Securities sold under the repurchase agreements were all U.S. Treasury securities with a NAIC rating of 1.

The amortized cost, fair value and remaining term to maturity of reinvested repurchase agreement collateral held by the Company at December 31, 2019 and 2018 was as follows:


	December 31, 2019				December 31, 2018
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
	(in millions)				(in millions)
30 days or less	$	700	$	700	$	579	$	579
31-60 days		9		9		215		215
61-90 days		30		30		199		199
91-120 days		60		60		73		73
121-180 days		117		118		355		355
181-365 days		258		258		46		46
1-2 years		486		486		253		252
2-3 years		45		45		-		-
Over 3 years		9		9		35		34

Total	$	1,714	$	1,715	$	1,755	$	1,753

If the securities sold under the repurchase agreements or the reinvested collateral become less liquid, the Company has the liquidity resources within its general account available to meet any potential cash demands when securities are required to be repurchased.

Restricted Assets

Certain of the Company’s investments are either pledged as collateral or are otherwise held beyond the exclusive control of the Company (“restricted assets”). These restrictions are generally the result of collateral support agreements with counterparties in connection with repurchase agreements and derivative transactions.

At December 31, 2019 and 2018, collateral held by counterparties was primarily in the form of cash, short-term investments and bonds, including U.S. Government securities. See Note 4 for more information regarding the Company’s derivative portfolio.

NM-27

The Northwestern Mutual Life Insurance Company

Notes to Financial Statements

December 31, 2019, 2018 and 2017

The statement value of restricted assets at December 31, 2019 and 2018, summarized by type of restriction, was as follows:


	December 31,
	2019		2018
	(in millions)
Loaned securities - repurchase agreements	$	1,600	$	1,696
Derivative transactions		67		48
Securities on deposit with states		4		4

Total restricted assets	$	1,671	$	1,748

Collateral Assets Received

The statement and fair values of collateral received at December 31, 2019 and 2018 were as follows:


	December 31, 2019				December 31, 2018

	Statement Value		Fair Value		Statement Value		Fair Value
	(in millions)
Repurchase agreement collateral	$	1,711	$	1,711	$	1,763	$	1,763
Derivative collateral		642		642		510		510
Mortgage loan escrow		59		59		58		58
Real estate escrow and security deposits		5		5		6		6


Total collateral assets	$	2,417	$	2,417	$	2,337	$	2,337

At December 31, 2019 and 2018, derivative collateral received included less than $1 million related to separate accounts and the obligation to return this collateral is reported in separate account liabilities in the statements of financial position. The obligation to return all other collateral received is reported as other liabilities in the statements of financial position.

4.	Derivative Financial Instruments

The Company enters into derivative transactions, generally to mitigate the risk to its assets, liabilities and surplus from fluctuations in interest rates, foreign currency exchange rates, credit conditions and other market risks. Derivatives may be exchange traded, cleared or executed in the over-the-counter market. A majority of the Company’s over-the-counter derivatives are bilateral contracts between two counterparties. The Company’s remaining over-the-counter derivatives are cleared and settled through central clearing exchanges.

Derivatives that are designated as hedges for accounting purposes and meet the qualifications for statutory hedge accounting are reported on a basis consistent with the asset or liability being hedged (i.e., at amortized cost or fair value). Derivatives that are used to mitigate risk but are not designated as hedges for accounting purposes or otherwise do not meet the qualifications for statutory hedge accounting are reported at fair value.

To qualify for hedge accounting, the hedge relationship must be designated and formally documented at inception. This documentation details the risk management objective and strategy for the hedge, the derivative used in the hedge and the methodology for assessing hedge effectiveness. The hedge must also be “highly effective,” with an assessment of its effectiveness performed both at inception and on an ongoing basis over the life of the hedge.

The fair value of derivative instruments is based on quoted market prices when available. In the absence of quoted market prices, fair value is estimated using industry-standard models utilizing market observable inputs.

NM-28

The Northwestern Mutual Life Insurance Company

Notes to Financial Statements

December 31, 2019, 2018 and 2017

Derivative transactions expose the Company to the risk that a counterparty may not be able to fulfill its obligations under the contract. The Company manages this risk by dealing only with counterparties that maintain a minimum credit rating, by performing ongoing review of counterparties’ credit standing and by adhering to established limits for credit exposure to any single counterparty. The Company also utilizes collateral support arrangements that require the daily exchange of collateral assets if counterparty credit exposure exceeds certain limits. The Company does not offset the statement values for derivatives executed with the same counterparty, even if a master netting arrangement is in place. The Company also does not offset the right to claim collateral against the obligation to return such collateral.

The fair value of collateral held by the Company under derivative support agreements at December 31, 2019 and 2018 was as follows:


	December 31,
	2019		2018
	(in millions)
Bonds:
General Account	$	71	$	5
Separate Accounts		-		-

Total bond collateral	$	71	$	5

Cash:
General Account	$	642	$	509
Separate Accounts		-		1

Total cash collateral	$	642	$	510

Bond collateral held in the general account is not reported in the statements of financial position. Cash collateral held in the general account is reported as cash and short-term investments in the statements of financial position, while the Company’s obligation to return the collateral is reported as other liabilities. Separate account cash collateral assets and related liabilities is reported in the separate account assets and liabilities, respectively, in the statements of financial position.

NM-29

The Northwestern Mutual Life Insurance Company

Notes to Financial Statements

December 31, 2019, 2018 and 2017

The fair value of collateral posted by the Company at December 31, 2019 and 2018 was as follows:


	December 31,
	2019		2018
		(in millions)
Bonds posted for derivative support agreements:
General Account	$	7	$	13
Separate Accounts		-		-
Bonds posted for futures agreements:
General Account		34		24
Separate Accounts		10		11

Total bond collateral	$	51	$	48

Cash posted for derivative support agreements:
General Account	$	12	$	-
Separate Accounts		-		-
Cash posted for futures agreements:
General Account		1		-
Separate Accounts		3		-

Total cash collateral	$	16	$	-

Bonds posted as collateral are reported as bonds and cash posted as collateral is reported as a receivable included in other investments in the statements of financial position.

The Company has no embedded credit derivatives that expose it to the possibility of being required to make future payments.

Hedging - Designated as Hedging Instruments

The Company designates and accounts for the following derivative types as cash flow hedges, with the related derivative instrument reported at amortized cost in the statements of financial position. No component of these derivatives’ economic gain or loss was excluded from the assessment of hedge effectiveness.

Interest rate floors are used to mitigate the asset/liability management risk of a significant and sustained decrease in interest rates for certain of the Company’s insurance products. Interest rate floors entitle the Company to receive payments from a counterparty if market interest rates decline below a specified level. Amounts received on these contracts are reported as net investment income.

Interest rate swaps are used to mitigate interest rate risk for investments in variable interest rate and fixed interest rate bonds over a period of up to 12 years. Interest rate swaps obligate the Company and a counterparty to exchange amounts based on the difference between a variable interest rate index and a specified fixed rate of interest applied to the notional amount of the contract. Amounts received or paid on these contracts are reported as net investment income.

Foreign currency swaps are used to mitigate the foreign exchange risk for investments in bonds and mortgage loans denominated in foreign currencies over a period of up to 30 years. Foreign currency swaps obligate the Company and a counterparty to exchange the foreign currency-denominated interest and principal payments receivable on foreign bonds and mortgage loans for U.S. dollar-denominated payments based on currency exchange rates specified at trade inception. Foreign exchange gains or losses on these contracts are reported as a change in unrealized capital gains or losses until the maturity or termination of the contract, at which time a realized capital gain or loss is recognized. Amounts received or paid on these contracts are reported as net investment income.

NM-30

The Northwestern Mutual Life Insurance Company

Notes to Financial Statements

December 31, 2019, 2018 and 2017

Hedging - Not Designated as Hedging Instruments

The Company enters into other derivative transactions that mitigate economic risks but are not designated as a hedge for accounting purposes or otherwise do not qualify for statutory hedge accounting. These instruments are reported in the statements of financial position at fair value. Changes in the fair value of these instruments are reported as a change in unrealized capital gains or losses until the maturity or termination of the contract, at which time a realized capital gain or loss is recognized.

The average fair value of outstanding derivative assets not designated as hedging instruments was $136 million and $121 million for the years ended December 31, 2019 and 2018, respectively. The average fair value of outstanding derivative liabilities not designated as hedging instruments was $18 million and $6 million for the years ended December 31, 2019 and 2018, respectively.

Interest rate caps and floors are used to mitigate the risk of a significant and sustained increase or decrease in interest rates for certain of the Company’s debt instruments and insurance and annuity products. Interest rate caps and floors entitle the Company to pay or receive payments from a counterparty if market interest rates rise above or decline below a specified level. Amounts paid or received on these contracts are reported as net investment income.

Interest rate swaps are used to mitigate interest rate risk for investments in variable interest rate and fixed interest rate bonds over a period of up to 10 years. Interest rate swaps obligate the Company and a counterparty to exchange amounts based on the difference between a variable interest rate index and a specified fixed rate of interest applied to the notional amount of the contract. Amounts received or paid on these contracts are reported as net investment income.

Swaptions are used to mitigate the asset/liability management risk of a significant and sustained increase in interest rates for certain of the Company’s insurance products. Swaptions provide the Company an option to enter into an interest rate swap with a counterparty on specified terms.

Fixed income futures are used to mitigate interest rate risk for investments in portfolios of fixed income securities. Fixed income futures obligate the Company to sell to or buy from a counterparty a specified number of contracts at a specified price at a future date.

Fixed income forwards are used to gain exposure to the investment risk and return of mortgage-backed securities by utilizing “to-be-announced” (TBA) forward contracts. The Company also uses TBA forward contracts to hedge interest rate risk and participate in the mortgage-backed securities market in an efficient and cost-effective way. Additionally, pursuant to the Company’s mortgage dollar roll program, TBAs or mortgage-backed securities are transferred to counterparties with a corresponding agreement to purchase a substantially similar security for later settlement. These transactions do not qualify as secured borrowings and are accounted for as derivatives.

Foreign currency forwards are used to mitigate the foreign exchange risk for investments in bonds denominated in foreign currencies or common stock or other equity investments in companies operating in foreign countries. Foreign currency forwards obligate the Company to pay to or receive from a counterparty a specified amount of a foreign currency at a future date.

Foreign currency swaps are used to mitigate the foreign exchange risk for investments in bonds denominated in foreign currencies over a period of up to 15 years. Foreign currency swaps obligate the Company and a counterparty to exchange the foreign currency-denominated interest and principal payments receivable on foreign bonds and mortgage loans for U.S. dollar-denominated payments based on currency exchange rates specified at trade inception. Foreign exchange gains or losses on these contracts are reported as a change in unrealized capital gains or losses until the maturity or termination of the contract, at which time a realized capital gain or loss is recognized. Amounts received or paid on these

contracts are reported as net investment income.

NM-31

The Northwestern Mutual Life Insurance Company

Notes to Financial Statements

December 31, 2019, 2018 and 2017

Equity and fixed income total return swaps are used to mitigate market risk for investments in portfolios of common stocks, other equity securities, and fixed income investments. Total return swaps obligate the Company and a counterparty to exchange amounts based on the difference between the return on a specified security, basket of securities or index and a specified short-term funding rate, typically London Interbank Offered Rate (LIBOR) plus or minus a spread, applied to the notional amount of the contract.

Equity index futures are used to mitigate market risk for investments in portfolios of common stock. Equity index futures obligate the Company to pay to or receive from a counterparty an amount based on a specified equity market index as of a future date applied to the notional amount of the contract.

Warrants are acquired through the purchase of private bonds. Warrants provide the Company the right to purchase an underlying financial instrument at a given price and time. Changes in the value of the underlying financial instrument are reported as a change in unrealized capital gains or losses. When the warrant is exercised, the derivative is terminated, and the current value becomes the basis for the new financial instrument.

NM-32

The Northwestern Mutual Life Insurance Company

Notes to Financial Statements

December 31, 2019, 2018 and 2017

The effects of the Company’s use of derivative instruments on the Statements of Financial Position at December 31, 2019 and 2018 were as follows:


	December 31, 2019

	Notional		Statement Value					Fair Value

	Amount		Assets		Liabilities			Assets		Liabilities

					(in millions)
Derivatives designated as hedging instruments:

Interest rate contracts:

Interest rate floors	$	600	$	3	$	-		$	27	$	-

Interest rate swaps		56		-		-			5		-

Foreign exchange contracts:

Foreign currency swaps		10,962		468		(168	)		590		(142	)

Derivatives not designated as hedging instruments:

Interest rate contracts:

Interest rate caps		998		2		-			2		-

Interest rate floors		2,252		32		(2	)		32		(2	)

Interest rate swaps		150		2		(0	)		2		-

Swaptions		3,559		31		-			31		-

Fixed income futures		7,370		-		-			-		-

Fixed income forwards		-		-		-			-		-

Foreign exchange contracts:

Foreign currency forwards		1,092		1		(15	)		1		(15	)

Foreign currency swaps		121		7		(4	)		7		(4	)

Equity contracts:

Equity total return swaps		-		-		-			-		-

Equity index futures		-		-		-			-		-

Fixed contracts:

Fixed income total return swaps		-		-		-			-		-

Warrants		-		-		-			-		-


Total derivatives			$	546	$	(189	)	$	697	$	(163	)

NM-33

The Northwestern Mutual Life Insurance Company

Notes to Financial Statements

December 31, 2019, 2018 and 2017


	December 31, 2018

	Notional		Statement Value					Fair Value

	Amount		Assets		Liabilities			Assets		Liabilities
					(in millions)
Derivatives designated as hedging instruments:

Interest rate contracts:

Interest rate floors	$	600	$	3	$	-		$	22	$	-

Interest rate swaps		56		-		-			1		(1	)

Foreign exchange contracts:

Foreign currency swaps		8,671		567		(80	)		522		(163	)

Derivatives not designated as hedging instruments:

Interest rate contracts:

Interest rate caps		807		5		-			5		-

Interest rate floors		1,026		18		(1	)		18		(1	)

Interest rate swaps		500		11		-			11		-

Swaptions		3,385		63		-			63		-

Fixed income futures		2,670		-		-			-		-

Fixed income forwards		25		-		-			-		-

Foreign exchange contracts:

Foreign currency forwards		466		4		(1	)		4		(1	)

Foreign currency swaps		89		8		(2	)		8		(2	)

Equity contracts:

Equity total return swaps		-		-		-			-		-

Equity index futures		-		-		-			-		-

Fixed contracts:

Fixed income total return swaps		-		-		-			-		-

Warrants		1		16		-			16		-


Total derivatives			$	695	$	(84	)	$	670	$	(168	)

The notional amounts shown above are used to denominate the derivative contracts and do not represent amounts exchanged between the Company and the derivative counterparties. Derivative instruments are reported as other investments or other liabilities in the statements of financial position.

