-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, OjduTNM6YU0H9V096ajCO8gj5mPDEFBEpC+SsNqcch+taqgEqnz6bMss7ybus2DS Ov7RCTygq3YgMUzs1y5tcA== 0000945094-00-000239.txt : 20000503 0000945094-00-000239.hdr.sgml : 20000503 ACCESSION NUMBER: 0000945094-00-000239 CONFORMED SUBMISSION TYPE: 485APOS PUBLIC DOCUMENT COUNT: 6 FILED AS OF DATE: 20000502 FILER: COMPANY DATA: COMPANY CONFORMED NAME: NORTHBROOK VARIABLE ANNUITY ACCOUNT II CENTRAL INDEX KEY: 0000864922 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] STATE OF INCORPORATION: IL FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 485APOS SEC ACT: SEC FILE NUMBER: 033-35412 FILM NUMBER: 616236 FILING VALUES: FORM TYPE: 485APOS SEC ACT: SEC FILE NUMBER: 811-06116 FILM NUMBER: 616237 BUSINESS ADDRESS: STREET 1: 3100 SANDERS RD STREET 2: C/O NORTHBROOK LIFE INSURANCE CO CITY: NORTHBROOK STATE: IL ZIP: 60062 BUSINESS PHONE: 8474022400 MAIL ADDRESS: STREET 1: 3100 SANDERS RD CITY: NORTHBROOK STATE: IL ZIP: 60062 485APOS 1 MSDWVAIII As filed with the Securities and Exchange Commission on May 1, 2000 -------------------------------------------------------------------------- FILE NOS. 33-35412 811-6116 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM N-4 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 PRE-EFFECTIVE AMENDMENT NO. __ POST-EFFECTIVE AMENDMENT NO. 26 /X/ AND/OR REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 AMENDMENT NO. 30 /X/ NORTHBROOK VARIABLE ANNUITY ACCOUNT II (Exact Name of Registrant) NORTHBROOK LIFE INSURANCE COMPANY (Name of Depositor) NORTHBROOK LIFE INSURANCE COMPANY 3100 SANDERS ROAD NORTHBROOK, ILLINOIS 60062 847/402-2400 (Address and Telephone Number of Depositor's Principal Offices) MICHAEL J. VELOTTA VICE PRESIDENT, SECRETARY AND GENERAL COUNSEL NORTHBROOK LIFE INSURANCE COMPANY 3100 SANDERS ROAD NORTHBROOK, ILLINOIS 60062 847/402-2400 (Name, Complete Address and Telephone Number of Agent for Service) COPIES TO: BRUCE A. TEICHNER, ESQ. DANIEL J. FITZPATRICK, ESQ. ALLSTATE LIFE INSURANCE COMPANY MORGAN STANLEY DEAN WITTER 3100 SANDERS ROAD, SUITE J5B TWO WORLD TRADE CENTER NORTHBROOK, ILLINOIS 60062 NEW YORK, NEW YORK 10048 Approximate date of proposed public offering: continuous It is proposed that this filing will become effective (check appropriate box): [ ] immediately upon filing pursuant to paragraph (b) of Rule 485 [X] on May 1, 2000 pursuant to paragraph (b) of Rule 485 [ ] 60 days after filing pursuant to paragraph (a)(1) of Rule 485 [ ] on (date) pursuant to paragraph (a)(1) of Rule 485 If appropriate, check the following box: [ ] this post-effective amendment designates a new effective date for a previously filed post-effective amendment. Title of Securities Being Registered: Units of interest in the Northbrook Variable Annuity Account II under deferred variable annuity contracts. Explanatory Note Registrant is filing this post-effective amendment (Amendment) for the purpose of updating the prospectus and statement of additional information, and adding exhibits related to Morgan Stanley Dean Witter Variable Annuity 3. The Amendment is not intended to amend or delete any part of the Registration Statement, except as specifically noted herein. MORGAN STANLEY DEAN WITTER VARIABLE ANNUITY 3 NORTHBROOK LIFE INSURANCE COMPANY PROSPECTUS DATED P.O. BOX 94040 May 1, 2000 PALATINE, IL 60094 TELEPHONE NUMBER: 1-800-654-2397 - -------------------------------------------------------------------------------- Northbrook Life Insurance Company ("Northbrook") is offering the Morgan Stanley Dean Witter Variable Annuity 3, an individual and group flexible premium deferred variable annuity contract ("Contract"). This prospectus contains information about the Contract that you should know before investing. Please keep it for future reference. The Contract offers 35 investment alternatives ("investment alternatives"). The investment alternatives include 4 fixed account options ("Fixed Account Options") and 31 variable sub-accounts ("Variable Sub-Accounts") of the Northbrook Variable Annuity Account II ("Variable Account"). Each Variable Sub-Account invests exclusively in shares of portfolios ("Portfolios") of the following mutual funds ("Funds"): - MORGAN STANLEY DEAN WITTER VARIABLE INVESTMENT SERIES (CLASS Y SHARES) - THE UNIVERSAL INSTITUTIONAL FUND, INC.* - VAN KAMPEN LIFE INVESTMENT TRUST - AIM VARIABLE INSURANCE FUNDS - ALLIANCE VARIABLE PRODUCTS SERIES FUND (CLASS B SHARES) - PUTNAM VARIABLE TRUST (CLASS IB SHARES) *Formerly the Morgan Stanley Dean Witter Universal Funds, Inc. We (Northbrook) have filed a Statement of Additional Information, dated May 1, 2000, with the Securities and Exchange Commission ("SEC"). It contains more information about the Contract and is incorporated herein by reference, which means that it is legally a part of this prospectus. Its table of contents appears on page __ of this prospectus. For a free copy, please write or call us at the address or telephone number above, or go to the SEC's Web site (http://www.sec.gov). You can find other information and documents about us, including documents that are legally a part of this prospectus, at the SEC's Web site. - ------------------------------------------------------------------------------- THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED THE SECURITIES DESCRIBED IN THIS PROSPECTUS, NOR HAS IT PASSED ON THE ACCURACY OR THE ADEQUACY OF THIS IMPORTANT PROSPECTUS. ANY ONE WHO TELLS YOU OTHERWISE IS COMMITTING A FEDERAL CRIME. IMPORTANT NOTICE INVESTMENT IN THE CONTRACTS INVOLVES INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF PRINCIPAL. TABLE OF CONTENTS PAGE - ---------------------------------------------------------------------------- OVERVIEW - ---------------------------------------------------------------------------- Important Terms - ---------------------------------------------------------------------------- The Contract At A Glance - ---------------------------------------------------------------------------- How the Contract Works - ---------------------------------------------------------------------------- Expense Table - ---------------------------------------------------------------------------- Financial Information - ---------------------------------------------------------------------------- CONTRACT FEATURES - ---------------------------------------------------------------------------- The Contract - ---------------------------------------------------------------------------- Purchase of Contracts - ---------------------------------------------------------------------------- Contract Value - ---------------------------------------------------------------------------- Investment Alternatives - ---------------------------------------------------------------------------- The Variable Sub-Accounts - ---------------------------------------------------------------------------- The Fixed Account Options - ---------------------------------------------------------------------------- Transfers - ---------------------------------------------------------------------------- Expenses - ---------------------------------------------------------------------------- Access to Your Money - ---------------------------------------------------------------------------- Income Payments - ---------------------------------------------------------------------------- Death Benefits - ---------------------------------------------------------------------------- OTHER INFORMATION - ---------------------------------------------------------------------------- More Information: - ---------------------------------------------------------------------------- Northbrook - ---------------------------------------------------------------------------- The Variable Account - ---------------------------------------------------------------------------- The Portfolios - ---------------------------------------------------------------------------- The Contract - ---------------------------------------------------------------------------- Qualified Plans - ---------------------------------------------------------------------------- Legal Matters - ---------------------------------------------------------------------------- Year 2000 - --------------------------------------------------------------------------- Taxes - ---------------------------------------------------------------------------- Performance Information - ---------------------------------------------------------------------------- STATEMENT OF ADDITIONAL INFORMATION TABLE OF CONTENTS IMPORTANT TERMS This prospectus uses a number of important terms that you may not be familiar with. The index below identifies the page that describes each term. The first use of each term in this prospectus appears in highlights. PAGE - --------------------------------------------------------- Accumulation Phase - --------------------------------------------------------- Accumulation Unit - --------------------------------------------------------- Accumulation Unit Value - --------------------------------------------------------- Annuitant - --------------------------------------------------------- Automatic Additions Program - --------------------------------------------------------- Automatic Portfolio Rebalancing Program - --------------------------------------------------------- Beneficiary - --------------------------------------------------------- Cancellation Period - --------------------------------------------------------- * Contract - --------------------------------------------------------- Contract Anniversary - --------------------------------------------------------- Contract Owner ("You") - --------------------------------------------------------- Contract Value - --------------------------------------------------------- Contract Year - --------------------------------------------------------- Death Benefit Anniversary - --------------------------------------------------------- Death Benefit Combination Option - --------------------------------------------------------- Dollar Cost Averaging - --------------------------------------------------------- Dollar Cost Averaging Fixed Account Options - --------------------------------------------------------- Due Proof of Death - --------------------------------------------------------- Fixed Account Options - --------------------------------------------------------- Funds - --------------------------------------------------------- Income and Death Benefit Combination Option 2 - --------------------------------------------------------- Income Benefit Combination Option 2 - --------------------------------------------------------- Income Plan - --------------------------------------------------------- Investment Alternatives - --------------------------------------------------------- Issue Date - --------------------------------------------------------- Northbrook ("We") - --------------------------------------------------------- Payout Phase - --------------------------------------------------------- Payout Start Date - --------------------------------------------------------- Performance Death Benefit Option - --------------------------------------------------------- Portfolios - --------------------------------------------------------- Qualified Contracts - --------------------------------------------------------- Right to Cancel - --------------------------------------------------------- SEC - --------------------------------------------------------- Settlement Value - --------------------------------------------------------- Systematic Withdrawal Program - --------------------------------------------------------- Valuation Date - --------------------------------------------------------- Variable Account - --------------------------------------------------------- Variable Sub-Account - --------------------------------------------------------- * If you purchase a group Contract, we will issue you a certificate that represents your ownership and that summarizes the provisions of the group Contract. References to "Contract" in this prospectus include certificates unless the context requires otherwise. In certain states the Contract is available only as a group Contract. THE CONTRACT AT A GLANCE - ------------------------------------------------------------------- The following is a snapshot of the Contract. Please read the remainder of this prospectus for more information. FLEXIBLE PAYMENTS You can purchase a Contract with an initial purchase payment of $1,000 or more. You can add to your Contract as often and as much as you like, but each payment must be at least $100. You must maintain a minimum account size of $500. - ------------------------------------------------------ RIGHT TO CANCEL You may cancel your Contract within 20 days of receipt or any longer period as your state may require ("Cancellation Period"). Upon cancellation, we will return your purchase payments adjusted, to the extent state and federal law permit, to reflect the investment experience of any amounts allocated to the Variable Account. - -------------------------------------------------------------------------------- EXPENSES You will bear the following expenses: - Total Variable Account annual fees equal to 1.35% of average daily net assets (1.48% if you select the Performance Death Benefit Option or 1.59% if you select the Death Benefit Combination Option, or 1.65% if you select the Income Benefit Combination Option 2 or 1.85% if you select the Income and Death Benefit Combination Option 2) - Annual contract maintenance charge of $35 (waived in certain cases) - Withdrawal charges ranging from 0% to 6% of purchase payment(s) withdrawn (with certain exceptions) - Transfer fee of $25 after the 12th transfer in any Contract Year (fee currently waived) - State premium tax (if your state imposes one) In addition, each Portfolio pays expenses that you will bear indirectly if you invest in a Variable Sub-Account. - ------------------------------------------------------------------------------- INVESTMENT ALTERNATIVES The Contract offers 35 investment alternatives including: - 4 Fixed Account Options (which credit interest at rates we guarantee) - 31 Variable Sub-Accounts investing in Portfolios offering professional money management by these investment advisers: o A I M ADVISORS, INC. o ALLIANCE CAPITAL MANAGEMENT, L.P. o MILLER ANDERSON & SHERRED, LLP o MORGAN STANLEY DEAN WITTER ADVISORS INC. o MORGAN STANLEY ASSET MANAGEMENT o PUTNAM INVESTMENT MANAGEMENT, INC. o VAN KAMPEN ASSET MANAGEMENT INC. To find out current rates being paid on the Fixed Account Options, or to find out how the Variable Sub-Accounts have performed, call us at 1-800-654-2397. - ------------------------------------------------------------------------------- SPECIAL SERVICES For your convenience, we offer these special services: - AUTOMATIC ADDITIONS PROGRAM - AUTOMATIC PORTFOLIO REBALANCING PROGRAM - DOLLAR COST AVERAGING PROGRAM - SYSTEMATIC WITHDRAWAL PROGRAM - -------------------------------------------------------------------------------- INCOME PAYMENTS You can choose fixed amount income payments, variable amount income payments or a combination of the two. You can receive your income payments in one of the following ways: - life income with guaranteed payments - joint and survivor life income - guaranteed payments for a specified period - -------------------------------------------------------------------------------- DEATH BENEFITS If you or the Annuitant dies before the Payout Start Date, we will pay the death benefit described in the Contract. We also offer death benefit options. - ---------------------------------------------------------------------------- TRANSFERS Before the Payout Start Date, you may transfer your Contract value ("Contract Value")among the investment alternatives, with certain restrictions. Transfers must be at least $100 or the total amount in the investment alternative, whichever is less. Transfers to an Guarantee Period of the Standard Fixed Account Option must be at least $500. We do not currently impose a fee upon transfers. We, however, reserve the right to charge $25 per transfer after the 12th transfer in each "Contract Year," which we measure from the date we issue your Contract or a Contract anniversary ("Contract Anniversary"). - ---------------------------------------------------------------------------- WITHDRAWALS You may withdraw some or all of your Contract Value at any time during the Accumulation Phase and during the Payout Phase in certain cases. In general, you must withdraw at least $500 at a time or the total amount in the investment alternative, if less. A 10% federal tax penalty may apply if you make a withdrawal before you are 59 1/2 years old. HOW THE CONTRACT WORKS - ------------------------------------------------------------------- The Contract basically works in two ways. First, the Contract can help you (we assume you are the "Contract Owner") save for retirement because you can invest in up to 35 investment alternatives and pay no federal income taxes on any earnings until you withdraw them. You do this during what we call the "Accumulation Phase" of the Contract. The Accumulation Phase begins on the date we issue your Contract (we call that date the "Issue Date") and continues until the Payout Start Date, which is the date we apply your money to provide income payments. During the Accumulation Phase you may allocate your purchase payments to any combination of the Variable Sub-Accounts and/or the Fixed Account Options. If you invest in any of the Fixed Account Options you will earn a fixed rate of interest that we declare periodically. If you invest in any of the Variable Sub-Accounts your investment return will vary up or down depending on the performance of the corresponding Portfolios. Second, the Contract can help you plan for retirement because you can use it to receive retirement income for life, and/or for a pre-set number of years, by selecting one of the income payment options (we call these "Income Plans") described on page __. You receive income payments during what we call the "Payout Phase" of the Contract, which begins on the Payout Start Date and continues until we make the last payment required by the Income Plan you select. During the Payout Phase, if you select a fixed amount income payment option, we guarantee the amount of your payments, which will remain fixed. If you select a variable amount income payment option, based on one or more of the Variable Sub-Accounts, the amount of your payments will vary up or down depending on the performance of the corresponding Portfolios. The amount of money you accumulate under your Contract during the Accumulation Phase and apply to an Income Plan will determine the amount of your income payments during the Payout Phase. The timeline below illustrates how you might use your Contract.