NM-34

The Northwestern Mutual Life Insurance Company

Notes to Financial Statements

December 31, 2019, 2018 and 2017

The effects of the Company’s use of derivative instruments on the statements of operations and changes in surplus for the years ended December 31, 2019, 2018 and 2017 were as follows:


	For the year ended December 31, 2019

	Change in Net Unrealized Capital Gains (Losses)			Net Realized Capital Gains (Losses)			Net Investment Income

				(in millions)

Derivatives designated as hedging instruments:

Interest rate contracts:

Interest rate floors	$	-		$	-		$	8

Interest rate swaps		-			-			-

Foreign exchange contracts:

Foreign currency swaps		(188	)		(3	)		139

Derivatives not designated as hedging instruments:

Interest rate contracts:

Interest rate caps		(3	)		-			(2	)

Interest rate floors		11			-			(1	)

Interest rate swaps		(9	)		4			1

Swaptions		(34	)		-			(9	)

Fixed income futures		7			(123	)		-

Fixed income forwards		-			4			-

Foreign exchange contracts:

Foreign currency forwards		(17	)		46			-

Foreign currency swaps		(1	)		-			1

Equity contracts:

Equity total return swaps		-			68			(9	)

Equity index futures		-			-			-

Fixed contracts:

Fixed income total return swaps		-			-			-

Warrants		26			-			-


Total derivatives	$	(208)		$	(4)		$	128

NM-35

The Northwestern Mutual Life Insurance Company

Notes to Financial Statements

December 31, 2019, 2018 and 2017


	For the year ended December 31, 2018

	Change in Net Unrealized Capital Gains (Losses)		Net Realized Capital Gains (Losses)		Net Investment Income
	(in millions)

Derivatives designated as hedging instruments:

Interest rate contracts:

Interest rate floors	$	-	$	-	$	6

Interest rate swaps		-		-		-

Foreign exchange contracts:

Foreign currency swaps		376		30		107

Derivatives not designated as hedging instruments:

Interest rate contracts:

Interest rate caps		-		-		(2)

Interest rate floors		(1)		-		-

Interest rate swaps		7		12		(1)

Swaptions		8		-		(9)

Fixed income futures		(9)		(32)		-

Fixed income forwards		(4)		(8)		-

Foreign exchange contracts:

Foreign currency forwards		12		24		-

Foreign currency swaps		5		-		-

Equity contracts:

Equity total return swaps		-		-		-

Equity index futures		-		-		-

Fixed contracts:

Fixed income total return swaps		-		-		-

Warrants		16		-		-
Total derivatives	$	410	$	26	$	101

NM-36

The Northwestern Mutual Life Insurance Company

Summary Investment Schedule

December 31, 2019


	For the year ended December 31, 2017

	Change in Net Unrealized Capital Gains (Losses)		Net Realized Capital Gains (Losses)		Net Investment Income
	(in millions)

Derivatives designated as hedging instruments:

Interest rate contracts:

Interest rate floors	$	-	$	-	$	12

Interest rate swaps		-		-		2

Foreign exchange contracts:

Foreign currency swaps		(522)		24		69

Derivatives not designated as hedging instruments:

Interest rate contracts:

Interest rate caps		(6)		-		(1)

Interest rate floors		1		-		-

Interest rate swaps		4		-		(8)

Swaptions		(28)		-		(9)

Fixed income futures		(4)		10		-

Fixed income forwards		(1)		6		-

Foreign exchange contracts:

Foreign currency forwards		(21)		(26)		-

Foreign currency swaps		-		-		-

Equity contracts:

Equity total return swaps		1		(5)		-

Equity index futures		1		1		-

Fixed contracts:

Fixed income total return swaps		-		1		-

Warrants		-		-		-
Total derivatives	$	(575)	$	11	$	65

Changes in net unrealized gains or losses resulting from derivatives that no longer qualify for hedge accounting were $0 million, $5 million and $0 for the years ended December 31, 2019, 2018 and 2017, respectively.

NM-37

The Northwestern Mutual Life Insurance Company

Notes to Financial Statements

December 31, 2019, 2018 and 2017

5.	Reserves for Policy Benefits

General account reserves for policy benefits at December 31, 2019 and 2018 were as follows:


	December 31,
	2019		2018
	(in millions)

Life insurance reserves	$	185,991	$	179,987

Annuity reserves		10,887		9,979

Deposit funds		3,580		3,307

Disability and long-term care unpaid claims and claim reserves		5,200		5,012

Disability and long-term care active life reserves		5,442		4,531

Total reserves for policy benefits	$	211,100	$	202,816

See Note 9 for more information regarding the Company’s use of reinsurance and the related impact on policy benefit reserves.

Life Insurance Reserves

Policy and contract reserves are determined in accordance with standard valuation methods approved by the OCI and are computed in accordance with standard actuarial methodology based on the Commissioners’ Reserve Valuation Method (CRVM) or the net level premium method. The reserves are based on assumptions for interest, mortality and other risks insured.

Life insurance and annuity reserve calculations, using basic data, determine tabular interest, tabular cost, and tabular cost less actual reserves released. Tabular interest on funds not involving life contingencies is calculated as the product of the valuation interest rate times the mean of the amount of funds subject to such rate held at the beginning and end of the year of valuation.

As of December 31, 2019, the Company had $1.9 trillion of total life insurance in force, including $32.3 billion of life insurance in force for which gross premiums were less than net premiums according to the standard valuation methods and assumptions prescribed by the OCI. Gross premiums are calculated using mortality tables that reflect both the Company’s actual experience and the potential transfer of risk to reinsurers. Net premiums are determined in the calculation of statutory reserves, which must be based on industry-standard mortality tables.

Additional premiums or charges are assessed for substandard lives on policies issued after January 1, 1956. Net level premium or CRVM mean reserves for these policies are based on multiples of mortality tables or one-half the net flat or other extra mortality charge. The Company waives deduction of fractional premiums upon death of an insured and returns any portion of the final premium beyond the date of death. Cash values are not promised in excess of the legally computed reserves.

NM-38

The Northwestern Mutual Life Insurance Company

Notes to Financial Statements

December 31, 2019, 2018 and 2017

At December 31, 2019 and 2018, the account and cash values related to the Company’s general account life reserves were as follows:


	Account Value				Cash Value				Reserves
	December 31,
	2019		2018		2019		2018		2019		2018
	(in millions)
Subject to discretionary withdrawal, surrender values, or policy loans:
Universal life	$	7,602	$	6,486	$	7,319	$	6,201	$	7,346	$	6,230
Universal life with secondary guarantees		14		14		11		11		26		23
Other permanent cash value life insurance		-		-		164,904		159,258		168,377		162,517
Variable life		-		-		-		-		941		918
Variable universal life		4		2		4		2		27		23

Not subject to discretionary withdrawal or no cash value:
Term policies without cash value		-		-		-		-		4,556		4,218
Accidental death benefits		-		-		-		-		12		13
Disability - active lives		-		-		-		-		1,032		951
Disability - disabled lives		-		-		-		-		1,243		1,194
Miscellaneous reserves		-		-		-		-		2,774		4,181

Total gross life reserves		7,620		6,502		172,238		165,472		186,334		180,267
Reinsurance ceded		-		-		-		-		1,223		1,188

Total net life insurance	$	7,620	$	6,502	$	172,238	$	165,472	$	185,111	$	179,079

At December 31, 2019 and 2018, the withdrawal characteristics of the Company’s separate account life reserves were as follows:


	Account Value				Cash Value				Reserves
	December 31,
	2019		2018		2019		2018		2019		2018
	(in millions)
Subject to discretionary withdrawal, surrender values or policy loans:
Variable life	$	-	$	-	$	8,162	$	6,913	$	7,281	$	6,061
Variable universal life		1,093		824		1,043		788		1,020		767

Total gross life reserves	$	1,093	$	824	$	9,205	$	7,701	$	8,301	$	6,827

Reinsurance ceded		-		-		-		-		-		-

Total net life insurance	$	1,093	$	824	$	9,205	$	7,701	$	8,301	$	6,827

NM-39

The Northwestern Mutual Life Insurance Company

Notes to Financial Statements

December 31, 2019, 2018 and 2017

Following are amounts reported as net life insurance reserves in the Company’s Annual Statement, which agree with the amounts reported as net life insurance reserves in the table above at December 31, 2019 and 2018.


	December 31,
	2019		2018
	($ in millions)

From Life, Accident & Health Annual Statement:

Life insurance	$	182,519	$	176,700

Accidental death benefits		12		13

Disability - active lives		1,032		951

Disability - disabled lives		1,243		1,194

Miscellaneous reserves		305		222


Subtotal net life insurance		185,111		179,079

From Separate Accounts Annual Statement:

Life insurance		8,301		6,827

Combined Total	$	193,412	$	185,907

During 2019 and 2018, the methodology and mortality assumptions used in certain life insurance reserve calculations were reviewed and updated, and the corresponding reserves were reduced by $1.6 billion and $627 million, net of reinsurance, respectively. This was accounted for as a change in valuation basis and is included in other surplus changes in the statements of changes in surplus.

Annuity Reserves and Deposit Funds

For annuities and supplementary contracts, policy and contract reserves are calculated using Commissioners’ Annuity Reserve Valuation Method (CARVM), Actuarial Guideline 43 for variable annuity products and Actuarial Guideline 33 for all other products. Other deferred annuity reserves are based on policy value, with additional reserves held to reflect guarantees under these contracts. Immediate annuity reserves are based on the present value of expected benefit payments. Changes in future policy benefit reserves on supplementary contracts and income annuities without life contingencies are deposit-type transactions and are excluded from net additions to policy benefit reserves in the statements of operations.

Deposit funds primarily represent reserves for supplementary contracts and income annuities without life contingencies and amounts left on deposit with the Company by beneficiaries or policyowners. Beneficiaries of the Company’s life insurance policies can choose to receive their death benefit in a single lump sum payment or through a supplementary contract consisting of a series of scheduled payments. If the beneficiary does not affirmatively choose a supplementary contract, the proceeds are automatically paid to the beneficiary in a single lump sum.

Prior to November 1, 2013, beneficiaries of the Company’s life insurance policies also could choose to receive their death benefit by deposit of the proceeds (if $20,000 or more) into an interest-bearing retained asset account (“Northwestern Access Fund”). Funds held on behalf of Northwestern Access Fund account holders are segmented in the Company’s general account and are invested primarily in short-term, liquid investments and high quality corporate bonds. Northwestern Access Fund accounts are credited with interest at short-term market rates, with certain accounts subject to guaranteed minimum crediting rates. The total reserve liability for Northwestern Access Fund account balances held by the Company was $328 million and $346 million at December 31, 2019 and 2018, respectively. Accounts were credited with interest at annual rates ranging from 1.28% to 3.50% and 0.90% to 3.50% during 2019 and 2018, respectively. The crediting interest rates changed 45 times and 44 times during 2019 and 2018, respectively.

NM-40

The Northwestern Mutual Life Insurance Company

Notes to Financial Statements

December 31, 2019, 2018 and 2017

At December 31, 2019 and 2018, the withdrawal characteristics of the Company’s general account and separate account annuity reserves and deposit funds were as follows:


	General Account				Separate Account				Total
	December 31,
	2019		2018		2019		2018		2019		2018
	(in millions)
Individual Annuities
Subject to discretionary withdrawal
- with market value adjustment	$	85	$	111	$	-	$	-	$	85	$	111
- at book value less surrender charge of 5% or more		80		76		-		-		80		76
- at fair value		-		-		20,535		17,714		20,535		17,714

Total with market value adjustment or at fair value		165		187		20,535		17,714		20,700		17,901
- at book value without adjustment		1,893		2,035		-		-		1,893		2,035
Not subject to discretionary withdrawal		6,984		6,025		271		238		7,255		6,263

Total gross individual annuities		9,042		8,247		20,806		17,952		29,848		26,199
Reinsurance ceded		-		-		-		-		-		-

Total net individual annuities	$	9,042	$	8,247	$	20,806	$	17,952	$	29,848	$	26,199

Group Annuities
Subject to discretionary withdrawal
- at fair value	$	-	$	-	$	21	$	21	$	21	$	21

Total with market value adjustment or at fair value		-		-		21		21		21		21
Not subject to discretionary withdrawal		1,845		1,732		5,577		4,732		7,422		6,464

Total gross group annuities		1,845		1,732		5,598		4,753		7,443		6,485
Reinsurance ceded		-		-		-		-		-		-

Total net group annuities	$	1,845	$	1,732	$	5,598	$	4,753	$	7,443	$	6,485

Deposit-Type Contracts
Subject to discretionary withdrawal
- with market value adjustment	$	112	$	121	$	-	$	-	$	112	$	121
- at fair value		-		-		31		27		31		27

Total with market value adjustment or at fair value		112		121		31		27		143		148
- at book value without adjustment		3,133		2,922		-		-		3,133		2,922
Not subject to discretionary withdrawal		335		264		-		-		335		264

Total gross deposit-type contracts		3,580		3,307		31		27		3,611		3,334
Reinsurance ceded		-		-		-		-		-		-

Total net deposit-type contracts	$	3,580	$	3,307	$	31	$	27	$	3,611	$	3,334

Total annuity reserves and deposit funds	$	14,467	$	13,286	$	26,435	$	22,732	$	40,902	$	36,018

Of the individual annuity reserves at book value less surrender charge of 5% or more noted above, the Company expects that $11 million will have less than a 5% surrender charge and be reported with the amounts at book value without adjustment in 2020.

NM-41

The Northwestern Mutual Life Insurance Company

Notes to Financial Statements

December 31, 2019, 2018 and 2017

Following are amounts reported as net annuity reserves in the Company’s Annual Statement, which agree with the amounts reported as net annuity reserves in the table above at December 31, 2019 and 2018.


	December 31,
	2019		2018
	($ in millions)

From Life, Accident & Health Annual Statement:

Annuities	$	9,469	$	8,700

Supplementary contracts with life contingencies		1,418		1,279

Deposit-type contracts		3,580		3,307


Subtotal net annuity reserves		14,467		13,286

From Separate Accounts Annual Statement:

Annuities		26,133		22,467

Supplementary contracts		271		238

Other contract deposit funds		31		27


Subtotal net annuity reserves		26,435		22,732

Combined Total	$	40,902	$	36,018

Disability and Long-Term Care Reserves

Unpaid claims and claim reserves for disability and long-term care policies are based on the present value of expected benefit payments. The changes in reserves for unpaid claims, losses and loss adjustment expenses on disability and long-term care policies for the years ended December 31, 2019 and 2018 were as follows:


	For the years ended

	December 31,
	2019			2018
	(in millions)

Balance at January 1	$	5,012		$	4,939

Incurred related to:
Current year		845			796
Prior years		57			(39	)


Total incurred		902			757


Paid related to:
Current year		(34	)		(34	)
Prior years		(680	)		(650	)


Total paid		(714	)		(684	)

Balance at December 31	$	5,200		$	5,012

Changes in reserves for incurred claims related to prior years are generally the result of differences between assumed claim experience at the time reserves were originally estimated and subsequent actual claim experience.