ISSUE ACCUMULATION PHASE PAYOUT START PAYOUT PHASE DATE DATE - --/---------------------/---------------------/-----------------------/----------------------------------- You buy You save for You elect to You can receive You can receive income a Contract retirement receive payments income payments for payments for life or receive a a set period or lump sum payment
As the Contract owner you exercise all of the rights and privileges provided by the Contract. If you die, any surviving Contract owner or, if there is none, the Beneficiary, will exercise the rights and privileges provided by the Contract. See "The Contract." In addition, if you die before the Payout Start Date, we will pay a death benefit to any surviving Contract owner or, if there is none, to your Beneficiary. See "Death Benefits." Please call us at 1-800-654-2397 if you have any question about how the Contract works. EXPENSE TABLE - ------------------------------------------------------------------- The table below lists the expenses that you will bear directly or indirectly when you buy a Contract. The table and the examples that follow do not reflect premium taxes that may be imposed by the state where you reside. For more information about Variable Account expenses, see "Expenses," below. For more information about Portfolio expenses, please refer to the accompanying prospectuses for the Funds. CONTRACT OWNER TRANSACTION EXPENSES Withdrawal Charge (as a percentage of purchase payments withdrawn)* Number of Complete Years Since We Received the Purchase Payment Being Withdrawn: 0 1 2 3 4 5 6+ Applicable Charge: 6% 5% 5% 4% 3% 2% 0% - ------------------------------------------------------------------------- Annual Contract Maintenance Charge $35** - ------------------------------------------------------------------------- Transfer Fee $25*** - ------------------------------------------------------------------------- * During each Contract Year you may withdraw up to 15% of the aggregate amount of purchase payments as of the beginning of the Contract Year without incurring a withdrawal charge. ** If your Contract Value equals or exceeds $40,000, we will waive the charge for the remaining time your Contract is in force. *** Applies solely to the thirteenth and all subsequent transfers within a Contract Year excluding transfers due to dollar cost averaging and automatic portfolio rebalancing. We are currently waiving the transfer fee. VARIABLE ACCOUNT ANNUAL EXPENSES (As A Percentage Of Average Daily Net Asset Value Deducted From Each Variable Sub-Account) Mortality and Expense Risk Charge 1.25%* - ------------------------------------------------------- Administrative Expense Charge 0.10% - ------------------------------------------------------- Total Variable Account Annual Expenses 1.35% - ------------------------------------------------------- * If you select the Performance Death Benefit Option, the mortality and expense risk charge is 1.38%. If you select the Death Benefit Combination Option, the mortality and expense risk charge is 1.49%. If you select the Income Benefit Combination Option 2, the mortality and expense risk charge is 1.55%. If you select the Income and Death Benefit Combination Option 2, the mortality and expense risk charge is 1.75%. PORTFOLIO ANNUAL EXPENSES (After Voluntary Reductions and Reimbursements) (as a percentage of Portfolio average daily net assets)(1) Management Other Total Portfolio Portfolio Fees Rule 12b-1 Fees Expenses Annual Expenses - -------------------------------------------------------------------------------------------------------------------------------- MORGAN STANLEY DEAN WITTER VARIABLE INVESTMENT SERIES (CLASS Y SHARES)(2) - -------------------------------------------------------------------------------------------------------------------------------- Money Market 0.50% 0.25% 0.02% 0.77% - -------------------------------------------------------------------------------------------------------------------------------- Quality Income Plus 0.50% 0.25% 0.02% 0.77% - -------------------------------------------------------------------------------------------------------------------------------- Short-Term Bond 0.45% 0.25% 0.17% 0.87% - -------------------------------------------------------------------------------------------------------------------------------- High Yield 0.50% 0.25% 0.03% 0.78% - -------------------------------------------------------------------------------------------------------------------------------- Utilities 0.64% 0.25% 0.03% 0.92% - -------------------------------------------------------------------------------------------------------------------------------- Income Builder 0.75% 0.25% 0.06% 1.06% - -------------------------------------------------------------------------------------------------------------------------------- Dividend Growth 0.51% 0.25% 0.01% 0.77% - -------------------------------------------------------------------------------------------------------------------------------- Aggressive Equity 0.42% 0.25% 0.10% 0.77% - -------------------------------------------------------------------------------------------------------------------------------- Capital Growth 0.65% 0.25% 0.07% 0.97% - -------------------------------------------------------------------------------------------------------------------------------- Global Dividend Growth 0.75% 0.25% 0.08% 1.08% - -------------------------------------------------------------------------------------------------------------------------------- European Growth 0.95% 0.25% 0.09% 1.29% - -------------------------------------------------------------------------------------------------------------------------------- Pacific Growth 0.95% 0.25% 0.47% 1.67% - -------------------------------------------------------------------------------------------------------------------------------- Equity 0.49% 0.25% 0.02% 0.76% - -------------------------------------------------------------------------------------------------------------------------------- S&P 500 Index(3) 0.39% 0.25% 0.09% 0.73% - -------------------------------------------------------------------------------------------------------------------------------- Competitive Edge "Best Ideas" 0.44% 0.25% 0.12% 0.81% - -------------------------------------------------------------------------------------------------------------------------------- Strategist 0.50% 0.25% 0.02% 0.77% - -------------------------------------------------------------------------------------------------------------------------------- THE UNIVERSAL INSTITUTIONAL FUND, INC.(4) - -------------------------------------------------------------------------------------------------------------------------------- Emerging Markets Equity 0.42% -- 1.37% 1.79% - -------------------------------------------------------------------------------------------------------------------------------- Equity Growth 0.29% -- 0.56% 0.85% - -------------------------------------------------------------------------------------------------------------------------------- International Magnum 0.29% -- 0.87% 1.16% - -------------------------------------------------------------------------------------------------------------------------------- Mid-Cap Value 0.43% -- 0.62% 1.05% - -------------------------------------------------------------------------------------------------------------------------------- U.S. Real Estate 0.00% -- 1.10% 1.10% - -------------------------------------------------------------------------------------------------------------------------------- VAN KAMPEN LIFE INVESTMENT TRUST(5) - -------------------------------------------------------------------------------------------------------------------------------- Emerging Growth 0.67% -- 0.18% 0.85% - -------------------------------------------------------------------------------------------------------------------------------- AIM VARIABLE INSURANCE FUNDS - -------------------------------------------------------------------------------------------------------------------------------- AIM V.I. Capital Appreciation Fund 0.62% -- 0.11% 0.73% - -------------------------------------------------------------------------------------------------------------------------------- AIM V.I. Growth Fund 0.63% -- 0.10% 0.73% - -------------------------------------------------------------------------------------------------------------------------------- AIM V.I. Value Fund 0.61% -- 0.15% 0.76% - -------------------------------------------------------------------------------------------------------------------------------- ALLIANCE VARIABLE PRODUCTS SERIES FUND(6) - -------------------------------------------------------------------------------------------------------------------------------- Growth Portfolio 0.75% 0.25% 0.12% 1.12% - -------------------------------------------------------------------------------------------------------------------------------- Growth and Income Portfolio 0.63% 0.25% 0.09% 0.97% - -------------------------------------------------------------------------------------------------------------------------------- Premier Growth Portfolio 1.00% 0.25% 0.04% 1.29% - -------------------------------------------------------------------------------------------------------------------------------- PUTNAM VARIABLE TRUST (CLASS IB SHARES) (7) - -------------------------------------------------------------------------------------------------------------------------------- Putnam VT Growth and Income Fund 0.46% 0.15% 0.04% 0.65% - -------------------------------------------------------------------------------------------------------------------------------- Putnam VT International Growth Fund 0.80% 0.15% 0.22% 1.17% - -------------------------------------------------------------------------------------------------------------------------------- Putnam VT Voyager Fund 0.53% 0.15% 0.04% 0.72% - --------------------------------------------------------------------------------------------------------------------------------
(1) Figures shown in the Table are for the year ended December 31, 1999, unless otherwise noted. (2) Class Y of the Morgan Stanley Dean Witter Variable Investment Series has a distribution plan or "Rule 12b-1" plan as described in that Fund's prospectus. Because no Class Y shares were issued as of December 31, 1999, figures (other than "12b-1 fees") are based on the expenses of th Fund's Class X shares for the fiscal year ended December 31, 1999, plus Class Y's maximum annual Rule 12b-1 fee of 0.25%. (3) Morgan Stanley Dean Witter Advisors Inc. has permanently undertaken to assume all expenses of the S&P 500 Index Portfolio (except for brokerage fees) and to waive the compensation provided in its management agreement with the Fund to the extent that such expenses and compensation on an annualized basis exceed .050% of the daily net assets of the S&P 500 Index Portfolio. (4) Morgan Stanley Asset Management has voluntarily agreed to a reduction in its management fees and to reimburse the Portfolios for which it acts as investment adviser for certain expenses of the Portfolios. Absent such reductions, the management fees, other expenses, and total annual Portfolio expenses would have been as follows: Management Fees Other Expenses Total Annual Portfolio Expenses Emerging Markets Equity 1.25% 1.37% 2.62% -------------------------------------------------------------------------------------------- Equity Growth 0.55% 0.56% 1.11% -------------------------------------------------------------------------------------------- International Magnum 0.80% 0.87% 1.67% -------------------------------------------------------------------------------------------- Mid-Cap Value 0.75% 0.62% 1.37% -------------------------------------------------------------------------------------------- U.S. Real Estate 0.80% 1.10% 1.90% (5) Van Kampen Asset Management Inc. has voluntarily agreed to a reduction in its management fees and to reimburse the Emerging Growth Portfolio for which it acts as investment adviser if such fees would cause "Total Portfolio Annual Expenses" to exceed the amount set forth in the table above. Absent such reductions, the management fees, other expenses, and total annual Portfolio expenses would have been 0.70%, 0.53%, and 1.23%, respectively. (6) Class B of the Alliance Variable Products Series Fund has a distribution plan or "Rule 12b-1 plan" as described in that Fund's prospectus. The Class B shares were first issued on July 14, 1999. (7) Figures shown in the table include amounts paid through expense offset and brokerage service arrangements.
EXAMPLE 1 The example below shows the dollar amount of expenses that you would bear directly or indirectly if you: - - invested $1,000 in a Variable Sub-Account, - - earned a 5% annual return on your investment, - - surrendered your Contract or you began receiving income payments for a specified period of less than 120 months at the end of each time period, and - - elected the Income and Death Benefit Combination Option 2. The Example Does Not Include Any Taxes or Tax Penalties You May Be Required To Pay If You Surrender Your Contract. Variable Sub-Account 1 Year 3 Years 5 Years 10 Years - ------------------------------------------------------------------------------------------------------------------------------ AIM VARIABLE INSURANCE FUNDS - ------------------------------------------------------------------------------------------------------------------------------ AIM V.I. Capital Appreciation $69 $115 $156 $294 - ------------------------------------------------------------------------------------------------------------------------------ AIM V.I. Growth $69 $115 $156 $294 - ------------------------------------------------------------------------------------------------------------------------------ AIM V.I. Value $69 $116 $157 $297 - ------------------------------------------------------------------------------------------------------------------------------ ALLIANCE VARIABLE PRODUCTS SERIES FUNDS - ------------------------------------------------------------------------------------------------------------------------------ Alliance Growth $73 $127 $175 $333 - ------------------------------------------------------------------------------------------------------------------------------ Alliance Growth and Income $73 $123 $168 $318 - ------------------------------------------------------------------------------------------------------------------------------ Alliance Premier Growth $75 $132 $184 $349 - ------------------------------------------------------------------------------------------------------------------------------ MORGAN STANLEY DEAN WITTER V.I.S - ------------------------------------------------------------------------------------------------------------------------------ Money Market $67 $109 $145 $273 - ------------------------------------------------------------------------------------------------------------------------------ Quality Income Plus $67 $109 $145 $273 - ------------------------------------------------------------------------------------------------------------------------------ Short-Term Bond $68 $112 $150 $283 - ------------------------------------------------------------------------------------------------------------------------------ High Yield $67 $109 $145 $274 - ------------------------------------------------------------------------------------------------------------------------------ Utilities $68 $113 $153 $288 - ------------------------------------------------------------------------------------------------------------------------------ Income Builder $70 $118 $160 $302 - ------------------------------------------------------------------------------------------------------------------------------ Dividend Growth $67 $109 $145 $273 - ------------------------------------------------------------------------------------------------------------------------------ Capital Growth $69 $115 $155 $293 - ------------------------------------------------------------------------------------------------------------------------------ Global Dividend Growth $70 $118 $161 $304 - ------------------------------------------------------------------------------------------------------------------------------ European Growth $72 $125 $171 $325 - ------------------------------------------------------------------------------------------------------------------------------ Pacific Growth $76 $136 $190 $361 - ------------------------------------------------------------------------------------------------------------------------------ Equity $67 $108 $144 $272 - ------------------------------------------------------------------------------------------------------------------------------ S&P 500 Index $66 $108 $143 $269 - ------------------------------------------------------------------------------------------------------------------------------ Competitive Edge "Best Ideas" $67 $110 $147 $277 - ------------------------------------------------------------------------------------------------------------------------------ Strategist $67 $109 $145 $273 - ------------------------------------------------------------------------------------------------------------------------------ Aggressive Equity $67 $109 $145 $273 - ------------------------------------------------------------------------------------------------------------------------------ THE UNIVERSAL INSTITUTIONAL FUND, INC. - ------------------------------------------------------------------------------------------------------------------------------ U.S. Real Estate $73 $126 $174 $331 - ------------------------------------------------------------------------------------------------------------------------------ International Magnum $73 $128 $177 $336 - ------------------------------------------------------------------------------------------------------------------------------ Equity Growth $70 $119 $162 $306 - ------------------------------------------------------------------------------------------------------------------------------ Emerging Markets Equity $80 $147 $208 $395 - ------------------------------------------------------------------------------------------------------------------------------ Mid-Cap Value $72 $125 $172 $326 - ------------------------------------------------------------------------------------------------------------------------------ PUTNAM VARIABLE TRUST - ------------------------------------------------------------------------------------------------------------------------------ Putnam VT Growth and Income $68 $113 $151 $286 - ------------------------------------------------------------------------------------------------------------------------------ Putnam VT International Growth $73 $129 $178 $337 - ------------------------------------------------------------------------------------------------------------------------------ Putnam VT Voyager $69 $115 $155 $293 - ------------------------------------------------------------------------------------------------------------------------------ VAN KAMPEN LIFE INVESTMENT TRUST - ------------------------------------------------------------------------------------------------------------------------------ Emerging Growth $70 $119 $162 $306 - ------------------------------------------------------------------------------------------------------------------------------
EXAMPLE 2 Same assumptions as Example 1 above, except that you decided not to surrender your Contract, or you began receiving income payments (for at least 120 months if under an Income Plan with a specified period), at the end of each period. Variable Sub-Account 1 Year 3 Years 5 Years 10 Years - ------------------------------------------------------------------------------------------------------------------------------ AIM VARIABLE INSURANCE FUNDS - ------------------------------------------------------------------------------------------------------------------------------ AIM V.I. Capital Appreciation $26 $81 $139 $294 - ------------------------------------------------------------------------------------------------------------------------------ AIM V.I. Growth $26 $81 $139 $294 - ------------------------------------------------------------------------------------------------------------------------------ AIM V.I. Value $27 $82 $140 $297 - ------------------------------------------------------------------------------------------------------------------------------ ALLIANCE VARIABLE PRODUCTS SERIES FUNDS - ------------------------------------------------------------------------------------------------------------------------------ Alliance Growth $30 $93 $158 $333 - ------------------------------------------------------------------------------------------------------------------------------ Alliance Growth and Income $29 $89 $151 $318 - ------------------------------------------------------------------------------------------------------------------------------ Alliance Premier Growth $32 $98 $167 $349 - ------------------------------------------------------------------------------------------------------------------------------ MORGAN STANLEY DEAN WITTER V.I.S - ------------------------------------------------------------------------------------------------------------------------------ Money Market $24 $75 $128 $273 - ------------------------------------------------------------------------------------------------------------------------------ Quality Income Plus $24 $75 $128 $273 - ------------------------------------------------------------------------------------------------------------------------------ Short-Term Bond $25 $78 $133 $283 - ------------------------------------------------------------------------------------------------------------------------------ High Yield $24 $75 $128 $274 - ------------------------------------------------------------------------------------------------------------------------------ Utilities $26 $79 $136 $288 - ------------------------------------------------------------------------------------------------------------------------------ Income Builder $27 $84 $143 $302 - ------------------------------------------------------------------------------------------------------------------------------ Dividend Growth $24 $75 $128 $273 - ------------------------------------------------------------------------------------------------------------------------------ Capital Growth $26 $81 $138 $293 - ------------------------------------------------------------------------------------------------------------------------------ Global Dividend Growth $27 $84 $144 $304 - ------------------------------------------------------------------------------------------------------------------------------ European Growth $30 $91 $154 $325 - ------------------------------------------------------------------------------------------------------------------------------ Pacific Growth $34 $102 $173 $361 - ------------------------------------------------------------------------------------------------------------------------------ Equity $24 $74 $127 $272 - ------------------------------------------------------------------------------------------------------------------------------ S&P 500 Index $24 $74 $126 $269 - ------------------------------------------------------------------------------------------------------------------------------ Competitive Edge "Best Ideas" $25 $76 $130 $277 - ------------------------------------------------------------------------------------------------------------------------------ Strategist $24 $75 $128 $273 - ------------------------------------------------------------------------------------------------------------------------------ Aggressive Equity $24 $75 $128 $273 - ------------------------------------------------------------------------------------------------------------------------------ THE UNIVERSAL INSTITUTIONAL FUND, INC. - ------------------------------------------------------------------------------------------------------------------------------ U.S. Real Estate $30 $92 $157 $331 - ------------------------------------------------------------------------------------------------------------------------------ International Magnum $31 $94 $160 $336 - ------------------------------------------------------------------------------------------------------------------------------ Equity Growth $28 $85 $145 $306 - ------------------------------------------------------------------------------------------------------------------------------ Emerging Markets Equity $37 $113 $191 $395 - ------------------------------------------------------------------------------------------------------------------------------ Mid-Cap Value $30 $91 $155 $326 - ------------------------------------------------------------------------------------------------------------------------------ PUTNAM VARIABLE TRUST - ------------------------------------------------------------------------------------------------------------------------------ Putnam VT Growth and Income $26 $79 $134 $286 - ------------------------------------------------------------------------------------------------------------------------------ Putnam VT International Growth $31 $95 $161 $337 - ------------------------------------------------------------------------------------------------------------------------------ Putnam VT Voyager $26 $81 $138 $293 - ------------------------------------------------------------------------------------------------------------------------------ VAN KAMPEN LIFE INVESTMENT TRUST - ------------------------------------------------------------------------------------------------------------------------------ Emerging Growth $28 $85 $145 $306 - ------------------------------------------------------------------------------------------------------------------------------
Please remember that you are looking at examples and not a representation of past or future expenses. Your actual expenses may be lower or greater than those shown above. Similarly, your rate of return may be lower or greater than 5%, which is not guaranteed. The above examples assume the election of the Income and Death Benefit Combination Option 2, with a mortality and expense risk charge of 1.75%. If that option were not elected, the expense figures shown above would be slightly lower. To reflect the contract maintenance charge in the examples, we estimated an equivalent percentage charge, based on an assumed average Contract size of $45,000. FINANCIAL INFORMATION - ------------------------------------------------------------------- To measure the value of your investment in the Variable Sub-Accounts during the Accumulation Phase we use a unit of measure we call the "Accumulation Unit." Each Variable Sub-Account has a separate value for its Accumulation Units we call the "Accumulation Unit Value." Accumulation Unit Value is analogous to, but not the same as, the share price of a mutual fund. There are no Accumulation Unit Values to report because the Contracts were first offered as of the date of this prospectus. The financial statements of the Variable Account and Northbrook appear in the Statement of Additional Information. THE CONTRACT - ------------------------------------------------------------------- CONTRACT OWNER The Variable Annuity 3 is a contract between you, the Contract owner, and Northbrook, a life insurance company. As the Contract owner, you may exercise all of the rights and privileges provided to you by the Contract. That means it is up to you to select or change (to the extent permitted): - the investment alternatives during the Accumulation and Payout Phases, - the amount and timing of your purchase payments and withdrawals, - the programs you want to use to invest or withdraw money, - the income payment plan you want to use to receive retirement income, - the Annuitant (either yourself or someone else) on whose life the income payments will be based, - the Beneficiary or Beneficiaries who will receive the benefits that the Contract provides when the last surviving Contract owner dies, and - any other rights that the Contract provides. If you die, any surviving Contract owner or, if none, the Beneficiar, will exercise the rights and privileges provided to them by the Contract. The Contract cannot be jointly owned by both a non-natural person and a natural person. The maximum owner issue age is age 90. You can use the Contract with or without a qualified plan. A "qualified plan" is a retirement savings plan, such as an IRA or tax-sheltered annuity, that meets the requirements of the Internal Revenue Code. Qualified plans may limit or modify your rights and privileges under the Contract. We use the term "Qualified Contract" to refer to a Contract used with a qualified plan. See "Qualified Plans" on page __. ANNUITANT The Annuitant is the individual whose life determines the amount and duration of income payments (other than under Income Plans with guaranteed payments for a specified period). The Annuitant must be a natural person. You initially designate an Annuitant in your application. If the Contract owner is a natural person, you may change the Annuitant at any time prior to the Payout Start Date. Once we receive your change request, any change will be effective at the time you sign the written notice. We are not liable for any payment we make or other action we take before receiving any written request from you. Before the Payout Start Date, you may designate a joint Annuitant, who is a second person on whose life income payments depend. If the Annuitant dies prior to the Payout Start Date, the new Annuitant will be the youngest Contract owner, otherwise, the youngest