Active life reserves are based on the net level premium method for disability policies issued prior to 1987 and the two-year preliminary term method for those issued after 1987. Active life reserves are mean reserves for disability policies issued through 2000 and mid-terminal plus unearned premium reserves for policies issued after 2000. Active life reserves for long-term care policies consist of mid-terminal reserves and unearned premiums. Mid-terminal reserves are based on the one-year preliminary term method and industry-based morbidity experience.

NM-42

The Northwestern Mutual Life Insurance Company

Notes to Financial Statements

December 31, 2019, 2018 and 2017

During 2019, the morbidity assumptions used in certain long-term care insurance active life reserve calculations were reviewed and updated, and the corresponding reserves were increased by $340 million. This was accounted for as a change in valuation basis and is included in other surplus changes in the statements of changes in surplus.

Additional Actuarial Reserves

Each year, the Company must perform asset adequacy testing (AAT) to demonstrate that reserves make adequate provision for the anticipated cash flows required by contractual obligations and related expenses, in light of assets held for the reserves. Asset adequacy testing is performed in accordance with presently accepted actuarial standards and must include assumptions necessary to determine the adequacy of reserves under moderately adverse conditions. At December 31, 2019 and 2018, reserves required as a result of AAT were as follows:


	December 31,
	2019		2018
	(in millions)

Annuities and deposit funds	$	260	$	140
Life insurance		2		2


Total reserves	$	262	$	142

Statutory Minimum Reserves

The Company has the option to establish reserves for policy benefits using a standard of valuation that produces higher reserves than those calculated according to the minimum standard provided in the statutory regulations. For contracts issued January 1, 2001 and later, excess reserves over the statutory minimums were $549 million and $507 million at December 31, 2019 and 2018, respectively.

6.	Premium and Annuity Considerations Deferred and Uncollected

Gross deferred and uncollected insurance premiums represent life insurance premiums due to be received from policyowners through the next respective policy anniversary dates. Net deferred and uncollected premiums represent only the portion of gross premiums related to mortality charges and interest and are reported in deferred premium and other assets in the statements of financial position.

Deferred and uncollected premiums at December 31, 2019 and 2018 were as follows:


	December 31, 2019				December 31, 2018

	Gross		Net		Gross		Net
	(in millions)

Ordinary new business	$	252	$	156	$	244	$	88
Ordinary renewal		2,806		2,240		2,740		2,205


Total deferred and uncollected premiums	$	3,058	$	2,396	$	2,984	$	2,293

NM-43

The Northwestern Mutual Life Insurance Company

Notes to Financial Statements

December 31, 2019, 2018 and 2017

7.	Separate Accounts

Separate account liabilities at December 31, 2019 and 2018 were as follows:


	Variable Life				Variable Annuities				Total
	December 31,
	2019		2018		2019		2018		2019		2018
	(in millions)

Separate account reserves	$	8,301	$	6,828	$	26,435	$	22,732		34,736	$	29,560
Non-policy liabilities										96		157

Total separate account liabilities									$	34,832	$	29,717

While separate account liability values are not guaranteed by the Company, variable annuity and variable life insurance products do include guaranteed minimum death benefits (GMDB) underwritten by the Company. The maximum potential cost of these guarantees at December 31, 2019 and 2018 was $62 million and $165 million, respectively, which represents the aggregate difference between guaranteed values and otherwise available values for all variable products for which the guaranteed value was greater at the respective reporting dates. These benefits are only available upon the death of the annuitant or insured, and reserves for these benefits are based upon NAIC-prescribed actuarial methods that take into account, among other factors, the likelihood of death based on standard mortality tables. General account reserves for policy benefits included $5 million and $6 million attributable to GMDB at December 31, 2019 and 2018, respectively.

Premiums and other considerations received from variable annuity and variable life insurance policyowners were $1.5 billion and $1.6 billion for the years ended December 31, 2019 and 2018, respectively. These amounts are reported as premiums in the statements of operations. The subsequent transfer of these premiums to the separate accounts, net of amounts received from the separate accounts to provide for policy benefit payments to variable product policyowners, is reported as net transfers to separate accounts in the statements of operations.

Following are amounts reported as transfers to and from separate accounts within the Company’s Separate Account Annual Statement, which agree with the amounts reported as net transfers to (from) separate accounts within these financial statements:


	At and for the years ended December 31,

	2019			2018			2017
	(in millions)
From Separate Account Annual Statement:

Transfers to separate accounts	$	1,522		$	1,696		$	1,726

Transfers from separate accounts		(2,305	)		(2,193	)		(1,955	)


Net transfers to (from) separate accounts	$	(783	)	$	(497	)	$	(229	)

8.	Employee and Financial Representative Benefit Plans

The Company provides defined pension benefits for all eligible employees and financial representatives. This includes sponsorship of noncontributory defined benefit pension plans that are “qualified” under the terms of the Employee Retirement Income Security Act (ERISA) and the Internal Revenue Code (“Code”), as well as “nonqualified” plans that provide benefits to certain participants in excess of limits set by ERISA and the Code for the qualified plans. The Company’s funding policy for the qualified plans is to

NM-44

The Northwestern Mutual Life Insurance Company

Notes to Financial Statements

December 31, 2019, 2018 and 2017

make annual contributions that are no less than the minimum amount needed to comply with the requirements of ERISA and no greater than the maximum amount deductible for federal income tax purposes. The Company made no contributions to the qualified retirement plans during either of the years ended December 31, 2019 and 2018 and does not expect to make a contribution to the plans during 2020.

The Company’s defined benefit pension plans for employees contains two different benefit formulas – a formula based on the final average pay of the participant that was frozen as of December 31, 2013 and one that awards cash balance credits based on each participant’s age and years of service that became effective on January 1, 2014. Benefits accrued under the final average pay formula remain available to participants upon retirement. Accumulated cash balance credits earn interest based on market rates and are subject to a minimum crediting rate. The Company’s defined benefit pension plans for financial representatives utilize a formula that is based on the participant’s estimated annual income earned over their career.

In addition to defined pension benefits, the Company provides certain health care and life insurance benefits (“postretirement benefits”) to retired employees, retired financial representatives and their eligible dependents. Participants are eligible for retirement health care coverage if they meet eligibility requirements for age and length of service and were either active or retired as of July 31, 2013 for employees and as of December 31, 2013 for financial representatives. Employees or financial representatives hired or contracted after the above dates are not eligible for coverage under the postretirement health plans.

Medicare-eligible retirees and their dependents are offered health care options provided under an independent third-party health care marketplace (“marketplace”). Retirees and dependents that are not yet Medicare-eligible retain the historical health care benefits offered by the Company. Medicare-eligible retirees and dependents are provided with a pre-funded retiree health reimbursement account and access to third-party advisors to purchase health benefits through the marketplace. Non-Medicare-eligible retirees and dependents are provided premium assistance based on the retirees’ years of service with the Company. The Company pays the entire cost of retiree life insurance coverage.

Benefit Plan Assets

Aggregate plan assets of the defined benefit pension plans and postretirement benefit plans at December 31, 2019 and 2018, and changes in these assets for the years then ended, were as follows:


	Defined Benefit Plans						Postretirement Benefit Plans

	2019			2018			2019			2018
	(in millions)
Fair value of plan assets at January 1	$	4,621		$	5,012		$	73		$	82

Changes in plan assets:

Actual return on plan assets		988			(250	)		15			(4	)

Actual plan benefits paid		(150	)		(141	)		(4	)		(5	)


Fair value of plan assets at December 31	$	5,459		$	4,621		$	84		$	73

Plan assets consist of group annuity contracts issued by the Company that are funded by a Group Annuity Separate Account, which primarily invests in a diversified portfolio of public and private common stocks and corporate, government and mortgage-backed debt securities. The overall investment objective of the plans is to maximize long-term total rate of return, consistent with prudent standards for investment and asset/liability risk management and in accordance with ERISA requirements. Plan investments are managed with a long-term perspective and for the sole benefit of the plans’ participants.

Plan asset allocations are rebalanced regularly to maintain holdings within desired asset allocation ranges and to reposition the portfolio based upon perceived market opportunities and risks. Diversification, both by and within asset classes, is a primary risk management consideration. Assets are invested across

NM-45

The Northwestern Mutual Life Insurance Company

Notes to Financial Statements

December 31, 2019, 2018 and 2017

various asset classes, sectors, industries and geographies. The measurement date for plan assets was December 31 of the respective period with the fair value of plan assets primarily based on quoted market prices.

The target asset allocations and the actual allocation of the plans’ investments based on fair value at December 31, 2019 and 2018 were as follows:


	Target				Actual
	Allocation				Allocation

	2019		2018		2019		2018

Bonds		64%		56%		62%		56%

Equity investments		35%		43%		36%		43%

Other investments		1%		1%		2%		1%


Total assets		100%		100%		100%		100%

At each of December 31, 2019 and 2018, other investments were comprised of cash and short-term investments.

Benefit Plan Obligations

Aggregate projected benefit obligations (PBOs) of the defined benefit pension plans and postretirement benefit plans at December 31, 2019 and 2018 and changes in these obligations for the years then ended were as follows:


	Defined Benefit Plans						Postretirement Benefit Plans

	2019			2018			2019			2018

	(in millions)

Projected benefit obligation at January 1	$	4,970		$	5,373		$	610		$	724

Changes in benefit obligation:

Service cost of benefits earned		129			146			16			20

Interest cost on projected obligations		204			180			23			21

Projected gross plan benefits paid		(168	)		(158	)		(22	)		(22	)

Experience (gains)/losses		915			(571	)		116			(133	)

Plan amendments and other		-			-			-			-


Projected benefit obligation at December 31	$	6,050		$	4,970		$	743		$	610

The PBO represents the estimated net present value of estimated future benefit obligations. For defined benefit plans, the PBO includes assumptions for future compensation increases for active participants. The accumulated benefit obligation (ABO) is similar to the PBO but is based only on current compensation with no assumption of future compensation increases. The aggregate ABO for the defined benefit plans was $5.7 billion and $4.7 billion for the years ended December 31, 2019 and 2018, respectively. Experience (gains)/losses for each of the years ended December 31, 2019 and 2018 primarily reflect the impact of changes in the PBO discount rate.

NM-46

The Northwestern Mutual Life Insurance Company

Notes to Financial Statements

December 31, 2019, 2018 and 2017

Benefit Plan Assumptions

The assumptions used in estimating the projected benefit obligations at December 31, 2019 and 2018 and the net periodic benefit cost for the years ended December 31, 2019, 2018 and 2017 were as follows:


	Defined Benefit Plans				Postretirement Benefit Plans

	2019		2018		2019		2018
Projected benefit obligation:

Weighted average discount rate		3.17%		4.18%		3.18%		4.18%
Annual increase in compensation		3.75%		3.75%		3.75%		3.75%
Cash balance plan interest crediting rate		3.14%		4.16%		n/a		n/a

	Defined Benefit Plans						Postretirement Benefit Plans

	2019		2018		2017		2019		2018		2017
Net periodic benefit cost:
Weighted average discount rate		4.18%		3.57%		4.10%		4.18%		3.57%		4.10%
Annual increase in compensation		3.75%		3.75%		3.75%		3.75%		3.75%		3.75%
Long-term rate of return on plan assets		6.25%		6.25%		6.50%		6.25%		6.25%		6.50%
Cash balance plan interest crediting rate		4.16%		3.54%		4.10%		n/a		n/a		n/a

The expected long-term rate of return on plan assets is estimated in consideration of historical financial market performance, internal and third-party capital market expectations and the long-term target asset allocation.

The assumed annual increase in future retiree medical costs used in measuring the obligation for postretirement benefits were as follows:


	December 31,

	2019		2018

Assumed annual increase		5.00%		5.50%

Ultimate rate of annual increase		5.00%		5.00%

Year in which ultimate rate is reached		2020		2019

Effective January 1, 2019, the Company’s exposure to medical inflation will be limited to a maximum annual increase of 3% with any annual increase in excess of that rate passed on to the plan’s participants in the form of increased premiums.

NM-47

The Northwestern Mutual Life Insurance Company

Notes to Financial Statements

December 31, 2019, 2018 and 2017

Benefit Plan Funded Status

Following is an aggregate reconciliation of the funded status of the plans to the related financial statement liabilities reported by the Company at December 31, 2019 and 2018.


	Defined						Postretirement
	Benefit Plans						Benefit Plans

	2019			2018			2019			2018
	(in millions)

Fair value of plan assets	$	5,459		$	4,621		$	84		$	73

Projected benefit obligation		6,050			4,970			743			610


Funded status		(591	)		(349	)		(659	)		(537	)

Nonadmitted asset		(485	)		(597	)		-			-


Financial statement liability	$	(1,076	)	$	(946	)	$	(659	)	$	(537	)

The PBO for defined benefit plans above included $1,076 million and $946 million related to nonqualified, unfunded plans at December 31, 2019 and 2018, respectively. In the aggregate, the fair value of qualified defined benefit plan assets represented 110% and 115% of the projected benefit obligations of these plans at December 31, 2019 and 2018, respectively.