Beneficiary, unless the Contract owner names a different Annuitant. BENEFICIARY The Beneficiary is the person who may elect to receive the death benefit or become the new Contract owner if the sole surviving Contract owner dies before the Payout Start Date. If the sole surviving Contract owner dies after the Payout Start Date, the Beneficiary will receive any guaranteed income payments scheduled to continue. You may name one or more Beneficiaries when you apply for a Contract. You may change or add Beneficiaries at any time by writing to us, unless you have designated an irrevocable Beneficiary. We will provide a change of Beneficiary form to be signed and filed with us. Any change will be effective at the time you sign the written notice, whether or not the Annuitant is living when we receive the notice. Until we receive your written notice to change a Beneficiary, we are entitled to rely on the most recent Beneficiary information in our files. We will not be liable as to any payment or settlement made prior to receiving the written notice. Accordingly, if you wish to change your Beneficiary, you should deliver your written notice to us promptly. If you did not name a Beneficiary or, if the named Beneficiary is no longer living and there are no other surviving Beneficiaries, the new Beneficiary will be: - your spouse, if he or she is still alive, otherwise - your surviving children equally, or if you have no surviving children, - your estate. If more than one Beneficiary survives you, (or the Annuitant, if the Contract owner is not a natural person) we will divide the death benefit among your Beneficiaries according to your most recent written instructions. If you have not given us written instructions, we will pay the death benefit in equal amounts to the surviving Beneficiaries. MODIFICATION OF THE CONTRACT Only a Northbrook officer may approve a change in or waive any provision of the Contract. Any change or waiver must be in writing. None of our agents has the authority to change or waive the provisions of the Contract. We may not change the terms of the Contract without your consent, except to conform the Contract to applicable law or changes in the law. If a provision of the Contract is inconsistent with state law, we will follow state law. ASSIGNMENT We will not honor an assignment of an interest in a Contract as collateral or security for a loan. However, you may assign periodic income payments under the Contract prior to the Payout Start Date. No Beneficiary may assign benefits under the Contract until they are payable to the Beneficiary. We will not be bound by any assignment until the assignor signs it and files it with us. We are not responsible for the validity of any assignment. Federal law prohibits or restricts the assignment of benefits under many types of retirement plans and the terms of such plans may themselves contain restrictions on assignments. An assignment may also result in taxes or tax penalties. YOU SHOULD CONSULT WITH AN ATTORNEY BEFORE TRYING TO ASSIGN YOUR CONTRACT. PURCHASES - ------------------------------------------------------------------- MINIMUM PURCHASE PAYMENTS Your initial purchase payment must be at least $1,000. We may increase or decrease this minimum in the future. You may make additional purchase payments of at least $100 at any time prior to the Payout Start Date. We reserve the right to lower the minimum and limit the maximum amount of purchase payments we will accept. We also reserve the right to reject any application. AUTOMATIC ADDITIONS PROGRAM You may make subsequent purchase payments of at least $25 by automatically transferring amounts from your bank account or your Morgan Stanley Dean Witter Active Assets(TM) Account. Please consult your Morgan Stanley Dean Witter Financial Advisor for details. ALLOCATION OF PURCHASE PAYMENTS At the time you apply for a Contract, you must decide how to allocate your purchase payments among the investment alternatives. The allocation you specify on your application will be effective immediately. All allocations must be in whole percentages that total 100% or in whole dollars. The minimum you may allocate to any investment alternative is $100. The minimum amount that you may allocate to the Guarantee Periods is $500. You can change your allocations by notifying us in writing. We will allocate your purchase payments to the investment alternatives according to your most recent instructions on file with us. Unless you notify us in writing otherwise, we will allocate subsequent purchase payments according to the allocation for the previous purchase payment. We will effect any change in allocation instructions at the time we receive written notice of the change in good order. We will credit the initial purchase payment that accompanies your completed application to your Contract within 2 business days after we receive the payment at our headquarters. If your application is incomplete, we will ask you to complete your application within 5 business days. If you do so, we will credit your initial purchase payment to your Contract within that 5 business day period. If you do not, we will return your purchase payment at the end of the 5 business day period unless you expressly allow us to hold it until you complete the application. We will credit subsequent purchase payments to the Contract on the business day that we receive the purchase payment at our headquarters. We use the term "business day" to refer to each day Monday through Friday that the New York Stock Exchange is open for business. We also refer to these days as "Valuation Dates." If we receive your purchase payment after 3 p.m. Central Time on any Valuation Date, we will credit your purchase payment using the Accumulation Unit Values computed on the next Valuation Date. RIGHT TO CANCEL You may cancel the Contract within the Cancellation Period, which is the 20-day period after you receive the Contract or such longer period as your state may require. If you exercise this "Right To Cancel," the Contract terminates and we will pay you the full amount of your purchase payments allocated to the Fixed Account Options. We also will return your purchase payments allocated to the Variable Account after an adjustment, to the extent state or federal law permit, to reflect the investment gain or loss that occurred from the date of allocation through the date of cancellation. Some states may require us to return a greater amount to you. CONTRACT VALUE - ------------------------------------------------------------------- Your Contract Value at any time during the Accumulation Phase is equal to the sum of the value of your Accumulation Units in the Variable Sub-Accounts you have selected, plus the value of your investment in the Fixed Account Options. ACCUMULATION UNITS To determine the number of Accumulation Units of each Variable Sub-Account to allocate to your Contract, we divide (i) the amount of the purchase payment or transfer you have allocated to a Variable Sub-Account by (ii) the Accumulation Unit Value of that Variable Sub-Account next computed after we receive your payment or transfer. For example, if we receive a $10,000 purchase payment allocated to a Variable Sub-Account when the Accumulation Unit Value for the Sub-Account is $10, we would credit 1,000 Accumulation Units of that Variable Sub-Account to your Contract. Withdrawals and transfers from a Variable Sub-Account would, of course, reduce the number of Accumulation Units of that Sub-Account allocated to your Contract. ACCUMULATION UNIT VALUE As a general matter, the Accumulation Unit Value for each Variable Sub-Account will rise or fall to reflect: - changes in the share price of the Portfolio in which the Variable Sub-Account invests, and - the deduction of amounts reflecting the mortality and expense risk charge, administrative expense charge, and any provision for taxes that have accrued since we last calculated the Accumulation Unit Value. We determine contract maintenance charges, withdrawal charges and transfer fees (currently waived) separately for each Contract. They do not affect Accumulation Unit Value. Instead, we obtain payment of those charges and fees by redeeming Accumulation Units. For details on how we calculate Accumulation Unit Value, please refer to the Statement of Additional Information. We determine a separate Accumulation Unit Value for each Variable Sub-Account on each Valuation Date. We also determine a separate set of Accumulation Unit Values that reflect the cost of the Performance Death Benefit Option, a third set of Accumulation Unit Values that reflect the cost of the Death Benefit Combination Option, a fourth set of Accumulation Unit Values that reflect the cost of the Income Benefit Combination Option 2 and a fifth set of Accumulation Unit Values that reflect the cost of the Income and Death Benefit Combination Option 2. YOU SHOULD REFER TO THE PROSPECTUSES FOR THE FUNDS THAT ACCOMPANY THIS PROSPECTUS FOR A DESCRIPTION OF HOW THE ASSETS OF EACH PORTFOLIO ARE VALUED, SINCE THAT DETERMINATION DIRECTLY BEARS ON THE ACCUMULATION UNIT VALUE OF THE CORRESPONDING VARIABLE SUB-ACCOUNT AND, THEREFORE, YOUR CONTRACT VALUE. INVESTMENT ALTERNATIVES: THE VARIABLE SUB-ACCOUNTS - ------------------------------------------------------------------- You may allocate your purchase payments to up to 31 Variable Sub-Accounts. Each Variable Sub-Account invests in the shares of a corresponding Portfolio. Each Portfolio has its own investment objective(s) and policies. We briefly describe the Portfolios below. For more complete information about each Portfolio, including the investment objective(s), expenses and risks associated with the Portfolio, please refer to the accompanying prospectuses for the Funds. You should carefully review the Fund prospectuses before allocating amounts to the Variable Sub-Accounts. Portfolio: Each Portfolio Seeks: Investment Adviser: AIM VARIABLE INSURANCE FUNDS* A I M Advisors, Inc. AIM V.I. Capital Appreciation Fund Growth of capital AIM V.I. Growth Fund Growth of capital AIM V.I. Value Fund Long-term growth of capital ALLIANCE VARIABLE PRODUCTS SERIES FUND Alliance Capital Management, L.P. Growth Portfolio Long-term growth of capital. Current income is incidental to the Portfolio's objective Growth and Income Portfolio Reasonable current income and reasonable opportunity for appreciation Premier Growth Portfolio Growth of capital by pursuing aggressive investment policies MORGAN STANLEY DEAN WITTER VARIABLE INVESTMENT SERIES Morgan Stanley Dean Witter Advisors, Inc. Money Market Portfolio High current income, preservation of capital, and liquidity Quality Income Plus Portfolio High current income and, as a secondary objective, capital appreciation when consistent with its primary objective Short-Term Bond Portfolio High current income consistent with preservation of capital High Yield Portfolio High current income and, as a secondary objective, capital appreciation when consistent with its primary objective Utilities Portfolio Current income and long term growth of income and capital Income Builder Portfolio Reasonable income and, as a secondary objective, growth of capital Dividend Growth Portfolio Reasonable current income and long-term growth of income and capital Capital Growth Portfolio Long-term capital growth Global Dividend Growth Portfolio Reasonable current income and long-term growth of income and capital European Growth Portfolio To maximize the capital appreciation on its investments Pacific Growth Portfolio To maximize the capital appreciation on its investments Aggressive Equity Portfolio Capital Growth Equity Portfolio Growth of capital and, as a secondary objective, income when consistent with its primary objective. S&P 500 Index Investment results that, before expenses, correspond to the total return of the Standard and Poor's 500 Composite Stock Price Index Competitive Edge "Best Ideas" Portfolio Long-term capital growth Strategist Portfolio High total investment return THE UNIVERSAL INSTITUTIONAL FUND, INC. Morgan Stanley Asset Management Equity Growth Portfolio Long-term capital appreciation U.S. Real Estate Portfolio Above-average current income and long-term capital appreciation International Magnum Portfolio Long-term capital appreciation Emerging Markets Equity Portfolio Long-term capital appreciation Mid-Cap Value Above-average total return over a Miller Anderson & market cycle of three to five years Sherrerd, LLP PUTNAM VARIABLE TRUST Putnam Investment Management, Inc. Putnam VT Growth and Income Fund Capital growth and current income Putnam VT International Growth Fund Capital appreciation Putnam VT Voyager Fund Capital appreciation VAN KAMPEN LIFE INVESTMENT TRUST Van Kampen Asset Management Inc. Emerging Growth Portfolio Capital appreciation
* A Portfolio's investment objective may be changed by the Fund's Board of Trustees without shareholder approval. AMOUNTS YOU ALLOCATE TO VARIABLE SUB-ACCOUNTS MAY GROW IN VALUE, DECLINE IN VALUE, OR GROW LESS THAN YOU EXPECT, DEPENDING ON THE INVESTMENT PERFORMANCE OF THE PORTFOLIOS IN WHICH THOSE VARIABLE SUB-ACCOUNTS INVEST. YOU BEAR THE INVESTMENT RISK THAT THE PORTFOLIOS MIGHT NOT MEET THEIR INVESTMENT OBJECTIVES. SHARES OF THE PORTFOLIOS ARE NOT DEPOSITS, OR OBLIGATIONS OF, OR GUARANTEED OR ENDORSED BY ANY BANK AND ARE NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD OR ANY OTHER AGENCY. INVESTMENT ALTERNATIVES: THE FIXED ACCOUNT OPTIONS - ------------------------------------------------------------------- You may allocate all or a portion of your purchase payments to the Fixed Account Options. You may choose from among 4 Fixed Account Options including 3 dollar cost averaging options ("Dollar Cost Averaging Fixed Account Options") and the option to invest in one or more Guarantee Periods of the Standard Fixed Account Option. The Fixed Account Options may not be available in all states. Northbrook may also limit the availability of the 3 Dollar Cost Averaging Fixed Account Options. Please consult with your Morgan Stanley Dean Witter Financial Advisor for current information. The Fixed Account supports our insurance and annuity obligations. The Fixed Account consists of our general assets other than those in segregated asset accounts. We have sole discretion to invest the assets of the Fixed Account, subject to applicable law. Any money you allocate to a Fixed Account Option does not entitle you to share in the investment experience of the Fixed Account. DOLLAR COST AVERAGING FIXED ACCOUNT OPTIONS Basic Dollar Cost Averaging Option. You may establish a Dollar Cost Averaging Program, as described on page __, by allocating purchase payments to the Basic Dollar Cost Averaging Option. Purchase payments that you allocate to the Basic Dollar Cost Averaging Option will earn interest for a 1 year period at the current rate in effect at the time of allocation. We will credit interest daily at a rate that will compound over the year to the annual interest rate we guaranteed at the time of allocation. Rates may be different than those available for the Guarantee Periods described below. After the one year period, we will declare a renewal rate which we guarantee for a full year. Subsequent renewal dates will be every twelve months for each purchase payment. Renewal rates will not be less than the minimum guaranteed rate found in the Contract. You may not transfer funds from other investment alternatives to the Basic Dollar Cost Averaging Option. 6 and 12 Month Dollar Cost Averaging Options. You also may establish a Dollar Cost Averaging Program by allocating purchase payments to the Fixed Account either for 6 months (the "6 Month Dollar Cost Averaging Option") or for 12 months (the "12 Month Dollar Cost Averaging Option"). Your purchase payments will earn interest for the period you select at the current rates in effect at the time of allocation. Rates may differ from those available for the Guarantee Periods described below. However, the crediting rates for the 6 and 12 Month Dollar Cost Averaging Options will never be less than the minimum guaranteed. You must transfer all of your money out of the 6 or 12 Month Dollar Cost Averaging Options to the Variable Sub-Accounts in equal monthly installments. If we do not receive an allocation from you within one month of the date of payment, the payment plus associated interest will be transferred to the Money Market Variable Sub-Account in equal monthly installments using the longest transfer period being offered at the time the purchase payment is made.If you discontinue a 6 or 12 Month Dollar Cost Averaging Option prior to last scheduled transfer, we will transfer any remaining money immediately to the Money Market Variable Sub-Account, unless you request a different Variable Sub-Account. You may not transfer funds from other investment alternatives to the 6 or 12 Month Dollar Cost Averaging Options. Transfers out of the Dollar Cost Averaging Fixed Account Options do not count towards the 12 transfers you can make without paying a transfer fee. We may declare more than one interest rate for different monies based upon the date of allocation to the Dollar Cost Averaging Fixed Account Options. For current interest rate information, please contact your sales representative or our customer support unit at 1-800-654-2397. STANDARD FIXED ACCOUNT OPTION You may allocate purchase payments or transfers to one or more Guarantee Periods of the Standard Fixed Account Option. Each payment or transfer allocated to a Guarantee Period earns interest at a specified rate that we guarantee for a period of years. We currently offer a 6 year Guarantee Period. We offer additional Guarantee Periods at our sole discretion. Interest Rates. We will tell you what interest rates and Guarantee Periods we are offering at a particular time. We will not change the interest rate that we credit to a particular allocation until the end of the relevant Guarantee Period. We may declare different interest rates for Guarantee Periods of the same length that begin at different times. We have no specific formula for determining the rate of interest that we will declare initially or in the future. We will set those interest rates based on investment returns available at the time of the determination. In addition, we may consider various other factors in determining interest rates including regulatory and tax requirements, our sales commission and administrative expenses, general economic trends, and competitive factors. We determine the interest rates to be declared in our sole discretion. We can neither predict nor guarantee what those rates will be in the future. For current interest rate information, please contact your sales representative or Northbrook at 1-800-654-2397. The interest rate will never be less than the minimum guaranteed rate stated in the Contract. After the Guarantee Period, we will declare a renewal rate. Subsequent renewal dates will be on anniversaries of the first renewal date. On or about each renewal date, the Company will notify the owner of the interest rate(s) for the Contract Year then starting. INVESTMENT ALTERNATIVES: TRANSFERS - ------------------------------------------------------------------- TRANSFERS DURING THE ACCUMULATION PHASE During the Accumulation Phase, you may transfer the Contract Value among the investment alternatives. You may not transfer Contract Value into any of the Dollar Cost Averaging Fixed Account Options. You may request transfers in writing on a form that we provide or by telephone according to the procedure described below. The minimum amount that you may transfer is $100 or the total amount in the investment alternative, whichever is less. Transfers to any Guarantee Period of the Standard Fixed Account Option must be at least $500. We currently do not assess, but reserve the right to assess, a $25 charge on each transfer in excess of 12 per Contract Year. We will notify you at least 30 days before we begin imposing the transfer charge. We treat transfers to or from more than one Portfolio on the same day as one transfer. We limit the amount you may transfer from the Standard Fixed Account Option to the Variable Account or between Guarantee Periods of the Standard Fixed Account Option in any Contract Year to the greater of: 1 25% of the aggregate value in the Standard Fixed Account Option as of the most recent Contract Anniversary (if the amount is less than $1,000, then up to $1,000 may be transferred); or 2 25% of the sum of all purchase payments and transfers allocated to the Standard Fixed Account Option as of the most recent Contract Anniversary. These restrictions do not apply to transfers pursuant to dollar cost averaging. If the first renewal interest rate is less than the rate that was in effect at the time money was allocated or transferred to the Standard Fixed Account Option, we will waive the transfer restriction for that money and the accumulated interest thereon during the 60-day period following the first renewal date. We will process transfer requests that we receive before 3:00 p.m. Central Time on any Valuation Date using the Accumulation Unit Values for that Date. We will process requests received after 3:00 p.m. on any Valuation Date using the Accumulation Unit Values for the next Valuation Date. The Contract permits us to defer transfers from the Fixed Account Options for up to 6 months from the date we receive your request. If we decide to postpone transfers for 30 days or more, we will pay interest as required by applicable law. Any interest would be payable from the date we receive the transfer request to the date we make the transfer. LIMITATIONS ON EXCESSIVE TRANSFERS We reserve the right to limit transfers among the Variable Sub-Accounts if we determine, in our sole discretion, that transfers by one or more Contract owners would be to the disadvantage of other Contract owners. We may limit transfers by taking such steps as: - imposing a minimum time period between each transfer, - refusing to accept transfer requests of an agent acting under a power of attorney on behalf of more than one Contract owner, or - limiting the dollar amount that a Contract owner may transfer among the Variable Sub-Accounts and the Fixed Account Options at any one time. We may apply the restrictions in any manner reasonably designed to prevent transfers that we consider disadvantageous to other Contract owners. We reserve the right to waive any transfer restrictions. TRANSFERS DURING THE PAYOUT PHASE During the Payout Phase, you may make transfers among the Variable Sub-Accounts so as to change the relative weighting of the Variable Sub-Accounts on which your variable amount income payments will be based. In addition, you will have a limited ability to make transfers from the Variable Sub-Accounts to increase the proportion of your income payments consisting of fixed amount income payments. You may not, however, convert any portion of your right to receive fixed amount income payments into variable amount income payments. You may not make any transfers for the first 6 months after the Payout Start Date. Thereafter, you may make transfers among the Variable Sub-Accounts or make transfers from the Variable Sub-Accounts to increase the proportion of your income payments consisting of fixed amount income payments. Your transfers must be at least 6 months apart. TELEPHONE TRANSFERS You may make transfers by telephone by calling 1-800-654-2397 if you have on file a completed authorization form. The cut off time for telephone transfer requests is 3:00 p.m. Central Time. In the event that the New York Stock Exchange closes early, i.e., before 3:00 p.m. Central Time, or in the event that the Exchange closes early for a period of time but then reopens for trading on the same day, we will process telephone transfer requests as of the close of the Exchange on that particular day. We will not accept telephone requests received at any telephone number other than the number that appears in this paragraph or received after the close of trading on the Exchange. We may suspend, modify or terminate the telephone transfer privilege at any time without notice. We use procedures that we believe provide reasonable assurance that the telephone transfers are genuine. For example, we tape telephone conversations with persons purporting to authorize transfers and request identifying information. Accordingly, we disclaim any liability for losses resulting from allegedly unauthorized telephone transfers. However, if we do not take reasonable steps to help ensure that a telephone authorization is valid, we may be liable for such losses. DOLLAR COST AVERAGING PROGRAM Through our Dollar Cost Averaging Program, you may automatically transfer a set amount every month (or other intervals we may offer) during the Accumulation Phase from any Variable Sub-Account or the Dollar Cost Averaging Fixed Account Options to any Variable Sub-Account. Transfers made through dollar cost averaging must be $100 or more. We will not charge a transfer fee for transfers made under this Program, nor will such transfers count against the 12 transfers you can make each Contract Year without paying a transfer fee. The theory of dollar cost averaging is that if purchases of equal dollar amounts are made at fluctuating prices, the aggregate average cost per unit will be less than the average of the unit prices on the same purchase dates. However, participation in this Program does not assure you of a greater profit from your purchases under the Program nor will it prevent or necessarily reduce losses in a declining market. Call or write us for information on how to enroll. AUTOMATIC PORTFOLIO REBALANCING PROGRAM Once you have allocated your money among the Variable Sub-Accounts, the performance of each Sub-Account may cause a shift in the percentage you allocated to each Sub-Account. If you select our Automatic Portfolio Rebalancing Program, we will automatically rebalance the Contract Value in each Variable Sub-Account and return it to the desired percentage allocations. We will not include money you allocate to the Fixed Account Options in the Automatic Portfolio Rebalancing Program. We will rebalance your account each quarter (or other intervals that we may offer) according to your instructions. We will transfer amounts among the Variable Sub-Accounts to achieve the percentage allocations you specify. You can change your allocations at any time by contacting us in writing or by telephone. The new allocation will be effective with the first rebalancing that occurs after we receive your requests. We are not responsible for rebalancing that occurs prior to receipt of your request. Example: Assume that you want your initial purchase payment split among 2 Variable Sub-Accounts. You want 40% to be in the High Yield Variable Sub-Account and 60% to be in the Equity Growth Variable Sub-Account. Over the next 2 months the bond market does very well while the stock market performs poorly. At the end of the first quarter, the High Yield Variable Sub-Account now represents 50% of your holdings because of its increase in value. If you choose to have your holdings rebalanced quarterly, on the first day of the next quarter, we would sell some of your units in the High Yield Variable Sub-Account and use the money to buy more units in the Equity Growth Variable Sub-Account so that the percentage allocations would again be 40% and 60% respectively. The Automatic Portfolio Rebalancing Program is available only during the Accumulation Phase. The transfers made under the Program do not count towards the 12 transfers you can make without paying a transfer fee, and are not subject to a transfer fee. Portfolio rebalancing is consistent with maintaining your allocation of investments among market segments, although it is accomplished by reducing your Contract Value allocated to the better performing segments. EXPENSES - ------------------------------------------------------------------- As a Contract owner, you will bear, directly or indirectly, the charges and expenses described below. CONTRACT MAINTENANCE CHARGE During the Accumulation Phase, on each Contract Anniversary, we will deduct a $35 contract maintenance charge from your Contract Value. The charge will be deducted from each Variable Sub-Account in the proportion that your investment in each bears to your Contract Value. We also will deduct a full contract maintenance charge if you withdraw your entire Contract Value. During the Payout Phase, we will deduct the charge proportionately from each variable income payment. We will waive the charge for the remaining time your contract is in force if the Contract Value is $40,000 or more on or after the Issue Date. The charge is to compensate us for the cost of administering the Contracts and the Variable Account. Maintenance costs include expenses we incur in billing and collecting purchase payments; keeping records; processing death claims, cash withdrawals, and policy changes; proxy statements; calculating Accumulation Unit Values and income payments; and issuing reports to Contract owners and regulatory agencies. We cannot increase the charge. MORTALITY AND EXPENSE RISK CHARGE We deduct a mortality and expense risk charge daily at an annual rate of 1.25% of the average daily net assets you have invested in the Variable Sub-Accounts (1.38% if you select the Performance Death Benefit Option, 1.49% if you select the Death Benefit Combination Option, 1.55% if you select the Income Benefit Combination Option 2, and 1.75% if you select the Income and Death Benefit Combination Option 2). The mortality and expense risk charge is for all the insurance benefits available with your Contract (including our guarantee of annuity rates and the death benefits), for certain expenses of the Contract, and for assuming the risk (expense risk) that the current charges will not be sufficient in the future to cover the cost of administering the Contract. If the charges under the Contract are not sufficient, then we will bear the loss. We charge an additional amount for the Performance Death Benefit Option, the Death Benefit Combination Option, the Income Benefit Combination Option 2, and the Income and Death Benefit Combination Option 2 to compensate us for the additional risk that we accept by providing these Options. We will not increase the mortality and expense risk charge for the life of the Contract. We assess the mortality and expense risk charge during both the Accumulation Phase and the Payout Phase. ADMINISTRATIVE EXPENSE CHARGE We deduct an administrative expense charge daily at an annual rate of 0.10% of the average daily net assets you have invested in the Variable Sub-Accounts. We will not increase the administrative expense charge for the life of the Contract. We intend this charge to cover actual administrative expenses that exceed the revenues from the contract maintenance charge. There is no necessary relationship between the amount of administrative charge imposed on a given Contract and the amount of expenses that may be attributed to that Contract. We assess this charge each day during the Accumulation Phase and the Payout Phase. TRANSFER FEE We do not currently impose a fee upon transfers among the investment alternatives. However, we reserve the right to charge $25 per transfer after the 12th transfer in each Contract Year. We will not charge a transfer fee on transfers that are part of a Dollar Cost Averaging or Automatic Portfolio Rebalancing Program. WITHDRAWAL CHARGE We may assess a withdrawal charge of up to 6% of the purchase payment(s) you withdraw. This charge declines to 0% after the expiration of 6 years from the day we receive the purchase payment being withdrawn. A schedule showing how the withdrawal charge declines over the 6-year period is shown on page __. During each Contract Year, you can withdraw up to 15% of the aggregate amount of your purchase payments as of the beginning of the Contract Year, without paying the charge. Unused portions of this Free Withdrawal Amount are not carried forward to future Contract Years. We will deduct withdrawal charges, if applicable, from the amount paid, unless you instruct otherwise. For purposes of the withdrawal charge, we will treat withdrawals as coming from the oldest purchase payments first. However, for federal income tax purposes, please note that withdrawals are considered to have come first from earnings, which means you pay taxes on the earnings portion of your withdrawal. We do not apply a withdrawal charge in the following situations: o on the Payout Start Date (a withdrawal charge may apply if you elect to receive income payments for a specified period of less than 120 months); and o the death of the Contract owner or Annuitant (unless the Settlement Value is used) o withdrawals taken to satisfy IRS minimum distribution rules for the Contract. We use the amounts obtained from the withdrawal charge to pay sales commissions and other promotional or distribution expenses associated with marketing the Contracts. To the extent that the withdrawal charge does not cover all sales commissions and other promotional or distribution expenses, we may use any of our corporate assets, including potential profit which may arise from the mortality and expense risk charge or any other charges or fee described above, to make up any difference. Withdrawals also may be subject to tax penalties or income tax. You should consult your own tax counsel or other tax advisers regarding any withdrawals. PREMIUM TAXES Some states and other governmental entities (e.g., municipalities) charge premium taxes or similar taxes. We are responsible for paying these taxes and will deduct them from your Contract Value. Some of these taxes are due when the Contract is issued, others are due when income payments begin or upon surrender. Our current practice is not to charge anyone for these taxes until income payments begin or when a total withdrawal occurs including payment upon death. At our discretion, we may discontinue this practice and deduct premium taxes from the purchase payments. Premium taxes generally range form 0% to 4%, depending on the state. At the Payout Start Date, if applicable, we deduct the charge for premium taxes from each investment alternative