Statutory accounting guidance requires that changes in plan funded status be recognized immediately as a direct adjustment to surplus, subject to limitations such as admissibility of net pension assets. These adjustments are included in changes in nonadmitted assets and other in the statements of changes in surplus. Aggregate defined benefit pension and postretirement plan surplus impacts were as follows for the years ended December 31, 2019 and 2018:


	For the year ended December 31, 2019

	Defined Benefit Plans									Postretirement Benefit Plans

	Net experience gains (losses)			Prior service (costs) credits			Net initial asset			Net experience gains (losses)			Prior service (costs) credits
	(in millions)
Balance at January 1	$	(1,113	)	$	190		$	314		$	42		$	(50	)

Amortization from surplus into net periodic benefit cost		53			(25	)		(15	)		(1	)		5

Changes in plan assets and benefit obligations recognized in surplus		(229	)		-			-			(104	)		-

Balance at December 31	$	(1,289	)	$	165		$	299		$	(63	)	$	(45	)


	For the year ended December 31, 2018

	Defined Benefit Plans								Postretirement Benefit Plans

	Net experience gains (losses)			Prior service (costs) credits			Net initial asset		Net experience gains (losses)			Prior service (costs) credits
	(in millions)
Balance at January 1	$	(1,151	)	$	215		$	314	$	(77	)	$	(60	)

Amortization from surplus into net periodic benefit cost		42			(25	)		-		-			5

Changes in plan assets and benefit obligations recognized in surplus:		(4	)		-			-		119			5

Balance at December 31	$	(1,113	)	$	190		$	314	$	42		$	(50	)

NM-48

The Northwestern Mutual Life Insurance Company

Notes to Financial Statements

December 31, 2019, 2018 and 2017

Benefit Plan Costs

The components of net periodic benefit cost for the years ended December 31, 2019, 2018 and 2017 were as follows:


	Defined Benefit Plans									Postretirement Benefit Plans
	2019			2018			2017			2019			2018			2017
	(in millions)

Components of net periodic benefit cost:

Service cost of benefits earned	$	129		$	146		$	128		$	16		$	20		$	22

Interest cost on projected obligations		204			180			179			23			21			23

Amortization of experience losses		53			42			54			(1	)		-			-

Amortization of prior service costs/(credits)		(25	)		(25	)		(25	)		5			5			5

Amortization of initial net asset		(15	)		-			(9	)		-			-			-

Expected return on plan assets		(284	)		(309	)		(291	)		(4	)		(5	)		(5	)

Other		-			-			1			-			-			-


Net periodic benefit cost	$	62		$	34		$	37		$	39		$	41		$	45

The expected benefit payments by the defined benefit plans and the postretirement benefit plans for the years 2020 through 2029 are as follows:


	Defined Benefit Plans		Postretirement Benefit Plans
	(in millions)

2020	$	173	$	24

2021		201		24

2022		210		25

2023		220		26

2024		230		26

2025-2029		1,275		141


Total	$	2,309	$	266

The Company sponsors a contributory 401(k) plan for eligible employees, for which the Company provides a matching contribution, and a noncontributory defined contribution plan for financial representatives. In addition, the Company sponsors nonqualified plans that provide related benefits to certain participants in excess of limits set by ERISA for qualified defined contribution plans. For the years ended December 31, 2019, 2018 and 2017, the Company expensed total contributions to these plans of $53 million, $50 million and $50 million, respectively.

9.	Reinsurance

The Company limits its exposure to life insurance death benefits by ceding coverage to various reinsurers. In 1999, the Company ceased reinsuring new individual disability policies, but has maintained a portion of the reinsurance ceded on policies issued prior to 1999. The Company cedes between 60—80% of the morbidity risk on group disability and 60% of the mortality risk on group life policies.

As part of an affiliated reinsurance agreement, the Company assumes 100% of the net risk associated with NLTC’s long-term care business. At December 31, 2019 and 2018, the net amount due from NLTC under this agreement was $48 million and $44 million, respectively.

NM-49

The Northwestern Mutual Life Insurance Company

Notes to Financial Statements

December 31, 2019, 2018 and 2017

During 2017, the Company and NLTC amended the affiliated reinsurance agreement. Under the terms of the amendment, the Company assumed 100% of the risks associated with a block of long-term care business NLTC recaptured from an un-affiliated reinsurer. This transaction qualified for reinsurance accounting under the SSAP No. 61R – Life, Deposit-Type and Accident and Health Reinsurance, given the complete transfer of risk from NLTC. As part of the reinsurance amendment, the Company received invested assets with a fair value of $228 million as consideration from NLTC. The consideration was reflected as an increase to premiums and other income of $167 million and $21 million, respectively, in the statements of operations and as an increase to unassigned surplus of $40 million that was reflected in the statement of changes in surplus. In addition, reserves for policy benefits were increased by $167 million and IMR liabilities of $17 million were transferred to the Company and reported as an increase to commissions and operating expenses in the statements.

Amounts in the financial statements are reported net of the impact of reinsurance. Reserves for policy benefits at December 31, 2019 and 2018 were reported net of ceded reserves of $1.7 billion and $1.6 billion, respectively. The Company has reinsured all risks disclosed in the financial statements under Actuarial Guideline 48.

The effects of reinsurance on premium revenue and total benefits for the years ended December 31, 2019, 2018 and 2017 were as follows:


	For the years ended December 31,
	2019			2018			2017
	(in millions)

Direct premium revenue	$	19,197		$	18,231		$	17,994

Premiums assumed		763			711			810

Premiums ceded		(950	)		(906	)		(907	)


Premium revenue	$	19,010		$	18,036		$	17,897


Direct benefit expense	$	20,158		$	19,037		$	18,557

Benefits assumed		830			680			902

Benefits ceded		(805	)		(699	)		(656	)


Total benefits	$	20,183		$	19,018		$	18,803

In addition, the Company received $135 million, $129 million and $146 million in allowances from reinsurers for reimbursement of commissions and other expenses on ceded business for the years ended December 31, 2019, 2018 and 2017, respectively. These amounts are reported in other income in the statements of operations. For the years ended December 31, 2019, 2018 and 2017, the Company incurred $136 million, $138 million and $119 million, respectively, in expense allowances on reinsurance assumed from NLTC.

Reinsurance contracts do not relieve the Company from its obligations to policyowners. Failure of reinsurers to honor their obligations could result in losses to the Company. The Company mitigates this counterparty risk by dealing only with reinsurers that meet its financial strength standards while adhering to concentration limits for counterparty exposure to any single reinsurer. Most significant reinsurance treaties contain financial protection provisions that take effect if a reinsurer’s credit rating falls below a prescribed level. There were no reinsurance recoverables at December 31, 2019 and 2018 that were considered by the Company to be uncollectible.

NM-50

The Northwestern Mutual Life Insurance Company

Notes to Financial Statements

December 31, 2019, 2018 and 2017

10.

Federal Income Taxes

The Company files a consolidated federal income tax return including the following subsidiaries:


Northwestern Mutual Investment Services, LLC		Bradford, Inc. and subsidiaries
NML Real Estate Holdings, LLC and subsidiaries		Mason Street Advisors, LLC
NML Securities Holdings, LLC and subsidiaries		NM GP Holdings, LLC and subsidiaries
Northwestern Mutual MU TLD Registry, LLC		NM Pebble Valley, LLC
Northwestern Mutual Wealth Management Company		Northwestern Mutual Registry, LLC
NM Investment Holdings, LLC		NM QOZ Fund, LLC
GRO, LLC and GRO-SUB, LLC		Northwestern Long Term Care Ins. Co
NM Career Distrib. Holdings, LLC and subsidiaries		NM SAS, LLC
NM Investment Management Company, LLC

The Company collects from or refunds to these subsidiaries their share of consolidated federal income taxes determined pursuant to written tax-sharing agreements, which generally require that these subsidiaries determine their share of consolidated tax payments or refunds as if each subsidiary filed a separate federal income tax return on a stand-alone basis.

On December 22, 2017, H.R. 1, informally known as the Tax Cuts and Jobs Act (“the Act” or “Tax Reform”) was signed into law, effective for tax years beginning on or after January 1, 2018. The Act reduced the maximum federal corporate income tax rate from 35% to 21%. The statutory basis of accounting requires the 21% corporate tax rate to be applied to deferred tax balances at December 31, 2017, which resulted in a net reduction to statutory surplus of $1.2 billion. The change in net deferred tax assets was reduced by $1.4 billion and the change in net unrealized capital gains and losses was increased by $0.2 billion in the statement of changes in surplus for the year ended December 31, 2017. The Company began to benefit from the lower federal income tax rate in 2018.

The components of current income tax expense (benefit) in the Statements of Operations for the years ended December 31, 2019, 2018 and 2017 related to “ordinary” taxable income (loss) were as follows:


	For the years ended December 31,
	2019			2018			2017

	(in millions)
Tax payable on ordinary income	$	103		$	110		$	40
Low income housing tax credits		(123	)		(119	)		(107	)
Other tax credits		(49	)		(23	)		(21	)
Decrease in contingent tax liabilities		(130	)		(127	)		(10	)


Total current tax benefit	$	(199	)	$	(159	)	$	(98	)

In addition to current income tax benefit related to ordinary taxable income or loss as summarized above, the Company is subject to federal income tax on “capital” gains and losses that generally result from investment transactions. Investment capital gains and losses resulting from changes in market interest rates or credit spreads are deferred to the IMR net of any related tax expense or benefit. Current tax expense (benefit) of $141 million, $(49) million and $136 million was included in net IMR deferrals for the years ended December 31, 2019, 2018 and 2017, respectively. In addition, net realized capital gains and losses as reported in the statements of operations included current tax expense (benefit) of $173 million, $88 million and $68 million for the years ended December 31, 2019, 2018 and 2017, respectively.

NM-51

The Northwestern Mutual Life Insurance Company

Notes to Financial Statements

December 31, 2019, 2018 and 2017

The table below shows how the Company’s income tax expense or benefit for the years ended December 31, 2019, 2018 and 2017 differs from the amount obtained by applying the statutory rate of 21%, 21% and 35%, respectively, to gain from operations before taxes, including net realized capital gains (losses) before IMR and capital gain tax (benefit):


	For the years ended December 31,
	2019			2018			2017

	(in millions)

Provision computed at statutory rate	$	402		$	98		$	482

Adjustments to the statutory rate:

Revaluation of net deferred tax assets (excluding taxes on net unrealized capital gains) - tax reform		-			-			1,406

Subsidiary distributions		(73	)		(115	)		(162	)

Tax credits		(172	)		(142	)		(128	)

Amortization of IMR		(28	)		(28	)		(57	)

Dividends received deduction		(33	)		(26	)		(37	)

Employee benefits		(12	)		(17	)		(24	)

Deferred adjustments		183			214			(36	)

Other		(21	)		(28	)		-


Total statutory income tax expense (benefit)	$	246		$	(44	)	$	1,444


Federal income tax expense (benefit) reported on statements of operations	$	(199	)	$	(159	)	$	(98	)

Capital gains tax expense, net of IMR transfers		315			39			204

Change in net deferred tax assets		130			76			1,338



Total statutory income tax expense (benefit)	$	246		$	(44	)	$	1,444

During the year, the Company may make payments to or receive refunds from the Internal Revenue Service (IRS) for federal income taxes that are applicable to current or previous tax years. The Company made or received net income tax payments, including subsidiaries, of $410 million, $150 million and $356 million to the IRS during the years ended December 31, 2019, 2018 and 2017, respectively.

Federal income taxes available for recoupment in the case of future tax losses are limited to amounts reported on previous tax returns. Total capital gain taxes paid for tax years 2019, 2018 and 2017 that are available for recoupment are $486 million, $247 million and $323 million, respectively.

Federal income tax returns for 2013 and prior years are closed as to further assessment of tax. Income taxes payable in the statements of financial position represents an estimate of taxes payable, including additional taxes that may become due with respect to tax years that remained open to examination by the IRS (“contingent tax liabilities”) at the respective reporting date.

NM-52

The Northwestern Mutual Life Insurance Company

Notes to Financial Statements

December 31, 2019, 2018 and 2017

Changes in contingent tax liabilities for the years ended December 31, 2019 and 2018 were as follows:


	For the years ended December 31,

	2019			2018
	(in millions)
Balance at January 1	$	283		$	410
Reductions for tax positions of prior years		(130	)		(127	)


Balance at December 31	$	153		$	283

Included in contingent tax liabilities at December 31, 2019 and 2018 were $138 million and $265 million, respectively, of tax positions for which the ultimate deductibility is highly certain but for which there is uncertainty about the timing of the deductions. Because of the impact of deferred taxes for amounts other than interest, the timing of the ultimate deduction may affect the effective tax rate in future periods. The Company has no tax positions for which the ultimate deductibility is not certain.

For the years ended December 31, 2019, 2018 and 2017, the Company recognized $(3) million, $(9) million and $1 million, respectively, of interest-related tax expense.

The components of net deferred tax assets reported in the statements of financial position at December 31, 2019 and 2018 were as follows:


	December 31,
	2019		2018		Change
	(in millions)
Deferred tax assets:
Policy acquisition costs	$	942	$	868	$	74
Investments		259		337		(78	)
Policy benefit liabilities		1,656		1,638		18
Benefit plan obligations		573		516		57
Other		115		83		32

Gross deferred tax assets		3,545		3,442		103

Nonadmitted deferred tax assets		-		-		-

Gross admitted deferred tax assets		3,545		3,442		103

Deferred tax liabilities:
Investments		822		749		73
Other		1,114		901		213


Gross deferred tax liabilities		1,936		1,650		286


Net deferred tax assets	$	1,609	$	1,792	$	(183	)

All gross deferred tax liabilities have been recognized at December 31, 2019 and 2018. The Company did not employ tax planning strategies in its valuation allowance assessment or deferred tax asset admissibility calculations at either December 31, 2019 or 2018.

The Company exceeded the minimum risk-based capital (RBC) level of 300%, which is necessary to apply the maximum admissibility thresholds, based on authorized control level RBC computed without net deferred tax assets at December 31, 2019 and 2018.

NM-53

The Northwestern Mutual Life Insurance Company

Notes to Financial Statements

December 31, 2019, 2018 and 2017

Significant components of the calculation of net admitted deferred tax assets at December 31, 2019 and 2018 were as follows (in millions):


	December 31, 2019								December 31, 2018								Change

	Ordinary		Capital			Total			Ordinary		Capital			Total			Ordinary			Capital			Total
Gross deferred tax assets	$	3,287	$	258		$	3,545		$	3,105	$	337		$	3,442		$	182		$	(79	)	$	103
Statutory valuation allowance adjustment		—		—			—			—		—			—			—			—			—

Adjusted gross deferred tax assets		3,287		258			3,545			3,105		337			3,442			182			(79	)		103
Deferred tax assets nonadmitted		—		—			—			—		—			—			—			—			—

Subtotal net admitted deferred tax asset		3,287		258			3,545			3,105		337			3,442			182			(79	)		103
Deferred tax liabilities		1,114		822			1,936			901		749			1,650			213			73			286

Net admitted deferred tax asset/(liability)	$	2,173	$		(564)	$	1,609		$	2,204	$		(412)	$	1,792		$		(31)	$		(152)	$		(183)


		December 31, 2019								December 31, 2018								Change

		Ordinary		Capital			Total			Ordinary		Capital			Total			Ordinary			Capital			Total

Federal income taxes paid in prior years recoverable through loss carrybacks	$	—	$	147		$	147		$	—	$	197		$	197		$	—		$	(50	)	$	(50	)
Adjusted gross deferred tax assets expected to be realized (excluding the amount of deferred tax assets above) after application of the threshold limitation (lesser of a. or b. below)		1,695		—			1,695			1,625		—			1,625			70			—			70
Adjusted gross deferred tax assets (excluding the amount of deferred tax assets offset by gross deferred tax liabilities)		1,592		112			1,704			1,480		140			1,620			112			(28	)		84
Total deferred tax assets admitted as the result of application of SSAP No. 101	$	3,287	$	259		$	3,545		$	3,105	$	337		$	3,442		$	182		$		(78)	$	103

a. Adjusted gross deferred tax assets expected to be realized following the balance sheet date						$	1,695							$	1,625								$	70

b. Adjusted gross deferred tax assets allowed per limitation threshold						$	3,386							$	3,043								$	343

Ratio percentage used to detemine recovery period and threshold limitation amount							1010	%							976	%

Amount of adjusted capital and surplus used to determine recovery period and threshold limitation						$	22,576							$	20,286

11.