in the proportion that the Contract owner's value in the investment alternative bears to the total Contract Value. DEDUCTION FOR VARIABLE ACCOUNT INCOME TAXES We are not currently making a provision for taxes. In the future, however, we may make a provision for taxes if we determine, in our sole discretion, that we will incur a tax as a result of the operation of the Variable Account. We will deduct for any taxes we incur as a result of the operation of the Variable Account, whether or not we previously made a provision for taxes and whether or not it was sufficient. Our status under the Internal Revenue Code is briefly described in the Statement of Additional Information. OTHER EXPENSES Each Portfolio deducts advisory fees and other expenses from its assets. You indirectly bear the charges and expenses of the Portfolios whose shares are held by the Variable Sub-Accounts. These fees and expenses are described in the accompanying prospectuses for the Funds. For a summary of current estimates of those charges and expenses, see pages above. We may receive compensation from the investment advisers or administrators of the Portfolios for administrative services we provide to the Portfolios. ACCESS TO YOUR MONEY - ------------------------------------------------------------------- You can withdraw some or all of your Contract Value at any time during the Accumulation Phase. Withdrawals also are available under limited circumstances on or after the Payout Start Date. See "Income Plans" on page __. You can withdraw money from the Variable Account and/or the Fixed Account Options. The amount payable upon withdrawal is the Contract Value (or portion thereof) next computed after we receive the request for a withdrawal at our headquarters, less any withdrawal charges, contract maintenance charges, income tax withholding, penalty tax, and any premium taxes. To complete a partial withdrawal from the Variable Account, we will cancel Accumulation Units in an amount equal to the withdrawal and any applicable charges and taxes. We will pay withdrawals from the Variable Account within 7 days of receipt of the request, subject to postponement in certain circumstances. Withdrawals also may be subject to income tax and a 10% penalty tax, as described below. You must name the investment alternative from which you are taking the withdrawal. If none is named, then the withdrawal request is incomplete and cannot be honored. In general, you must withdraw at least $500 at a time. You may also withdraw a lesser amount if you are withdrawing your entire interest in a Variable Sub-Account. The total amount paid at surrender may be more or less than the total purchase payments due to prior withdrawals, any deductions, and investment performance. POSTPONEMENT OF PAYMENTS We may postpone the payment of any amounts due from the Variable Account under the Contract if: 1. The New York Stock Exchange is closed for other than usual weekends or holidays, or trading on the Exchange is otherwise restricted; 2. An emergency exists as defined by the SEC; or 3. The SEC permits delay for your protection. In addition, we may delay payments or transfers from the Fixed Account Options for up to 6 months or shorter period if required by law. If we delay payment or transfer for 30 days or more, we will pay interest as required by applicable law. Any interest would be payable from the date we receive the withdrawal request to the date we make the payment or transfer. SYSTEMATIC WITHDRAWAL PROGRAM You may choose to receive systematic withdrawal payments on a monthly basis at any time prior to the Payout Start Date. The minimum amount of each systematic withdrawal is $100. We will deposit systematic withdrawal payments into the Contract owner's bank account or Morgan Stanley Dean Witter Account. Please consult with your Morgan Stanley Dean Witter Financial Advisor for details. Depending on fluctuations in the value of the Variable Sub-Accounts and the value of the Fixed Account Options, systematic withdrawals may reduce or even exhaust the Contract Value. Income taxes may apply to systematic withdrawals. Please consult your tax advisor before taking any withdrawal. We may modify or suspend the Systematic Withdrawal Program and charge a processing fee for the service. If we modify or suspend the Systematic Withdrawal Program, existing systematic withdrawal payments will not be affected. MINIMUM CONTRACT VALUE If your request for a partial withdrawal would reduce your Contract Value to less than $500, we may treat it as a request to withdraw your entire Contract Value. Your Contract will terminate if you withdraw all of your Contract Value. We will, however, ask you to confirm your withdrawal request before terminating your Contract. If we terminate your Contract, we will distribute to you its Contract Value, less any applicable charges and taxes. INCOME PAYMENTS - ------------------------------------------------------------------- PAYOUT START DATE The Payout Start Date is the day that we apply your Contract Value to an Income Plan. The Payout Start Date must be no later than: - the Annuitant's 90th Birthday, or - the 10th Contract Anniversary, if later. You may change the Payout Start Date at any time by notifying us in writing of the change at least 30 days before the scheduled Payout Start Date. Absent a change, we will use the Payout Start Date stated in your Contract. INCOME PLANS An "Income Plan" is a series of payments on a scheduled basis to you or to another person designated by you. You may choose and change your choice of Income Plan until 30 days before the Payout Start Date. If you do not select an Income Plan, we will make income payments in accordance with Income Plan 1 with guaranteed payments for 10 years unless changed by the Contract owner. After the Payout Start Date, you may not make withdrawals (except as described below) or change your choice of Income Plan. Three Income Plans are available under the Contract. Each is available to provide: - fixed amount income payments; - variable amount income payments; or - a combination of the two. The three Income Plans are: INCOME PLAN 1 -- LIFE INCOME WITH GUARANTEED PAYMENTS. Under this plan, we make periodic income payments for at least as long as the Annuitant lives. If the Annuitant dies before we have made all of the guaranteed income payments, we will continue to pay the remainder of the guaranteed income payments as required by the Contract. INCOME PLAN 2 -- JOINT AND SURVIVOR LIFE INCOME. Under this plan, we make periodic income payments for as long as either the Annuitant or the joint Annuitant is alive. INCOME PLAN 3 -- GUARANTEED PAYMENTS FOR A SPECIFIED PERIOD Under this plan, we make periodic income payments for the period you have chosen. These payments do not depend on the Annuitant's life. A withdrawal charge may apply if the specified period is less than 10 years. We will deduct the mortality and expense risk charge from the assets of the Variable Account supporting this Income Plan even though we may not bear any mortality risk. The length of any guaranteed payment period under your selected Income Plan generally will affect the dollar amounts of each income payment. As a general rule, longer guaranteed periods result in lower income payments, all other things being equal. For example, if choose an Income Plan with payments that depend on the life of the Annuitant but with no minimum specified period for guaranteed payments, the income payments generally will be greater than the income payments made under the same Income Plan with a minimum specified period for guaranteed payments. We may make other Income Plans available including ones that you and we agree upon. You may obtain information about them by writing or calling us. If you choose Income Plan 1 or 2, or, if available, another Income Plan with payments that continue for the life of the Annuitant or joint Annuitant, we may require proof of age and sex of the Annuitant or joint Annuitant before starting income payments, and proof that the Annuitant or joint Annuitant is still alive before we make each payment. Please note that under such Income Plans, if you elect to take no minimum guaranteed payments, it is possible that the payee could receive only 1 income payment if the Annuitant and any joint Annuitant both die before the second income payment, or only 2 income payments if they die before the third income payment, and so on. Generally, you may not make withdrawals after the Payout Start Date. One exception to this rule applies if you are receiving income payments that do not depend on the life of the Annuitant (such as under Income Plan 3). In that case you may terminate all or part of the Variable Account portion of the income payments at any time and receive a lump sum equal to the present value of the remaining variable payments associated with the amount withdrawn. To determine the present value of any remaining variable income payments being withdrawn, we use a discount rate equal to the assumed annual investment rate that we use to compute such variable income payments. The minimum amount you may withdraw under this feature is $1,000. A withdrawal charge may apply. We also assess applicable premium taxes against all income payments. You may apply your Contract Value to an Income Plan. If you elected the Income Benefit Combination Option 2 or the Income and Death Benefit Combination Option 2 you may be able to apply an amount greater than your Contract Value to an Income Plan. You must apply at least the Contract Value in the Fixed Account Options on the Payout Start Date to fixed amount income payments. If you wish to apply any portion of your Fixed Account Options balance to provide variable amount income payments, you should plan ahead and transfer that amount to the Variable Sub-Accounts prior to the Payout Start Date. If you do not tell us how to allocate your Contract Value among fixed and variable amount income payments, we will apply your Contract Value in the Variable Account to variable amount income payments and your Contract Value in the Fixed Account Options to fixed amount income payments. We will apply your Contract Value, less applicable taxes, to your Income Plan on the Payout Start Date. If the amount available to apply under an Income Plan is less than $2,000, or not enough to provide an initial payment of at least $20, and state law permits, we may: - terminate the Contract and pay you the Contract Value, less any applicable taxes, in a lump sum instead of the periodic payments you have chosen, or - we may reduce the frequency of your payments so that each payment will be at least $20. VARIABLE AMOUNT INCOME PAYMENTS The amount of your variable amount income payments depends upon the investment results of the Variable Sub-Accounts you select, the premium taxes you pay, the age and sex of the Annuitant, and the Income Plan you choose. We guarantee that the payments will not be affected by (a) actual mortality experience and (b) the amount of our administration expenses. We cannot predict the total amount of your variable amount income payments. Your variable amount income payments may be more or less than your total purchase payments because (a) variable amount income payments vary with the investment results of the underlying Portfolios, and (b) the Annuitant could live longer or shorter than we expect based on the tables we use. In calculating the amount of the periodic payments in the annuity tables in the Contract, we assumed an annual investment rate of 3%. If the actual net investment return of the Variable Sub-Accounts you choose is less than this assumed investment rate, then the dollar amount of your variable amount income payments will decrease. The dollar amount of your variable amount income payments will increase, however, if the actual net investment return exceeds the assumed investment rate. The dollar amount of the variable amount income payments stays level if the net investment return equals the assumed investment rate. Please refer to the Statement of Additional Information for more detailed information as to how we determine variable amount income payments. FIXED AMOUNT INCOME PAYMENTS We guarantee income payment amounts derived from any Fixed Account Option for the duration of the Income Plan. We calculate the fixed amount income payments by: 1. deducting any applicable premium tax; and 2. applying the resulting amount to the greater of (a) the appropriate value from the income payment table in your Contract or (b) such other value as we are offering at that time. We may defer making fixed amount income payments for a period of up to 6 months or such shorter time state law may require. If we defer payments for 30 days or more, we will pay interest as required by law from the date we receive the withdrawal request to the date we make payment. INCOME BENEFIT COMBINATION OPTION 2 You have the option to add Income Benefit Combination Option 2 to your Contract. This Option guarantees that the amount you apply to an Income Plan will not be less than the income base ("Income Base") (which is the greater of Income Base A or Income Base B), described below. Eligibility. To qualify for this benefit, you must meet the following conditions as of the Payout Start Date: - You must elect a payout Start Date that is on or after the 10th anniversary of the date we issued the rider for this Option (the "Rider Date"); - The Payout Start Date must occur during the 30 day period following a Contract Anniversary; and - The Income Plan you have selected must provide for payments guaranteed for either a single life or joint lives with a specified period of at least: 1. 10 years, if the youngest Annuitant's age is 80 or less on the date the amount is applied; or 2. 5 years, if the youngest Annuitant's age is greater than 80 on the date the amount is applied. If your current Contract Value is higher than the value calculated under Income Benefit Combintation Option 2, you can apply the Contract Value to any Income Plan. The Income Benefit Combination Option 2 may not be available in all states. INCOME BASE The Income Base is the greater of Income Base A or Income Base B. The Income Base is used solely for the purpose of calculating the guaranteed income benefit under this Option("guaranteed income benefit") and does not provide a Contract Value or guarantee performance of any investment option. Income Base A On the Rider Date, Income Base A is equal to the Contract Value. After the Rider Date, we recalculate Income Base A as follows on the Contract Anniversary and when a purchase payment or withdrawal is made. For purchase payments, Income Base A is equal to the most recently calculated Income Base A plus the purchase paymen. For withdrawals, Income Base A is equal to the most recently calculated Income Base A reduced by a withdrawal adjustment (described below). On each Contract Anniversary, Income Base A is equal to the greater of the Contract Value or the most recently calculated Income Base A. In the absence of any withdrawals or purchase payments, Income Base A will be the greatest of the Contract Value on the Rider Date and all Contract Anniversary Contract Values between the Rider Date and the Payout Start Date. We will recalculate Income Base A as described above until the first Contract Anniversary after the 85th birthday of the oldest Contract owner or Annuitant (if the Contract owner is not a natural person). After age 85, we will only recalculate Income Base A to reflect additional purchase payments and withdrawals. Income Base B On the Rider Date, Income Base B is equal to the Contract Value. After the Rider Date, Income Base B plus any subsequent purchase payments and less a withdrawal adjustment (described below) for any subsequent withdrawals will accumulate daily at a rate equivalent to 5% per year until the first Contract Anniversay after the 85th birthday of the oldest Contract owner or Annuitant (if the Contract owner is not a natural person). Withdrawal Adjustment The withdrawal adjustment is equal to (1) divided by (2), with the result multiplied by (3) where: (1) = the withdrawal amount (2) = the Contract Value immediately prior to the withdrawal, and (3) = the most recently calculated Income Base The guaranteed income benefit amount is determined by applying the Income Base less any applicable taxes to the guaranteed rates for the Income Plan you elect. The Income Plan you elect must satisfy the conditions described above. You may also elect the Income and Death Benefit Combination Option 2 which combines the features of the Income Benefit Combination Option 2 with the features of the Death Benefit Combination Option (described below). CERTAIN EMPLOYEE BENEFIT PLANS The Contracts offered by this prospectus contain income payment tables that provide for different payments to men and women of the same age, except in states that require unisex tables. We reserve the right to use income payment tables that do not distinguish on the basis of sex to the extent permitted by law. In certain employment-related situations, employers are required by law to use the same