Commitments and Contingencies

Commitments

In the normal course of its investment activities, the Company makes commitments to fund private equity investments, real estate, mortgage loans and other investments. These forward commitments aggregated to $10.1 billion and $9.4 billion at December 31, 2019 and 2018, respectively, and were extended at market rates and terms.

Contingencies

The Company is engaged in various legal actions in the normal course of its insurance and investment operations. The status of these legal actions is actively monitored by the Company. If the Company believes, based on available information, that an adverse outcome upon resolution of a given legal action is probable and the amount of that adverse outcome is reasonably estimable, a loss is recognized and a related liability reported. Legal actions are subject to inherent uncertainties, and future events could change the Company’s assessment of the probability or estimated amount of potential losses from pending or threatened legal actions. Based on available information, it is the opinion of the Company that the ultimate resolution of pending or threatened legal actions, both individually and in the aggregate, will not result in losses that would have a material effect on the Company’s financial position at December 31, 2019.

NM-54

The Northwestern Mutual Life Insurance Company

Notes to Financial Statements

December 31, 2019, 2018 and 2017

Guarantees

In the normal course of business, the Company makes guarantees to third parties on behalf of wholly-owned subsidiaries (e.g., debt guarantees) and financial representatives (e.g., the guarantee of office lease payments), or directly to financial representatives (e.g., future minimum compensation payments). If the financial representatives are not able to meet their obligations or these minimum compensation thresholds are not otherwise met, the Company would be required to make payments to fulfill its guarantees. For certain of these guarantees, the Company has the right to pursue recovery of payments made under the agreements. The terms of these guarantees range from less than one year to twenty-one years at December 31, 2019.

Following is a summary of the guarantees provided by the Company that were outstanding at December 31, 2019 and 2018, including both the maximum potential exposure under the guarantees and the financial statement liability reported based on fair value of the guarantees.


	December 31, 2019					December 31, 2018

Nature of guarantee	Maximum potential amount of future payments			Financial statement liability		Maximum potential amount of future payments			Financial statement liability

			(in millions)					(in millions)
Guarantees of future minimum compensation - financial representatives	$	67		$	1	$	96		$	1

Guarantees of real estate obligations		418			4		382			4

Guarantees issued on behalf of wholly-owned subsidiaries		19			-		39			-

Total guarantees	$	504		$	5	$	517		$	5

No material payments have been required under these guarantees to date, and the Company believes the probability that it will be required to perform under these guarantees in the future is remote. Performance under these guarantees would require the Company to recognize additional operating expense or increase the amount of its equity investment in the affiliate or subsidiary on behalf of which the guarantee was made.

12.

Related Party Transactions

The Company has a capital support and guarantee of benefits agreement that requires it to maintain the capital and surplus (as defined) of NLTC at a minimum level based upon a formula applied to NLTC’s earned premium and policy benefit reserves, or 150% of its company action level of RBC as prescribed by the NAIC, whichever is lower. In addition, NM guarantees NLTC’s policyowners its’ ability to pay all policy benefits due and owed pursuant to contracts of insurance sold by NLTC during the term of the agreement. This agreement was amended during 2017 to extend the length of the agreement through December 31, 2022 and lower the aggregate capital contribution limit from $800 million to $200 million. The Company contributed capital to NLTC of $25 million and $35 million for the years ended December 31, 2019 and 2018, respectively. The Company has contributed a total of $190 million to NLTC through December 31, 2019.

NM-55

The Northwestern Mutual Life Insurance Company

Notes to Financial Statements

December 31, 2019, 2018 and 2017

The Company reported a payable to NLTC of $56 million and $50 million at December 31, 2019 and 2018, respectively, which is reported in other liabilities in the statements of financial position at each of those dates. Intercompany balances are settled in cash, generally within thirty days of the respective reporting date.

13.

Surplus Notes

The following table summarizes the surplus notes issued by the Company and are outstanding at December 31, 2019:


Description	Issue date		Principal amount		Statement value		Interest paid current year		Cumulative interest paid		Interest rate			Maturity date
	($ in millions)
2010 Notes		3/26/2010	$	1,224	$	1,224	$	105	$	1,008		6.063	%		3/30/2040

2017 Notes		9/26/2017	$	1,200	$	1,198	$	46	$	93		3.850	%		9/30/2047

2019 Notes		9/20/2019	$	1,347	$	1,146	$	-	$	-		3.625	%		9/30/2059

		Total	$	3,771	$	3,568	$	151	$	1,101

Each series of notes was distributed pursuant to Rule 144A under the Securities Act of 1933, as amended. Interest on each of the above notes is payable semi-annually on March 30 and September 30, subject to approval by the OCI. SAP requires recognition of interest expense on the notes upon OCI approval of semi-annual interest payments.

On September 20, 2019, the Company issued $1,347 million of 2019 notes.A portion of the issuance was comprised of $600 million new principal, issued at a discount, with net proceeds of $597 million. The remaining $747 million of principal was used to redeem 2010 notes with a principal balance of $526 million as part of a surplus note exchange transaction. Of the $221 million of discount at the time of the exchange, $22 million was related to an inducement for noteholders to exchange their 2010 notes, and was recorded as a reduction to net investment income within the statement of operations. Since this exchange transaction did not meet the “substantially different” criteria within SSAP No. 103R, Transfers and Servicing of Financial Assets and Extinguishments of Liabilities, the remaining discount of $199 million will be amortized and charged to the statement of operations over the remaining life of the 2019 notes.

The notes are unsecured and subordinated to all present and future indebtedness, policy claims and other creditor claims of the Company and do not repay principal prior to maturity, with principal payment at maturity subject to the prior approval of the OCI. The notes are not redeemable at the option of any note holder but are redeemable, in whole or in part, at the option of the Company at any time, subject to the prior approval of the OCI, at a “make whole” redemption price equal to the greater of the principal amount of the notes to be redeemed or the sum of the present value of the remaining scheduled payments of principal and interest on the notes to be redeemed, excluding accrued interest as of the date on which the notes are to be redeemed, discounted on a semi-annual basis at a defined U.S. Treasury rate plus 0.20% (2017 notes) and 0.25% (2010 and 2019 notes). The entire amount of the 2017 and 2019 notes are redeemable, at par, in the event of certain defined tax events.

No affiliates of the Company hold any portion of the notes, which are generally held of record at the Depository Trust Company by bank custodians on behalf of investors. No single investor holds 10% or more of the 2017 notes or the 2019 notes. The largest holder of the 2010 notes is Nippon Life Insurance Company of Japan, which held $250 million in principal amount of notes at each of December 31, 2019 and 2018.

NM-56

The Northwestern Mutual Life Insurance Company

Notes to Financial Statements

December 31, 2019, 2018 and 2017

14.

Fair Value of Financial Instruments

Certain of the Company’s assets and liabilities are considered “financial instruments” as defined by Statement of Statutory Principles No. 100, Fair Value Measurements (SSAP 100). The Company’s estimation of fair value for financial instruments uses a hierarchy that, where possible, makes use of quoted market prices from active and transparent markets for assets that are identical to those being valued, typically obtained from independent pricing services (“level 1”). In the absence of quoted market prices for identical assets, fair value is estimated by these pricing services using relevant and observable market-based inputs for substantially similar securities (“level 2”). Financial instruments for which no quoted market prices or observable inputs are available are generally valued using internally-developed pricing models or indicative (i.e., non-binding) quotes from independent securities brokers (“level 3”).

The Company actively monitors fair value estimates received from independent pricing services at each financial reporting date, including analysis of valuation changes for individual securities compared to overall market trends and validation on an exception basis with internally-developed pricing models. The Company also performs periodic reviews of the information sources, inputs and methods used by its independent pricing services, including an evaluation of their control processes. Where necessary, the Company will challenge third-party valuations or methods and require more observable inputs or different methodologies.

For financial instruments included in the scope of SSAP 100, the statement value and fair value at December 31, 2019 and 2018 were as follows:


	December 31, 2019

					Quoted prices in		Significant		Significant		Net

					active markets		observable		unobservable		Asset

	Statement		Fair		for identical assets		inputs		inputs		Value

	Value		Value		(level 1)		(level 2)		(level 3)		(NAV)
	(in millions)
General account investment assets:
Bonds	$	159,760	$	168,729	$	2,605	$	151,243	$	14,881	$	-
Mortgage loans		39,771		41,784		-		-		41,784
Common and preferred stocks		4,267		4,290		3,671		78		541
Policy loans		17,829		17,829		-		-		17,829
Derivative assets		546		697		-		697		-
Surplus note investments		111		144		-		144		-		-
Cash and short-term investments		2,408		2,408		809		1,599		-		-

Separate account assets		34,832		34,832		31,092		3,017		617		106

General account liabilities:
Investment-type insurance reserves	$	5,242	$	5,189	$	-	$	-	$	5,189	$	-
Liabilities for repuchase agreements		1,711		1,711		-		1,711		-		-
Derivative liabilities		189		163		-		163		-		-

Separate account liabilities		34,832		34,832		31,092		3,017		617		106

NM-57

The Northwestern Mutual Life Insurance Company

Notes to Financial Statements

December 31, 2019, 2018 and 2017


	December 31, 2018

					Quoted prices in		Significant		Significant		Net

					active markets		observable		unobservable		Asset

	Statement		Fair		for identical assets		inputs		inputs		Value

	Value		Value		(level 1)		(level 2)		(level 3)		(NAV)
	(in millions)
General account investment assets:
Bonds	$	153,713	$	151,565	$	4,164	$	132,645	$	14,756	$	-
Mortgage loans		36,755		37,143		-		-		37,143
Common and preferred stocks		5,260		5,279		4,669		77		533
Policy loans		17,693		17,693		-		-		17,693
Derivative assets		695		670		-		654		16
Surplus note investments		108		131		-		131		-		-
Cash and short-term investments		1,899		1,899		525		1,374		-		-

Separate account assets		29,717		29,717		26,954		2,231		532

General account liabilities:
Investment-type insurance reserves	$	5,187	$	5,022	$	-	$	-	$	5,022
Liabilities for repuchase agreements		1,763		1,763		-		1,763		-		-
Derivative liabilities		84		168		-		168		-		-

Separate account liabilities		29,717		29,717		26,954		2,231		532		-

Bonds

Bonds classified as level 1 financial instruments are generally limited to U.S. Treasury securities. Most bonds, including U.S. and foreign public and private corporate bonds, municipal bonds and structured securities, are classified as level 2 financial instruments and are valued based on prices obtained from independent pricing services or internally-developed pricing models using observable inputs. Typical market-observable inputs include benchmark yields, reported trades, issuer spreads, bids, offers, benchmark securities, estimated cash flows and prepayment speeds. Level 3 bonds are typically privately-placed and relatively illiquid, with fair value based on non-binding broker quotes or internally-developed pricing models utilizing unobservable inputs. See Note 3 for more information regarding the Company’s investments in bonds.

Mortgage Loans

Mortgage loans consist solely of commercial mortgage loans underwritten and originated by the Company. Fair value of these loans is estimated using a discounted cash flow approach based on market interest rates for commercial mortgage debt with comparable credit risk and maturity. See Note 3 for more information regarding the Company’s investments in mortgage loans.

Common and Preferred Stock

Common and preferred stocks classified as level 1 financial instruments are limited to those actively traded on a U.S. or foreign stock exchange. Level 2 securities are stocks for which market quotes are available but are not considered to be actively traded. Common and preferred stocks classified as level 3 are generally privately-placed with fair value primarily based on a sponsor valuation or market comparables approach utilizing unobservable inputs. See Note 3 for more information regarding the Company’s investments in common and preferred stocks.

Policy Loans

See Note 2 for information regarding policy loans, for which the Company considers the unpaid principal balance to approximate fair value.

NM-58

The Northwestern Mutual Life Insurance Company

Notes to Financial Statements

December 31, 2019, 2018 and 2017

Derivative Instruments

The Company’s derivative investments are generally traded in over-the-counter markets with fair value estimated using industry-standard models with market-observable inputs such as swap yield curves, LIBOR basis curves, foreign currency spot rates, foreign currency basis curves, option volatilities and credit spreads. Warrants classified as level 3 are generally privately-placed with fair value primarily based on a sponsor valuation or market comparables approach utilizing unobservable inputs. See Note 4 for more information regarding the Company’s derivative investments.

Surplus Note Investments

The Company invests in surplus note issuances of other mutual insurance companies. These bond-like instruments are classified as level 2 financial instruments and are valued based on prices obtained from independent pricing services or internally-developed pricing models using observable inputs. Typical market-observable inputs include benchmark yields, reported trades, issuer spreads, bids, offers, benchmark securities, estimated cash flows and prepayment speeds.

Cash and Short-term Investments

Cash and short-term investments include cash deposit balances, money market mutual funds, short-term commercial paper and other highly-liquid debt instruments, for which the Company considers net asset value or amortized cost to approximate fair value.

Separate Account Assets and Liabilities

See Note 2 and Note 7 for information regarding the Company’s separate accounts, for which fair value is primarily based on quoted market prices for the related common stocks, preferred stocks, bonds, derivative instruments and other investments. Separate account assets classified as level 3 financial instruments are primarily securities partnership investments that are valued based on the Company’s underlying equity in the partnerships, which the Company considers to approximate fair value.

General Account Insurance Reserves

The Company’s general account insurance liabilities defined as financial instruments under SSAP 100 are limited to “investment-type” products such as fixed-rate annuity policies, supplementary contracts without life contingencies and amounts left on deposit. The fair value of investment-type insurance reserves is estimated based on future cash flows discounted at market interest rates for similar instruments with comparable maturities.

Repurchase Agreement Liabilities

See Note 3 for information regarding repurchase agreement activity, for which the Company considers the liability to return collateral to approximate the fair value of collateral originally received.

NM-59

The Northwestern Mutual Life Insurance Company

Notes to Financial Statements

December 31, 2019, 2018 and 2017

Assets and Liabilities Reported at Fair Value

The following tables summarize assets and liabilities measured and reported at fair value in the statements of financial position at December 31, 2019 and 2018.


	December 31, 2019

	Quoted prices in		Significant		Significant		Net

	active markets		observable		unobservable		Asset

	for identical assets		inputs		inputs		Value

	(level 1)		(level 2)		(level 3)		(NAV)		Total

	(in millions)
General account:
Bonds	$	3	$	37	$	5	$	-	$	45
Common and preferred stocks		3,671		-		458		-		4,129
Money market mutual funds		668		-		-		-		668
Derivative assets		-		75		-		-		75
Derivative liabilities		-		21		-				21


Total general account	$	4,342	$	133	$	463	$	-	$	4,938

Separate accounts:
Mutual fund investments	$	29,245	$	-	$	-		-	$	29,245
Other benefit plan assets/liabilities		21		18		4		1		44
Pension and postretirement assets:
Bonds		226		2,887		119		-		3,232
Common and preferred stock		1,462		1		46		105		1,614
Cash and short-term securities		34		105		-		-		139
Other assets/liabilities		104		6		448		-		558

Subtotal pension and postretirement assets		1,826		2,999		613		105		5,543


Total separate accounts	$	31,092	$	3,017	$	617	$	106	$	34,832


	December 31, 2018

	Quoted prices in		Significant		Significant		Net

	active markets		observable		unobservable		Asset

	for identical assets		inputs		inputs		Value

	(level 1)		(level 2)		(level 3)		(NAV)		Total

	(in millions)
General account:
Bonds	$	117	$	-	$	5	$	-	$	122
Common and preferred stocks		4,669		1		455				5,125
Money market mutual funds		427		-		-				427
Derivative assets		-		109		16				125
Derivative liabilities		-		4		-				4


Total general account	$	5,213	$	114	$	476	$	-	$	5,803

Separate accounts:
Mutual fund investments	$	24,892	$	-	$	-			$	24,892
Other benefit plan assets/liabilities		109		19		4				132
Pension and postretirement assets:
Bonds		333		2,167		106				2,606
Common and preferred stock		1,644		1		40		-		1,685
Cash and short-term securities		28		42		-		-		70
Other assets/liabilities		(52)		3		381		-		332

Subtotal pension and postretirement assets		1,953		2,213		527		-		4,693


Total separate accounts	$	26,954	$	2,232	$	531	$	-	$	29,717

There were no material asset transfers into or out of level 3 during the years ended December 31, 2019 or 2018.

NM-60

The Northwestern Mutual Life Insurance Company

Notes to Financial Statements

December 31, 2019, 2018 and 2017

The following tables summarize the changes in fair value of level 3 financial instruments for the years ended December 31, 2019 and 2018.


For the year ended December 31, 2019	General account common and preferred stock			General account bonds		Derivative assets			Separate account assets

	(in millions)
Fair value, beginning of period	$	455		$	5	$	16		$	531

Realized gains/(losses)		(27	)		-		-			41

Unrealized gains/(losses)		24			-					26

Issuances		-			-		-			-

Purchases		37			-		-			151

Sales		(35	)		-		-			(132	)

Settlements		-			-		-			-

Net discount/premium		4			-		-			(1	)

Transfers into level 3					-		-			1

Transfers out of level 3		-			-		(16	)

Fair value, end of period	$	458		$	5	$	-		$	617


For the year ended December 31, 2018	General account common and preferred stock			General account bonds		Derivative assets		Separate account assets

	(in millions)
Fair value, beginning of period	$	478		$	5	$	-	$	468

Realized gains/(losses)		130			-		-		44

Unrealized gains/(losses)		(28	)		-		16		(11	)

Issuances		-			-		-		-

Purchases		35			-		-		185

Sales		(209	)		-		-		(154	)

Settlements		-			-		-		-

Net discount/premium		-			-		-		-

Transfers into level 3		49			-		-		3

Transfers out of level 3		-			-		-		(4	)

Fair value, end of period	$	455		$	5	$	16	$	531

The fair values of level 3 financial instruments are sensitive to changes in significant unobservable inputs. Level 3 bonds are valued using a combination of discounted cash flows and indicative quotes from independent securities brokers based on market comparable companies. The most significant unobservable input in the discounted cash flow analysis is the discount rate. This rate is estimated based upon a risk-free market interest rate (U.S. Treasury with comparable maturity) plus a credit spread adjustment based on the estimated credit rating of the issuer. In general, issuers with lower credit ratings have higher credit spreads. A decrease in the credit spread adjustment would increase the fair value of the investment as the future expected cash flows are discounted at a lower rate. The opposite impact would occur if credit spread adjustments increase.

NM-61

The Northwestern Mutual Life Insurance Company

Notes to Financial Statements

December 31, 2019, 2018 and 2017

Level 3 privately-placed common and preferred stocks and derivatives, are primarily valued using a private equity sponsor valuation or market comparables approach. Both approaches rely on the use of multiples that are based on industry-specific comparable companies. Multiples are derived from the relationship of an entity’s fair value to its book value or earnings before interest, taxes, depreciation and amortization (EBITDA). The use of EBITDA normalizes for company-specific differences in capital structure, taxation and fixed asset accounting. An increase in the multiple would result in an increase in the fair value of the investment. The opposite impact would occur if the multiple decreased.

NM-62

						PART C
					OTHER INFORMATION
Item 26.	Exhibits

Exhibit			Description				Filed Herewith/Incorporated Herein By
							Reference To
(a)(1)			Resolution of the Board of Trustees of The				Exhibit (a)(1) to Form N-6 Post-Effective
			Northwestern Mutual Life Insurance Company				Amendment No. 30 for Northwestern Mutual
			amending Northwestern Mutual Variable Life				Variable Life Account, File No. 2-89972, filed
			Account Operating Authority				February 21, 2006

(a)(2)			Resolution of Board of Trustees of The				Exhibit A(1) to Form S-6 Registration Statement
			Northwestern Mutual Life Insurance Company				for Northwestern Mutual Variable Life Account,
			establishing the Account				File No. 333-36865, filed on October 1, 1997

(b)			Not Applicable
(c)			Distribution Agreement Between The				Exhibit (c) to Form N-6 Registration Statement for
			Northwestern Life Insurance Company and				Northwestern Mutual Variable Life Account II, File
			Northwestern Mutual Investment Services, LLC,				No. 333-136124, filed on July 28, 2006
			dated May 1, 2006

(d)(1)			Form of Policies –				Exhibits (d)(1), (d)(2), (d)(3), (d)(4), (d)(5), (d)(6),
		(1)		Extra Ordinary Variable Life Insurance			(d)(7), (d)(8), (d)(9), (d)(10) and (d)(11) to Form
				Policy (Variable Whole Life Policy with			N-6 Post-Effective Amendment No. 26 for
				Extra Life Protection), MM17, with			Northwestern Mutual Variable Life Account, File
				application			No. 2-89972, filed on February 28, 2003
		(2)		Extra Ordinary Variable Life Insurance
				Policy (Variable Whole Life Policy with
				Extra Life Protection), MP17, with
				application (for employers)
		(3)		Single Premium Variable Whole Life
				Insurance Policy, MM16, with application
		(4)		Single Premium Variable Whole Life
				Insurance Policy, MP16, with application
				(for employers)
		(5)		Form of notice of short-term cancellation
				right
		(6)		Forms of Optional Riders:
				(i) Waiver of Premium Benefit
					(ii) Accidental Death Benefit
					(iii) Additional Purchase Benefit
					(iv) Term Insurance Benefit
			(7)	Form of Amendment to Variable Life and
				Variable EOL Form MM.305.(0593)
		(8)		Form of Amendment to Single Premium
				Variable Life Form MM.306.(0593)
		(9)		Form of Amendment to Variable Whole
				Life Form MM.305.(0594)
			(10)		Form of Amendment to Variable
				Whole Life Form MM.305.(0594)
			(11) Form of Amendment to Variable Single
				Premium Life Form MM.306.(0594)

(d)(2)			Amendment to Variable Life and Variable EOL				Exhibit A(5)(a) to Form S-6 Post-Effective
			Policy				Amendment No. 21 for Northwestern Mutual
							Variable Life Account, File No. 2-89972, filed
							February 25, 1999

C-1

(e)	Form of Life Insurance Application 90-1 JCL	Exhibit (e) to Form N-6 Post-Effective Amendment
	(0198) WISCONSIN and Application	No. 9 for Northwestern Mutual Variable Life
	Supplement (1003)	Account, File No. 333-59103, filed April 28, 2005

(f)(1)	Restated Articles of Incorporation of The	Exhibit B(1) to Form N-4 Post-Effective
	Northwestern Mutual Life Insurance Company	Amendment No. 6, File No. 33-58476, filed
	(adopted July 26, 1972)	November 13, 1995

(f)(2)	Amended By-Laws of The Northwestern	Exhibit B(6) to Form N-6 Post-Effective
	Mutual Life Insurance Company dated	Amendment No. 6 for Northwestern Mutual
	December 4, 2002	Variable Life Account, File No. 333-59103, filed
		February 28, 2003
(g)(1)	Reinsurance Agreement dated December 19,	Exhibit (g)(1) to Form N-6 Pre-Effective
	2013 between RGA Reinsurance Company and	Amendment No. 1, File No. 333-230143, filed
	The Northwestern Mutual Life Insurance	August 30, 2019
	Company

(g)(2)	Reinsurance Agreement dated December 19,	Exhibit (g)(2) to Form N-6 Pre-Effective
	2013 between Munich American Reassurance	Amendment No. 1, File No. 333-230143, filed
	Company and The Northwestern Mutual Life	August 30, 2019
	Insurance Company

(g)(3)	Reinsurance Agreement dated December 22,	Exhibit (g)(3) to Form N-6 Pre-Effective
	2015 between Munich American Reassurance	Amendment No. 1, File No. 333-230143, filed
	Company and The Northwestern Mutual Life	August 30, 2019
	Insurance Company

(g)(4)	Reinsurance Agreement dated November 7,	Exhibit (g)(4) to Form N-6 Pre-Effective
	2013 between Swiss Re Life & Health	Amendment No. 1, File No. 333-230143, filed
	American Inc. and The Northwestern Mutual	August 30, 2019
	Life Insurance Company

(g)(5)	Reinsurance Agreement dated December 22,	Exhibit (g)(5) to Form N-6 Pre-Effective
	2015 between Swiss Re Life & Health	Amendment No. 1, File No. 333-230143, filed
	American Inc. and The Northwestern Mutual	August 30, 2019
	Life Insurance Company

(g)(6)	Reinsurance Agreement dated December 23,	Exhibit (g)(6) to Form N-6 Pre-Effective
	2013 between General Re Life Corporation and	Amendment No. 1, File No. 333-230143, filed
	The Northwestern Mutual Life Insurance	August 30, 2019
	Company

(g)(7)	Reinsurance Agreement dated December 22,	Exhibit (g)(7) to Form N-6 Pre-Effective
	2013 between Hannover Life Reassurance	Amendment No. 1, File No. 333-230143, filed
	Company of American and The Northwestern	August 30, 2019
	Mutual Life Insurance Company

(g)(8)	Reinsurance Agreement dated December 2,	Exhibit (g)(8) to Form N-6 Pre-Effective
	2013 between SCOR Global Life USA	Amendment No. 1, File No. 333-230143, filed
	Reinsurance Company and The Northwestern	August 30, 2019
	Mutual Life Insurance Company

(h)(a)(1)	Participation Agreement dated March 16, 1999	Exhibit (b)(8)(a) to Form N-4 Post-Effective
	Among Russell Insurance Funds, Russell Fund	Amendment No. 66, File No. 2-29240, filed on
	Distributors, Inc. and The Northwestern Mutual	April 28, 2005
	Life Insurance Company

C-2

(h)(a)(2)	Amendment No. 1 dated August 7, 2000 to the	Exhibit (h)1(a)(2) to Form N-6 Registration
	Participation Agreement dated March 16, 1999	Statement, File No. 333-136124, filed on July 28,
	Among Russell Insurance Funds, Russell Fund	2006
	Distributors, Inc. and The Northwestern Mutual
	Life Insurance Company

(h)(a)(3)	Amendment No. 2 dated October 13, 2006 to	Exhibit (h)1(a)(3) to Form N-6 Pre-Effective
	Participation Agreements dated March 16, 1999	Amendment No. 1, File No. 333-136124, filed
	and August 7, 2000, respectively, by and among	December 13, 2006
	The Northwestern Mutual Life Insurance
	Company, Russell Investment Funds, f/k/a
	"Russell Insurance Funds", and Russell Fund
	Distributors, Inc.

(h)(a)(4)	Amendment No. 3 dated August 29, 2007 to	Exhibit (h)(a)(4) to Form N-6 Pre-Effective
	Participation Agreements dated March 16,	Amendment No. 9, File No. 333-136124, filed
	1999, August 7, 2000, and October 13, 2006,	April 25, 2013
	respectively, by and among The Northwestern
	Mutual Life Insurance Company, Russell
	Investment Funds, f/k/a "Russell Insurance
	Funds", and Russell Fund Distributors, Inc.