income payment tables for men and women. Accordingly, if the Contract is to be used in connection with an employment-related retirement or benefit plan and we do not offer unisex annuity tables in your state, you should consult with legal counsel as to whether the purchase of a Contract is appropriate. DEATH BENEFITS - ------------------------------------------------------------------- We will pay a death benefit if, prior to the Payout Start Date, any Contract owner dies. We will pay the death benefit to the new Contract owner as determined immediately after the death. The new Contract owner would be the surviving Contract owner(s) or, if none, the Beneficiary(ies). A request for payment of the death benefit must include "Due Proof of Death." We will accept the following documentation as Due Proof of Death: - a certified copy of a death certificate, - a certified copy of a decree of a court of competent jurisdiction as to the finding of death, or - any other proof acceptable to us. DEATH BENEFIT AMOUNT Prior to the Payout Start Date, the death benefit is equal to the greatest of: 1. the Contract Value as of the date we determine the death benefit, or 2. the sum of all purchase payments made less any amounts deducted in connection with partial withdrawals (including any withdrawal charges or applicable premium taxes), or 3. the Contract Value on the most recent Death Benefit Anniversary prior to the date we determine the death benefit, plus any purchase payments and less any amounts deducted in connection with any partial withdrawals since that Death Benefit Anniversary. A "Death Benefit Anniversary" is every 6th Contract Anniversary beginning with the 6th Contract Anniversary. For example, the 6th, 12th and 18th Contract Anniversaries are the first three Death Benefit Anniversaries. We will determine the value of the death benefit as of the end of the Valuation Date on which we receive a complete request for payment of the death benefit. If we receive a request after 3 p.m. Central Time on a Valuation Date, we will process the request as of the end of the following Valuation Date. DEATH BENEFIT OPTIONS The Performance Death Benefit OptiOn, Death Benefit Combination Option and Income and Death Benefit Combination Option 2 are optional benefits that you may elect. If the Contract owner is a natural person, these death benefit options apply only on the death of the Contract owner. If the Contract owner is not a natural person, these options apply only on the death of the Annuitant. For Contracts with a death benefit option, the death benefit will be the greater of (1) through (3) above, or (4) the death benefit option you selected. The death benefit options may not be available in all states. PERFORMANCE DEATH BENEFIT OPTION The Performance Death Benefit on the date we issue the rider for this option ("Rider Date") is equal to the Contract Value. On each Contract Anniversary, we will recalculate your Performance Death Benefit to equal the greater of your Contract Value on that date, or the most recently calculated Performance Death Benefit. We also will recalculate your Performance Death Benefit whenever you make an additional purchase payment or a partial withdrawal. Additional purchase payments will increase the Performance Death Benefit dollar-for-dollar. Withdrawals will reduce the Performance Death Benefit by an amount equal to: (i) the Performance Death Benefit immediately before the withdrawal, multiplied by (ii) the ratio of the withdrawal amount to the Contract Value just before the withdrawal. In the absence of any withdrawals or purchase payments, the Performance Death Benefit will be the greatest of the Contract Value on the Rider Date and all Contract Anniversary Contract Values on or before the date we calculate the death benefit. We will recalculate the Performance Death Benefit as described above until the oldest Contract owner (the Annuitant, if the owner is not a natural person), attains age 85. After age 85, we will recalculate the Performance Death Benefit only to reflect additional purchase payments and withdrawals. DEATH BENEFIT COMBINATION OPTION If you select the Death Benefit Combination Option, the death benefit payable will be the greater of the death benefits provided by Death Benefit A or Death Benefit B. Death Benefit B is the Perforamnce Death Benefit Option described above. DEATH BENEFIT A IS ONLY AVAILABLE THROUGH THE DEATH BENEFIT COMBINATION OPTION. We sometimes refer to the Death Benefit Combination Option as the "Best of the Best" death benefit option. DEATH BENEFIT A. Death Benefit A on the date we issue the rider for this option ("Rider Date") is equal to the Contract Value. On the first Contract Anniversary after the Rider Date, Death Benefit A is equal to the Contract Value on the Rider Date plus interest at an annual rate of 5% per year for the portion of the year since the Rider Date. On each subsequent Contract Anniversary, we will multiply Death Benefit A as of the prior Contract Anniversary by 1.05. This results in an increase of 5% annually. We will recalculate Death Benefit A as described above, but not beyond the Contract Anniversary preceding the oldest Contract owner's (the Annuitant, if the owner is not a natural person), 85th birthday. For all ages, we will recalculate Death Benefit A on each Contract Anniversary, or upon receipt of a death claim, as follows: - We will reduce the Death Benefit A by a withdrawal adjustment (as described above under Performance Death Benefit Option) for any withdrawals since the prior Contract Anniversary; and - We will increase Death Benefit A by any additional purchase payments since the prior Contract Anniversary. INCOME AND DEATH BENEFIT COMBINATION OPTION 2 You may also elect the Income and Death Benefit Combination Option 2 which combines the features of the Income Benefit Combination (described on page __) with the features of the Death Benefit Combination Option. DEATH BENEFIT PAYMENTS If the new Contract owner is a natural person, the new Contract owner may elect to: 1. receive the death benefit in a lump sum, or 2. apply the death benefit to an Income Plan. Payments from the Income Plan must begin within 1 year of the date of death and must be payable throughout: - the life of the new Contract owner; or - for a guaranteed number of payments from 5 to 30 years, but not to exceed the life expectancy of the (new) Contract owner. Options 1 and 2 above are only available if the new Contract owner elects one of these options within 180 days of the date of death. Otherwise, the new Contract owner will receive the Settlement Value. The "Settlement Value" is the Contract Value, less applicable withdrawal charge and premium tax. The Settlement Value paid will be the Settlement Value next computed on or after the requested distribution date for payment, or on the mandatory distribution date of 5 years after the date of your death, whichever is earlier. We are currently waiving the 180 day limit, but we reserve the right to enforce the limitation in the future. In any event, the entire value of the Contract must be distributed within 5 years after the date of the death unless an Income Plan is elected or a surviving spouse continues the Contract in accordance with the provisions described below. If the sole new Contract owner is your spouse, within 180 days after the date of your death, he or she may elect one of the options listed above or may continue the Contract in the Accumulation Phase as if the death had not occurred. On the date the Contract is continued, the Contract Value will equal the amount of the death benefit as determined as of the Valuation Date on which we received Due Proof of Death (the next Valuation Date, if we receive Due Proof of Death after 3 p.m. Central Time). If the Contract is continued in the Accumulation Phase, the surviving spouse may make a single withdrawal of any amount within one year of the date of death without incurring a withdrawal charge. The Contract may only be continued once. If the new Contract owner is a corporation, trust, or other non-natural person, then the new Contract owner may elect, within 180 days of your death, to receive the death benefit in lump sum or may elect to receive the Settlement Value in a lump sum within 5 years of death. We are currently waiving the 180 day limit, but we reserve the right to enforce the limitation in the future. MORE INFORMATION - ------------------------------------------------------------------- NORTHBROOK Northbrook is the issuer of the Contract. Northbrook is a stock life insurance company organized under the laws of the State of Arizona in 1998. Previously, from 1978 to 1998, Northbrook was organized under the laws of the State of Illinois. Northbrook is currently licensed to operate in all states (except New York), the District of Columbia, and Puerto Rico. We intend to offer the Contract in those jurisdictions in which we are licensed. Our headquarters are located at 3100 Sanders Road, Northbrook, Illinois, 60062. Northbrook is a wholly owned subsidiary of Allstate Life Insurance Company ("Allstate Life"), an Illinois stock life insurance company. Allstate Life is a wholly owned subsidiary of Allstate Insurance Company, an Illinois stock property-liability insurance company. All of the outstanding capital stock of Allstate Insurance Company is owned by The Allstate Corporation. Northbrook and Allstate Life entered into a reinsurance agreement effective December 31, 1987. Under the reinsurance agreement, Allstate Life reinsures all of Northbrook's liabilities under the Contracts. The reinsurance agreement provides us with financial backing from Allstate Life. However, it does not create a direct contractual relationship between Allstate Life and you. In other words, the obligations of Allstate Life under the reinsurance agreement are to Northbrook; Northbrook remains the sole obligor under the Contract to you. Several independent rating agencies regularly evaluate life insurers' claims-paying ability, quality of investments, and overall stability. A.M. Best Company assigns A+ (Superior) to Allstate Life which automatically reinsures all net business of Northbrook. A.M. Best Company also assigns Northbrook the rating of A+(r) because Northbrook automatically reinsures all net business with Allstate Life. Standard & Poor's Insurance Rating Services assigns an AA+ (Very Strong) financial strength rating and Moody's assigns an Aa2 (Excellent) financial strength rating to Northbrook. Northbrook shares the same ratings of its parent, Allstate Life. These ratings do not reflect the investment performance of the Variable Account. We may from time to time advertise these ratings in our sales literature. THE VARIABLE ACCOUNT Northbrook established the Northbrook Variable Annuity Account II on May 8, 1990. We have registered the Variable Account with the SEC as a unit investment trust. The SEC does not supervise the management of the Variable Account or Northbrook. We own the assets of the Variable Account. The Variable Account is a segregated asset account under Arizona insurance law. That means we account for the Variable Account's income, gains, and losses separately from the results of our other operations. It also means that only the assets of the Variable Account that are in excess of the reserves and other Contract liabilities with respect to the Variable Account are subject to liabilities relating to our other operations. Our obligations arising under the Contracts are general corporate obligations of Northbrook. The Variable Account consists of 31 Variable Sub-Accounts, each of which invests in a corresponding Portfolio. We may add new Variable Sub-Accounts or eliminate one or more of them, if we believe marketing, tax, or investment conditions so warrant. We do not guarantee the investment performance of the Variable Account, its Sub-Accounts or the Portfolios. We may use the Variable Account to fund our other annuity contracts. We will account separately for each type of annuity contract funded by the Variable Account. THE PORTFOLIOS DIVIDENDS AND CAPITAL GAIN DISTRIBUTIONS. We automatically reinvest all dividends and capital gains distributions from the Portfolios in shares of the distributing Portfolio at their net asset value. VOTING PRIVILEGES. As a general matter, you do not have a direct right to vote the shares of the Portfolios held by the Variable Sub-Accounts to which you have allocated your Contract Value. Under current law, however, you are entitled to give us instructions on how to vote those shares on certain matters. Based on our present view of the law, we will vote the shares of the Portfolios that we hold directly or indirectly through the Variable Account in accordance with instructions that we receive from Contract owners entitled to give such instructions. As a general rule, before the Payout Start Date, the Contract owner or anyone with a voting interest is the person entitled to give voting instructions. The number of shares that a person has a right to instruct will be determined by dividing the Contract Value allocated to the applicable Variable Sub-Account by the net asset value per share of the corresponding Portfolio as of the record date of the meeting. After the Payout Start Date the person receiving income payments has the voting interest. The payee's number of votes will be determined by dividing the reserves for such Contract allocated to the applicable Variable Sub-Account by the net asset value per share of the corresponding Portfolio as of the record date of the meeting. The votes decrease as income payments are made and as the reserves for the Contract decrease. We will vote shares attributable to Contracts for which we have not received instructions, as well as shares attributable to us, in the same proportion as we vote shares for which we have received instructions, unless we determine that we may vote such shares in our own discretion. We will apply voting instructions to abstain on any item to be voted upon on a pro rata basis to reduce the votes eligible to be cast. We reserve the right to vote Portfolio shares as we see fit without regard to voting instructions to the extent permitted by law. If we disregard voting instructions, we will include a summary of that action and our reasons for that action in the next semi-annual financial report we send to you. CHANGES IN PORTFOLIOS. We reserve the right, subject to any applicable law, to make additions to, deletions from or substitutions for the Portfolio shares held by any Variable Sub-Account. If the shares of any of the Portfolios are no longer available for investment by the Variable Account or if, in our judgment, further investment in such shares is no longer desirable in view of the purposes of the Contract, we may eliminate that Portfolio and substitute shares of another eligible investment fund. Any substitution of securities will comply with the requirements of the Investment Company Act of 1940. We also may add new Variable Sub-Accounts that invest in additional mutual funds. We will notify you in advance of any change. CONFLICTS OF INTEREST. Certain of the Portfolios sell their shares to separate accounts underlying both variable life insurance and variable annuity contracts. It is conceivable that in the future it may be unfavorable for variable life insurance separate accounts and variable annuity separate accounts to invest in the same Portfolio. The boards of directors or trustees of these Portfolios monitor for possible conflicts among separate accounts buying shares of the Portfolios. Conflicts could develop for a variety of reasons. For example, differences in treatment under tax and other laws or the failure by a separate account to comply with such laws could cause a conflict. To eliminate a conflict, a Portfolio's board of directors or trustees may require a separate account to withdraw its participation in a Portfolio. A Portfolio's net asset value could decrease if it had to sell investment securities to pay redemption proceeds to a separate account withdrawing because of a conflict. THE CONTRACT The Contracts are distributed exclusively by their principal underwriter, Dean Witter Reynolds Inc. ("Dean Witter"). Dean Witter, a wholly owned subsidiary of Morgan Stanley Dean Witter & Co., is located at Two World Trade Center, New York, New York 10048. Dean Witter is a member of the New York Stock Exchange and the National Association of Securities Dealers. We may pay up to a maximum sales commission of 6.0% of purchase payments and an annual sales administration expense of up to 0.20% of the average net assets of the Fixed Account Options to Dean Witter. In addition, Dean Witter may pay annually to its representatives, from its profits, a persistency bonus that will take into account, among other things, the length of time purchase payments have been held under the Contract and Contract Value. ADMINISTRATION. We have primary responsibility for all administration of the Contracts and the Variable Account. We provide the following administrative services, among others: - issuance of the Contracts; - maintenance of