(h)(b)(1)	Participation Agreement dated May 1, 2003	Exhibit (b)(8)(b) to Form N-4 Post-Effective
	among Variable Insurance Products Funds,	Amendment No. 66, File No. 2-29240, filed April
	Fidelity Distributors Corporation and The	28, 2005
	Northwestern Mutual Life Insurance Company

(h)(b)(2)	Amendment No. 1 dated October 18, 2006 to	Exhibit (h)1(b)(2) to Form N-6 Pre-Effective
	Participation Agreement dated May 1, 2003, by	Amendment No. 1, File No. 333-136124, filed
	and among The Northwestern Mutual Life	December 13, 2006
	Insurance Company, Fidelity Distributors
	Corporation, and each of Variable Insurance
	Products Fund, Variable Insurance Products
	Fund II, and Variable Insurance Products Fund
	III

(h)(c)(1)	Participation Agreement dated April 30, 2007	Exhibit (h)(e) to Form N-6 Post-Effective
	among Neuberger Berman Advisers	Amendment No. 7, for Northwestern Mutual
	Management Trust, Neuberger Berman	Variable Life Account II, File No. 333-136124,
	Management Inc., and The Northwestern	filed on April 26, 2012
	Mutual Life Insurance Company

(h)(d)(1)	Participation Agreement dated September 27,	Exhibit (h)(b)(4) to Form N-6 Post-Effective
	2013 among Credit Suisse Trust, Credit Suisse	Amendment No. 10 for Northwestern Mutual
	Asset Management, LLC, Credit Suisse	Variable Life Account II, File No. 333-136124,
	Securities (USA) LLC, and The Northwestern	filed on October 1, 2013
	Mutual Life Insurance Company

(h)(d)(2)	Amendment to Participation Agreement dated	Exhibit (h)(d)(2) to Form N-6 Pre-Effective
	September 27, 2013 among Credit Suisse Trust,	Amendment No. 1, for Northwestern Mutual
	Credit Suisse Asset Management, LLC, Credit	Variable Life Account II, File No. 333-230143,
	Suisse Securities (USA) LLC, and The	filed on August 30, 2019
	Northwestern Mutual Life Insurance Company

(h)(e)(1)	Administrative Services Agreement dated April	Exhibit (h)(e)(1) to Form N-6 Pre-Effective
	23, 2007 between The Northwestern Mutual	Amendment No. 1 File No. 333-230143, filed on
	Life Insurance Company and Frank Russell	August 30, 2019
	Company

C-3

(h)(f)(1)	Service Agreement dated May 1, 2003 between	Exhibit (b)(8)(c)(2) to Form N-4 Pre-Effective
	Fidelity Investments Institutional Operations	Amendment No. 1, File No. 333-133380, filed
	Company, Inc. and The Northwestern Mutual	August 8, 2006
	Life Insurance Company

(h)(f)(2)	Amendment dated August 1, 2004 to the Service	Exhibit (b)(8)(c)(3) to Form N-4 Pre-Effective
	Agreement dated May 1, 2003 between Fidelity	Amendment No. 1, File No. 333-133380, filed
	Investments Institutional Operations Company,	August 8, 2006
	Inc. and The Northwestern Mutual Life
	Insurance Company

(h)(h)(1)	Administrative Services Agreement dated	Exhibit (h)(h)(1) to Form N-6 Pre-Effective
	October 1, 2013 between Credit Suisse	Amendment No. 1, File No. 333-230143, filed
	Securities (USA) LLC and The Northwestern	August 30, 2019
	Mutual Life Company

(i)	Not Applicable

(j)(a)	Shareholder Information Agreement dated	Exhibit (j)(a) to Form N-6 Post-Effective
	April 13, 2007 among Russell Investment	Amendment No. 7 for Northwestern Mutual
	Management Company on behalf of Russell	Variable Life Account II, File No. 333-136124,
	Investment Funds and The Northwestern Mutual	filed April 26, 2012
	Life Insurance Company

(j)(b)	Amendment No. 1 dated October 20, 2008 to	Exhibit (j)(b) to Form N-6 Post-Effective
	Shareholder Information Agreement dated	Amendment No. 7 for Northwestern Mutual
	April 13, 2007 among Russell Fund Services	Variable Life Account II, File No. 333-136124,
	Company on behalf of Russell Investment Funds	filed April 26, 2012
	and The Northwestern Mutual Life Insurance
	Company

(j)(c)	Shareholder Information Agreement dated	Exhibit (j)(c) to Form N-6 Post-Effective
	April 13, 2007 among Fidelity Distributors	Amendment No. 7 for Northwestern Mutual
	Corporation on behalf of Fidelity ® Variable	Variable Life Account II, File No. 333-136124,
	Insurance Products Fund and The Northwestern	filed April 26, 2012
	Mutual Life Insurance Company

(j)(d)	Shareholder Information Agreement dated	Exhibit (j)(d) to Form N-6 Post-Effective
	April 16, 2007 among Northwestern Mutual	Amendment No. 7 for Northwestern Mutual
	Series Fund, Inc. and The Northwestern Mutual	Variable Life Account II, File No. 333-136124,
	Life Insurance Company	filed April 26, 2012

(j)(e)	Shareholder Information Agreement dated	Exhibit (j)(e) to Form N-6 Post-Effective
	October 16, 2007 among Neuberger Berman	Amendment No. 7 for Northwestern Mutual
	Management Inc. and The Northwestern Mutual	Variable Life Account II, File No. 333-136124,
	Life Insurance Company	filed April 26, 2012

(j)(f)	Shareholder Information Agreement dated	Exhibit (j)(f) to Form N-6 Post-Effective
	September 27, 2013 among Credit Suisse	Amendment No. 10 for Northwestern Mutual
	Securities (USA) LLC and The Northwestern	Variable Life Account II, File No. 333-136124,
	Mutual Life Insurance Company	filed on October 1, 2013

(j)(g)	Power of Attorney	Filed herewith

(j)(h)	NMIS/NM Annuity Operations Admin	Exhibit (b)(8)(i) to Form N-4 Post-Effective
	Agreement	Amendment No. 19 for NML Variable Annuity
		Account A, File No. 333-72913, filed on April 22,
		2008

(k)	Opinion and Consent	Filed herewith

(l)	Not Applicable

C-4

(m)	Not Applicable

(n)	Consent of PricewaterhouseCoopers LLP	Filed herewith

(o)	Not Applicable

(p)	Not Applicable

(q)	Memorandum describing Issuance, Transfer and	Filed herewith
	Redemption Procedures

Item 27. Directors and Officers of the Depositor

The following lists include all of the Trustees, executive officers and other officers of The Northwestern Mutual Life Insurance Company without regard to their activities relating to variable life insurance policies or their authority to act or their status as "officers" as that term is used for certain purposes of the federal securities laws and rules thereunder.

TRUSTEES – As of April 1, 2020
Name	Address
John N. Balboni	Retired Senior Vice President & CIO
	International Paper
	105 E. Goodwyn
	Memphis, TN 38111
Nicholas E. Brathwaite	Co-Found & Partner
	Riverwood Capital
	2494 Sand Hill Road
	Building 7, Suite 100
	Menlo Park, CA 94025
David J. Drury	Founding Partner
	Wing Capital Group
	330 S. Executive Drive,Suite 209
	Brookfield, WI 53005
P. Russell Hardin	President
	Robert W. Woodruff Foundation
	191 Peachtree Street NE, Suite 3540
	Atlanta, GA 30303
Hans Helmerich	Chairman
	Helmerich & Payne, Inc.
	1437 S. Boulder Avenue
	Tulsa, OK 74119
Dale E. Jones	CEO & President
	Diversified Search
	1200 New Hampshire Avenue, NW
	Suite 820
	Washington, DC 20036
David J. Lubar	President & CEO
	Lubar & Co.
	833 E. Michigan Street
	Suite 1500
	Milwaukee, WI 53202
Randolph W. Melville	Retired Senior Vice President &
	General Manager West Division
	Frito-Lay North America
	C-5

	7901 Windrose Avenue, Unit 604
	Plano, TX 75024
Jaime Montemayor	Chief Digital and Technology Officer
	General Mills
	One General Mills Boulevard
	Minneapolis, MN 55426
Anne M. Paradis	Retired CEO
	MicroTek, Inc.
	72 Reservation Road
	Sunderland, MA 01375
John E. Schlifske	Chairman, President & CEO
	Northwestern Mutual
	720 E. Wisconsin Avenue
	Milwaukee, WI 53202
Aarti Shah	Senior Vice President,
	Chief Information & Digital Officer
	Eli Lilly
	Lilly Corporate Center
	Indianapolis, IN 46285
Mary Ellen Stanek	Managing Director & Director of Asset Management
	Baird Advisors
	Robert W. Baird & Co.
	President-Baird Funds Inc.
	777 E. Wisconsin Avenue
	21st Floor
	Milwaukee, WI 53202
S. Scott Voynich	Managing Partner
	Robinson, Grimes & Company, PC
	5637 Whitesville Road
	P. O. Box 4299
	Columbus, GA 31914
Ralph A. Weber	Founding Member
	Gass, Weber, Mullins, LLC
	241 N. Broadway
	Suite 300
	Milwaukee, WI 53202
Benjamin F. Wilson	Chairman
	Beveridge & Diamond, P.C.
	1350 I Street, NW
	Suite 700
	Washington, DC 20005
Juan C. Zarate	Chairman & Co-Founder
	Financial Integrity Network
	1919 M Street, NW, Suite 200
	Washington, DC 20036

EXECUTIVE OFFICERS – As of April 1, 2020

John E. Schlifske

Chairman, President & Chief Executive Officer

C-6

Souheil Badran	Executive Vice President & Chief Operating Officer
Michael G. Carter	Executive Vice President, Chief Financial Officer & Chief Risk Officer
Timothy J. Gerend	Executive Vice President & Chief Distribution Officer
Aditi J. Gokhale	Executive Vice President & Chief Commercial Officer
John M. Grogan	Executive Vice President & Chief Product and Innovation Officer
Ronald P. Joelson	Executive Vice President & Chief Investment Officer
Todd M. Jones	Vice President & Controller
Raymond J. Manista	Executive Vice President; Chief Legal Officer, Chief Compliance
	Officer & Secretary
Christian W. Mitchell	Executive Vice President & Chief Customer Officer
Don J. Robertson	Executive Vice President & Chief Human Resources Officer
Neal Sample	Executive Vice President & Chief Information Officer

The business addresses for all of the executive officers and other officers is 720 East Wisconsin Avenue, Milwaukee, Wisconsin 53202.

Item 28. Persons Controlled By or Under Common Control with the Depositor or Registrant

The subsidiaries of The Northwestern Mutual Life Insurance Company ("Northwestern Mutual"), as of April 1, 2020 are shown below. In addition to the subsidiaries shown below, the following separate investment accounts (which include the Registrant) may be deemed to be either controlled by, or under common control with, Northwestern Mutual:

1.NML Variable Annuity Account A

2.NML Variable Annuity Account B

3.NML Variable Annuity Account C

4.Northwestern Mutual Variable Life Account

5.Northwestern Mutual Variable Life Account II

Northwestern Mutual Series Fund, Inc. (the "Funds"), shown below as a subsidiary of Northwestern Mutual, is an investment company, registered under the Investment Company Act of 1940, offering shares to the separate accounts identified above; and the shares of the Funds held in connection with certain of the accounts are voted by Northwestern Mutual in accordance with voting instructions obtained from the persons who own, or are receiving payments under, variable annuity contracts or variable life insurance policies issued in connection with the separate accounts, or in the same proportions as the shares which are so voted.

NORTHWESTERN MUTUAL CORPORATE STRUCTURE(1)

(as of April 1, 2020)

	Legal Entity Name	Domestic Jurisdiction	Owner %

Operating Subsidiaries

Mason Street Advisors, LLC(2)		Delaware	100.00
Northwestern Long Term Care Insurance Company(2)		Wisconsin	100.00
Northwestern Mutual Investment Management Company,		Delaware	100.00
LLC(2)
Northwestern Mutual Investment Services, LLC(2)		Wisconsin	100.00
Northwestern Mutual Wealth Management Company(2)		United States	100.00
All Other Subsidiaries

1838938 Alberta Ltd. (2)		Canada	100.00
1890 Maple, LLC(2)		Delaware	100.00
3412 Exchange, LLC(2)		Delaware	100.00
45East11(2)		Cayman Islands	100.00
777	North Van Buren Apartments, LLC(2)	Delaware	100.00
777	North Van Buren Condominium Association, Inc. (2)	Wisconsin	100.00
777	North Van Buren Parking, LLC(2)	Delaware	100.00
777	North Van Buren Retail, LLC(2)	Delaware	100.00
AFE Brentwood Park, LLC(2)		Delaware	100.00
	C-7

NORTHWESTERN MUTUAL CORPORATE STRUCTURE(1)

(as of April 1, 2020)

Legal Entity Name	Domestic Jurisdiction	Owner %

Amber, LLC(2)	Delaware	100.00
Artisan Garden Apartments, LLC(2)	Delaware	100.00
Baraboo, Inc.(2)	Delaware	100.00
Bayridge, LLC(2)	Delaware	100.00
BCC Cancer Venture, LP(2)	Delaware	100.00
Bishop Square, LLC(2)	Delaware	100.00
Bradford II SPE, LLC(2)	Delaware	100.00
Bradford Master Association Inc. (2)	North Carolina	100.00
Brandwine Distribution, LLC (2)	Delaware	100.00
Burgundy, LLC(2)	Delaware	100.00
Cedarstone, LLC(2)	Delaware	100.00
Chateau, LLC(2)	Delaware	100.00
Chelsea Ventures, LLC(2)	Maryland	100.00
C – Land Fund, LLC(2)	Delaware	100.00
Coral, Inc.(2)	Delaware	100.00
Cortona Holdings, LLC(2)	Delaware	100.00
Cream City Venture Capital, LLC(2)	Delaware	100.00
Crosland Greens, LLC(2)	North Carolina	100.00
Dortmund, LLC(2)	Delaware	100.00
Fairfield Potomac Club, LLC(2)	Delaware	100.00
FB #2, LLC(2)	Maryland	100.00
FES, LLC(2)	Delaware	100.00
GRO, LLC(2)	Delaware	100.00
GRO-SUB, LLC(2)	Delaware	100.00
Hamptons PBG, LLC (2)	Delaware	100.00
Hazel, Inc.(2)	Delaware	100.00
Higgins, Inc.(2)	Delaware	100.00
Hobby, Inc.(2)	Delaware	100.00
Hollenberg 1, Inc.(2)	Delaware	100.00
Kristiana International Sales, Inc.(2)	U.S. Virgin Islands	100.00
Logan, Inc.(2)	Delaware	100.00
Los Alamitos Corporate Center Joint Venture, LLC(2)	California	100.00
Maroon, Inc.(2)	Delaware	100.00
Mason & Marshall, Inc.(2)	Delaware	100.00
Millbrook Apartments Associates L.L.C.(2)	Virginia	100.00
Model Portfolios, LLC(2)	Delaware	100.00
MPC Park 27 Industrial, LLC(2)	Florida	100.00
Network Office Cashiership, LLC(2)	Delaware	100.00
Nicolet, Inc.(2)	Delaware	100.00
NM BSA, LLC(2)	Delaware	100.00
NM Cancer Center GP, LLC(2)	Delaware	100.00
NM Career Distribution Holdings, LLC(2)	Delaware	100.00
NM DFW Lewisville, LLC(2)	Delaware	100.00
NM Gen, LLC(2)	Delaware	100.00
NM GP Holdings, LLC(2)	Delaware	100.00
NM Green, LLC(2)	Delaware	100.00
NM Harrisburg, Inc.(2)	Pennsylvania	100.00
NM Imperial, LLC(2)	Delaware	100.00
NM Investment Holdings, LLC.(2)	Delaware	100.00
NM Lion, LLC(2)	Delaware	100.00

C-8

NORTHWESTERN MUTUAL CORPORATE STRUCTURE(1)

(as of April 1, 2020)

Legal Entity Name	Domestic Jurisdiction	Owner %

NM Majestic Holdings, LLC(2)	Delaware	100.00
NM Neptune, LLC(2)	Delaware	100.00
NM Pebble Valley LLC(2)	Delaware	100.00
NM QOZ Fund, LLC(2)	Delaware	100.00
NM RE Funds, LLC(2)	Delaware	100.00
NM Regal, LLC(2)	Delaware	100.00
NM Twin Creeks GP, LLC(2)	Delaware	100.00
NMC V Equity Fund, LP(2)	Delaware	100.00
NMC V Mezz Fund, LP	Delaware	100.00

NMC V GP, LLC(2)	Delaware	100.00
NM-Hemlock, LLC(2)	Delaware	100.00
NM-Jasper, Inc. (2)	Delaware	100.00
NM-Morristown, LLC(2)	Delaware	100.00
NM-RESA, LLC(2)	Delaware	100.00
NM-Pulse, LLC(2)	Delaware	100.00
NM-SAS, LLC(2)	Delaware	100.00
NM-Skye, LLC(2)	Delaware	100.00
NM-West Hartford, LLC(2)	Delaware	100.00
NML Development Corporation(2)	Delaware	100.00
NML Real Estate Holdings, LLC(2)	Wisconsin	100.00
NML Securities Holdings, LLC(2)	Wisconsin	100.00
NMLSP1, LLC(2)	Delaware	100.00
NMRM Holdings, LLC(2)	Delaware	100.00
North Van Buren, Inc.(2)	Delaware	100.00
Northwestern Broadway Plaza, LLC(2)	Delaware	100.00
Northwestern Ellis Company(2)	Nova Scotia	100.00
Northwestern Mutual Capital GP II, LLC(2)	Delaware	100.00
Northwestern Mutual Capital GP III, LLC(2)	Delaware	100.00
Northwestern Mutual Capital GP IV, LLC(2)	Delaware	100.00
Northwestern Mutual Capital GP V, LLC(2)	Delaware	100.00
Northwestern Mutual Capital GP, LLC(2)	Delaware	100.00
Northwestern Mutual Capital Mezzanine Fund II, LP(2)	Delaware	100.00
Northwestern Mutual Capital Mezzanine Fund III, LP(2)	Delaware	100.00
Northwestern Mutual Capital Mezzanine Fund IV, LP(2)	Delaware	100.00
Northwestern Mutual Capital Strategic Equity Fund II, LP(2)	Delaware	100.00
Northwestern Mutual Capital Strategic Equity Fund III, LP(2)	Delaware	100.00
Northwestern Mutual Capital Strategic Equity Fund IV, LP(2)	Delaware	100.00
Northwestern Mutual Life Clubs Associated, Inc.(2)	Wisconsin	100.00
Northwestern Mutual MU TLD Registry, LLC(2)	Delaware	100.00
Northwestern Mutual Registry, LLC(2)	Delaware	100.00
Northwestern Mutual Series Fund, Inc.(3)	Maryland	100.00
NorthWoods Phase I, LLC(2)	Delaware	100.00
NorthWoods Phase II, LLC(2)	Delaware	100.00
NWM ZOM GP, LLC(2)	Delaware	100.00
NYLV, LLC(2)	Delaware	100.00
Osprey Links Golf Course, LLC(2)	Delaware	100.00
Osprey Links, LLC(2)	Delaware	100.00
Plantation Oaks MHC-NM, LLC(2)	Delaware	100.00
RE Corp.(2)	Delaware	100.00
Regency NM Johns Creek, LLC(2)	Delaware	100.00

C-9

NORTHWESTERN MUTUAL CORPORATE STRUCTURE(1)

(as of April 1, 2020)

Legal Entity Name	Domestic Jurisdiction	Owner %

Regina International Sales, Inc.(2)	U.S. Virgin Islands	100.00
Ruhl Financial Group, LLC(2)	Delaware	100.00
Russet, Inc.(2)	Delaware	100.00
Scotty, LLC(2)	Delaware	100.00
Seattle Network Office, LLC(2)	Delaware	100.00
Stadium and Arena Management, Inc.(2)	Delaware	100.00
Tapestry Condominium Owners Association, Inc. (2)	Tennessee	100.00
Tupelo, Inc.(2)	Delaware	100.00
Two Con Holdings, LLC(2)	Delaware	100.00
Two Con SPE, LLC(2)	Delaware	100.00
Two Con, LLC(2)	Delaware	100.00
Ventura Lakes MHC-NM, LLC(2)	Delaware	100.00
Walden OC, LLC(2)	Delaware	100.00
West Huron Joint Venture(2)	Washington	100.00
White Oaks, Inc.(2)	Delaware	100.00

(1)Certain subsidiaries are omitted on the basis that, considered in the aggregate at year end 2018, they did not constitute a significant subsidiary as defined by Regulation S-X. Certain investment partnerships and limited liability companies that hold real estate assets of The Northwestern Mutual Life Insurance Company are not represented.

(2)Subsidiary included in the consolidated financial statements.

(3)Northwestern Mutual Series Fund, Inc. consists of 27 series of capital stock, each a separate investment portfolio (the "Portfolios"). The Portfolios consist of: Growth Stock Portfolio, Focused Appreciation Portfolio, Large Cap Core Stock Portfolio, Large Cap Blend Portfolio, Index 500 Stock Portfolio, Large Company Value Portfolio, Domestic Equity Portfolio, Equity Income Portfolio, Mid Cap Growth Stock Portfolio, Index 400 Stock Portfolio, Mid Cap Value Portfolio, Small Cap Growth Stock Portfolio, Index 600 Stock Portfolio, Small Cap Value Portfolio, International Growth Portfolio, Research International Core Portfolio, International Equity Portfolio, Emerging Markets Equity Portfolio, Government Money Market Portfolio, Short-Term Bond Portfolio, Select Bond Portfolio, Long-Term U.S. Government Bond Portfolio, Inflation Protection Portfolio, High Yield Bond Portfolio, Multi-Sector Bond Portfolio, Balanced Portfolio, Asset Allocation Portfolio.

Item 29. Indemnification

(a)That portion of the By-laws of the Depositor, Northwestern Mutual, relating to indemnification of Trustees and officers is set forth in full in Article VII of the By-laws of Northwestern Mutual, amended by resolution and previously filed as Exhibit A(6)(b) to the registration statement of Northwestern Mutual Variable Life Account (File No. 333-59103) on July 15, 1998.

(b)Section 10 of the Distribution Agreement dated May 1, 2006 between Northwestern Mutual and Northwestern Mutual Investment Services, LLC ("NMIS") provides substantially as follows:

B.Indemnification by Company. The Company agrees to indemnify, defend and hold harmless NMIS, its successors and assigns, and their respective officers, directors, and employees (together referred to as "NMIS Related Persons"), from any and all joint or several losses, claims, damages or liabilities (including any reasonable investigative, legal and other expenses incurred in connection with, and any amounts paid in settlement of, any action, suit or proceeding or any claim asserted), to which NMIS and/or any NMIS Related Persons may become subject, under any law, regulation or NASD rule, at common law or otherwise, that arises out of or are based upon (i) any breach of this Agreement by the Company and (ii) any untrue statement of or omission to state a material fact (except for information supplied by or on behalf of NMIS or for which NMIS is

C-10

responsible) contained in any Registration Statement, Contract prospectus, SAI or supplement thereto or in any Marketing Material.

This indemnification shall be in addition to any liability that the Company may otherwise have; provided, however, that no person shall be entitled to indemnification pursuant to this provision for any loss, claim, damage or liability due to the willful misfeasance, bad faith or gross negligence or reckless disregard of duty by the person seeking indemnification.

C.Indemnification by NMIS. NMIS agrees to indemnify, defend and hold harmless the Company, its successors and assigns, and their respective officers, trustees or directors, and employees (together referred to as "Company Related Persons"), from any and all joint or several losses, claims, damages or liabilities (including any reasonable investigative, legal and other expenses incurred in connection with, and any amounts paid in settlement of, any action, suit or proceeding or any claim asserted), to which the Company and/or any Company Related Persons may become subject, under any law, regulation or NASD rule, at common law or otherwise, that arises out of or are based upon (i) any breach of this Agreement by NMIS and (ii) any untrue statement of or omission to state a material fact (except for information supplied by or on behalf of the Company or for which the Company is responsible) contained in any Registration Statement, Contract prospectus, SAI or supplement thereto or in any Marketing Material, in each case to the extent, but only to the extent, that such untrue statement or alleged untrue statement or omission or alleged omission was made in reliance upon information furnished in writing by NMIS to the Company specifically for use in the preparation of the aforesaid material.

This indemnification shall be in addition to any liability that NMIS may otherwise have; provided however, that no person shall be entitled to indemnification pursuant to this provision for any loss, claim, damage or liability due to the willful misfeasance, bad faith or gross negligence or reckless disregard of duty by the person seeking indemnification.

D.Indemnification Generally. Any person seeking indemnification under this section shall promptly notify the indemnifying party in writing after receiving notice of the commencement of any action as to which a claim for indemnification will be made; provided, however, that failure to so notify the indemnifying party shall not relieve such party from any liability which it may have to such person otherwise than on account of this section.

The indemnifying party shall be entitled to participate in the defense of the indemnified person but such participation will not relieve such indemnifying party of the obligation to reimburse the indemnified party for reasonable legal and other expenses incurred by such party in defending himself, herself or itself.

Item 30. Principal Underwriters

(a)NMIS is the principal underwriter of the securities of the Registrant. NMIS is also the principal underwriter for the NML Variable Annuity Account A (811-21887), the NML Variable Annuity Account B (811- 1668), the NML Variable Annuity Account C (811-21886), and the Northwestern Mutual Variable Life Account II (811-21933).

(b)As of February 18, 2020, the directors and officers of NMIS are as follows:

Name	Position
Lori M. Brissette	Vice President, Insurance and Annuity Client Services
Bradley L. Eull	Secretary
Don P. Gehrke	Vice President, Retail Investment Operations, Chief Operations Officer
Timothy J. Gerend	Executive Vice President, Chief Distribution Officer
Dean Hopp	Vice President, IPS Investment Programs
Fred Jambukeswaran	Chief Technology Officer
Susan Limbach	Assistant Treasurer
Kelly L. Martin	Treasurer and Financial and Operations Principal
Mark McNulty	NMIS Anti-Money Laundering Officer
Fawaz Rasheed	Chief Information Security Officer
John C. Roberts	Vice President, Distribution Performance
Sarah R. Schneider	Vice President, New Business
Eva Marie Schoenborn	President and Chief Executive Officer
David W. Simbro	Senior Vice President, Life, Annuity and Product Solutions
	C-11

Justin Stipan	Senior Director Training and Implementation
Rebecca L. Sujecki	Assistant Treasurer
William H. Taylor	Vice President, Financial Planning and Sales
Rebecca Villegas	Vice President, NMIS Compliance, Chief Compliance Officer
Alan M. Werth	Third Party Sales Consultant
Becki Williams	Vice President, Advanced Markets
Terry R. Young	Assistant Secretary

The address for each director and officer of NMIS is 720 East Wisconsin Avenue, Milwaukee, Wisconsin 53202.

(c)NMIS, the principal underwriter, received $834,668 of commissions and other compensation, directly or indirectly, from Registrant during the last fiscal year.

Item 31. Location of Accounts and Records

All accounts, books or other documents required to be maintained in connection with the Registrant's operations are maintained in the physical possession of Northwestern Mutual at 720 East Wisconsin Avenue, Milwaukee, Wisconsin 53202.

Item 32. Management Services

There are no management-related service contracts, other than those referred to in Part A or Part B of this Registration Statement, under which management-related services are provided to the Registrant and pursuant to which total payments of $5,000 or more were made during any of the last three fiscal years.

Item 33. Fee Representation

The Northwestern Mutual Life Insurance Company hereby represents that the fees and charges deducted under the variable life insurance policies which are the subject of 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 the insurance company under the policies.

C-12

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, and the Investment Company Act of 1940, the Registrant, Northwestern Mutual Variable Life Account, certifies that it meets all of the requirements for effectiveness of this Amended Registration pursuant to Rule 485(b) under the Securities Act of 1933 and has duly caused this Amended Registration Statement to be signed on its behalf, in the City of Milwaukee, and State of Wisconsin, on the 29th day of April, 2020.

NORTHWESTERN MUTUAL VARIABLE LIFE

ACCOUNT (Registrant)

By THE NORTHWESTERN MUTUAL LIFE

INSURANCE COMPANY (Depositor)

By: /s/ JOHN E. SCHLIFSKE

John E. Schlifske,

Chairman and Chief Executive Officer

Pursuant to the requirements of the Securities Act of 1933, this Amended Registration Statement has been signed by the Depositor on the 29th day of April, 2020.

THE NORTHWESTERN MUTUAL LIFE

INSURANCE COMPANY (Depositor)

By: /s/ JOHN E. SCHLIFSKE

John E. Schlifske,

Chairman and Chief Executive Officer

Pursuant to the requirements of the Securities Act of 1933, this Amended Registration Statement has been signed below by the following persons in the capacities with the Depositor and on the dates indicated:

Signature

/s/ JOHN E. SCHLIFSKE John E. Schlifske

/s/ MICHAEL G. CARTER Michael G. Carter

/s/ TODD JONES Todd Jones

Title

Chairman, Trustee and

Chief Executive Officer;

Principal Executive Officer

Executive Vice President and

Chief Financial Officer;

Principal Financial Officer

Vice President and Controller; Principal Accounting Officer

C-13

/s/ John N. Balboni*	Trustee
John N. Balboni
/s/ Nicholas E. Brathwaite*	Trustee
Nicholas E. Brathwaite
/s/ David J. Drury*	Trustee
David J. Drury
/s/ P. Russell Hardin*	Trustee
P. Russell Hardin
/s/ Hans Helmerich*	Trustee
Hans Helmerich
/s/ Dale E. Jones*	Trustee
Dale E. Jones
/s/ David J. Lubar*	Trustee
David J. Lubar
/s/Jaime Montemayor*	Trustee
Jaime Montemayor
/s/ Anne M. Paradis*	Trustee
Anne M. Paradis
/s/ John E. Schlifske*	Trustee
John E. Schlifske
	Trustee
Artie Shah
/s/ Mary Ellen Stanek*	Trustee
Mary Ellen Stanek
/s/ S. Scott Voynich*	Trustee
S. Scott Voynich
/s/ Ralph A. Weber*	Trustee
Ralph A. Weber
/s/ Benjamin F. Wilson*	Trustee
Benjamin F. Wilson

*By: /s/ JOHN E. SCHLIFSKE

John E. Schlifske, Attorney in fact,

pursuant to the Power of Attorney filed herewith.

Each of the signatures is affixed as of April 29, 2020.

C-14

EXHIBIT INDEX

EXHIBITS FILED WITH FORM N-6

POST-EFFECTIVE AMENDMENT NO. 50 TO

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

FOR

NORTHWESTERN MUTUAL VARIABLE LIFE ACCOUNT

Exhibit	Description
(j)(g)	Power of Attorney	Filed herewith
(k)	Opinion and Consent of Chris K. Gawart, Esq.	Filed herewith
(n)	Consent of PricewaterhouseCoopers LLP	Filed herewith
(q)	Memorandum describing Issuance, Transfer and Redemption Procedures	Filed herewith

C-15