Contract owner records; - Contract owner services; - calculation of unit values; - maintenance of the Variable Account; and - preparation of Contract owner reports. We will send you Contract statements at least annually prior to the Payout Start Date. You should notify us promptly in writing of any address change. You should read your statements and confirmations carefully and verify their accuracy. You should contact us promptly if you have a question about a periodic statement. We will investigate all complaints and make any necessary adjustments retroactively, but you must notify us of a potential error within a reasonable time after the date of the questioned statement. If you wait too long, we will make the adjustment as of the date that we receive notice of the potential error. We also will provide you with additional periodic and other reports, information and prospectuses as may be required by federal securities laws. QUALIFIED PLANS If you use the Contract with a qualified plan, the plan may impose different or additional conditions or limitations on withdrawals, waivers of withdrawal charges, death benefits, Payout Start Dates, income payments, and other Contract features. In addition, adverse tax consequences may result if qualified plan limits on distributions and other conditions are not met. Please consult your qualified plan administrator for more information. LEGAL MATTERS Freedman, Levy, Kroll & Simonds, Washington, D.C., has advised Northbrook on certain federal securities law matters. All matters of state law pertaining to the Contracts, including the validity of the Contracts and Northbrook's right to issue such Contracts under state insurance law, have been passed upon by Michael J. Velotta, General Counsel of Northbrook. YEAR 2000 Northbrook is heavily dependent upon complex computer systems for all phases of its operations, including customer service, and policy and contract administration. Since many of Northbrook's older computer software programs recognized only the last two digits of the year in any date, some software may have failed to operate properly after the year 1999 if the software had not been reprogrammed or replaced ("Year 2000 Issue"). Northbrook believes that many of its counterparties and suppliers also had potential Year 2000 Issues which could have affected Northbrook. In 1995, Allstate Insurance Company commenced a four phase plan intended to mitigate and/or prevent the adverse effects of Year 2000 Issues. These strategies included normal development and enhancement of new and existing systems, to make them Year 2000 compliant. The plan also included Northbrook actively working with its major external counterparties and suppliers to assess their compliance efforts and Northbrook's exposure to them. As of the date of this prospectus, Northbrook believes that the Year 2000 Issue was successfully resolved and that such resolution will not materially affect its results of operations, liquidity or financial position. TAXES - ------------------------------------------------------------------- THE FOLLOWING DISCUSSION IS GENERAL AND IS NOT INTENDED AS TAX ADVICE. NORTHBROOK MAKES NO GUARANTEE REGARDING THE TAX TREATMENT OF ANY CONTRACT OR TRANSACTION INVOLVING A CONTRACT. Federal, state, local and other tax consequences of ownership or receipt of distributions under an annuity contract depend on your individual circumstances. If you are concerned about any tax consequences with regard to your individual circumstances, you should consult a competent tax adviser. TAXATION OF ANNUITIES IN GENERAL TAX DEFERRAL. Generally, you are not taxed on increases in the Contract Value until a distribution occurs. This rule applies only where: 1. the Contract owner is a natural person, 2. the investments of the Variable Account are "adequately diversified" according to Treasury Department regulations, and 3. Northbrook is considered the owner of the Variable Account assets for federal income tax purposes. NON-NATURAL OWNERS. As a general rule, annuity contracts owned by non-natural persons such as corporations, trusts, or other entities are not treated as annuity contracts for federal income tax purposes. The income on such contracts is taxed as ordinary income received or accrued by the owner during the taxable year. Please see the Statement of Additional Information for a discussion of several exceptions to the general rule for Contracts owned by non-natural persons. DIVERSIFICATION REQUIREMENTS. For a Contract to be treated as an annuity for federal income tax purposes, the investments in the Variable Account must be "adequately diversified" consistent with standards under Treasury Department regulations. If the investments in the Variable Account are not adequately diversified, the Contract will not be treated as an annuity contract for federal income tax purposes. As a result, the income on the Contract will be taxed as ordinary income received or accrued by the Contract owner during the taxable year. Although Northbrook does not have control over the Portfolios or their investments, we expect the Portfolios to meet the diversification requirements. OWNERSHIP TREATMENT. The IRS has stated that you will be considered the owner of Variable Account assets if you possess incidents of ownership in those assets, such as the ability to exercise investment control over the assets. At the time the diversification regulations were issued, the Treasury Department announced that the regulations do not provide guidance concerning circumstances in which investor control of separate account investments may cause an investor to be treated as the owner of the separate account. The Treasury Department also stated that future guidance would be issued regarding the extent that owners could direct sub-account investments without being treated as owners of the underlying assets of the separate account. Your rights under the Contract are different than those described by the IRS in rulings in which it found that contract owners were not owners of separate account assets. For example, you have the choice to allocate premiums and Contract Values among more investment alternatives. Also, you may be able to transfer among investment alternatives more frequently than in such rulings. These differences could result in you being treated as the owner of the Variable Account. If this occurs, income and gain from the Variable Account assets would be includible in your gross income. Northbrook does not know what standards will be set forth in any regulations or rulings which the Treasury Department may issue. It is possible that future standards announced by the Treasury Department could adversely affect the tax treatment of your Contract. We reserve the right to modify the Contract as necessary to attempt to prevent you from being considered the federal tax owner of the assets of the Variable Account. However, we make no guarantee that such modification to the Contract will be successful. TAXATION OF PARTIAL AND FULL WITHDRAWALS. If you make a partial withdrawal under a non-Qualified Contract, amounts received are taxable to the extent the Contract Value, without regard to surrender charges, exceeds the investment in the Contract. The investment in the Contract is the gross premium paid for the Contract minus any amounts previously received from the Contract if such amounts were properly excluded from your gross income. If you make a partial withdrawal under a Qualified Contract, the portion of the payment that bears the same ratio to the total payment that the investment in the Contract (i.e., nondeductible IRA contributions, after tax contributions to qualified plans) bears to the Contract Value, is excluded from your income. If you make a full withdrawal under a non-Qualified Contract or a Qualified Contract, the amount received will be taxable only to the extent it exceeds the investment in the Contract. "Nonqualified distributions" from Roth IRAs are treated as made from contributions first and are included in gross income only to the extent that distributions exceed contributions. "Qualified distributions" from Roth IRAs are not included in gross income. "Qualified distributions" are any distributions made more than 5 taxable years after the taxable year of the first contribution to any Roth IRA and which are: - made on or after the date the individual attains age 59 1/2, - made to a Beneficiary after the Contract owner's death, - attributable to the Contract owner being disabled, or - for a first time home purchase (first time home purchases are subject to a lifetime limit of $10,000). If you transfer a non-Qualified Contract without full and adequate consideration to a person other than your spouse (or to a former spouse incident to a divorce), you will be taxed on the difference between the Contract Value and the investment in the Contract at the time of transfer. Except for certain Qualified Contracts, any amount you receive as a loan under a Contract, and any assignment or pledge (or agreement to assign or pledge) of the Contract Value is treated as a withdrawal of such amount or portion. TAXATION OF ANNUITY PAYMENTS. Generally, the rule for income taxation of annuity payments received from a non-Qualified Contract provides for the return of your investment in the Contract in equal tax-free amounts over the payment period. The balance of each payment received is taxable. For fixed annuity payments, the amount excluded from income is determined by multiplying the payment by the ratio of the investment in the Contract (adjusted for any refund feature or period certain) to the total expected value of annuity payments for the term of the Contract. If you elect variable annuity payments, the amount excluded from taxable income is determined by dividing the investment in the Contract by the total number of expected payments. The annuity payments will be fully taxable after the total amount of the investment in the Contract is excluded using these ratios. If you die, and annuity payments cease before the total amount of the investment in the Contract is recovered, the unrecovered amount will be allowed as a deduction for your last taxable year. TAXATION OF ANNUITY DEATH BENEFITS. Death of a Contract owner, or death of the Annuitant if the Contract is owned by a non-natural person, will cause a distribution of death benefits from a Contract. Generally, such amounts are included in income as follows: 1. if distributed in a lump sum, the amounts are taxed in the same manner as a full withdrawal, or 2. if distributed under an annuity option, the amounts are taxed in the same manner as an annuity payment. Please see the Statement of Additional Information for more detail on distribution at death requirements. PENALTY TAX ON PREMATURE DISTRIBUTIONS. A 10% penalty tax applies to the taxable amount of any premature distribution from a non-Qualified Contract. The penalty tax generally applies to any distribution made prior to the date you attain age 59 1/2. However, no penalty tax is incurred on distributions: 1. made on or after the date the Contract owner attains age 59 1/2; 2. made as a result of the Contract owner's death or disability; 3. made in substantially equal periodic payments over the Contract owner's life or life expectancy, 4. made under an immediate annuity, or 5. attributable to investment in the Contract before August 14, 1982. You should consult a competent tax advisor to determine if any other exceptions to the penalty apply to your situation. Similar exceptions may apply to distributions from Qualified Contracts. AGGREGATION OF ANNUITY CONTRACTS. All non-qualified deferred annuity contracts issued by Northbrook (or its affiliates) to the same Contract owner during any calendar year will be aggregated and treated as one annuity contract for purposes of determining the taxable amount of a distribution. TAX QUALIFIED CONTRACTS The income on qualified plan and IRA investments is tax deferred, and the income on variable annuities held by such plans does not receive any additional tax deferral. You should review the annuity features, including all benefits and expenses, prior to purchasing a variable annuity in a qualified plan or IRA. Contracts may be used as investments with certain qualified plans such as: - Individual Retirement Annuities or Accounts (IRAs) under Section 408 of the Internal Revenue Code ("Code"); - Roth IRAs under Section 408A of the Code; - Simplified Employee Pension Plans under Section 408(k) of the Code; - Savings Incentive Match Plans for Employees (SIMPLE) Plans under Section 408(p) of the Code; - Tax Sheltered Annuities under Section 403(b) of the Code; - Corporate and Self Employed Pension and Profit Sharing Plans; and - State and Local Government and Tax-Exempt Organization Deferred Compensation Plans. Northbrook reserves the right to limit the availability of the Contract for use with any of the qualified plans listed above. In the case of certain qualified plans, the terms of the plans may govern the right to benefits, regardless of the terms of the Contract. RESTRICTIONS UNDER SECTION 403(B) PLANS. Section 403(b) of the Code provides tax-deferred retirement savings plans for employees of certain non-profit and educational organizations. Under Section 403(b), any Contract used for a 403(b) plan must provide that distributions attributable to salary reduction contributions made after December 31, 1988, and all earnings on salary reduction contributions, may be made only: 1. on or after the date of employee - attains age 59 1/2, - separates from service, - dies, - becomes disabled, or 2. on account of hardship (earnings on salary reduction contributions may not be distributed on the account of hardship). These limitations do not apply to withdrawals where Northbrook is directed to transfer some or all of the Contract Value to another 403(b) plan. INCOME TAX WITHHOLDING Northbrook is required to withhold federal income tax at a rate of 20% on all "eligible rollover distributions" unless you elect to make a "direct rollover" of such amounts to an IRA or eligible retirement plan. Eligible rollover distributions generally include all distributions from Qualified Contracts, excluding IRAs, with the exception of: 1. required minimum distributions, or 2. a series of substantially equal periodic payments made over a period of at least 10 years, or over the life (joint lives) of the participant (and beneficiary). Northbrook may be required to withhold federal and state income taxes on any distributions from non-Qualified Contracts or Qualified Contracts that are not eligible rollover distributions, unless you notify us of your election to not have taxes withheld. PERFORMANCE INFORMATION - ------------------------------------------------------------------- We may advertise the performance of the Variable Sub-Accounts, including yield and total return information. Yield refers to the income generated by an investment in a Variable Sub-Account over a specified period. Total return represents the change, over a specified period of time, in the value of an investment in a Variable Sub-Account after reinvesting all income distributions. All performance advertisements will include, as applicable, standardized yield and total return figures that reflect the deduction of insurance charges, the contract maintenance charge, and withdrawal charge. Performance advertisements also may include total return figures that reflect the deduction of insurance charges, but not the contract maintenance or withdrawal charges. The deduction of such charges would reduce the performance shown. Performance advertisements may include aggregate, average, year-by-year, or other types of total return figures. Performance information for periods prior to the inception date of the Variable Sub-Accounts will be based on the historical performance of the corresponding Portfolios for the periods beginning with the inception dates of the Portfolios and adjusted to reflect current Contract expenses. You should not interpret these figures to reflect actual historical performance of the Variable Account. We may include in advertising and sales materials tax deferred compounding charts and other hypothetical illustrations that compare currently taxable and tax deferred investment programs based on selected tax brackets. Our advertisements also may compare the performance of our Variable Sub-Accounts with: (a) certain unmanaged market indices, including but not limited to the Dow Jones Industrial Average, the Standard & Poor's 500, and the Shearson Lehman Bond Index; and/or (b) other management investment companies with investment objectives similar to the underlying funds being compared. In addition, our advertisements may include the performance ranking assigned by various publications, including the Wall Street Journal, Forbes, Fortune, Money, Barron's, Business Week, USA Today, and statistical services, including Lipper Analytical Services Mutual Fund Survey, Lipper Annuity and Closed End Survey, the Variable Annuity Research Data Survey, and SEI. STATEMENT OF ADDITIONAL INFORMATION TABLE OF CONTENTS - ------------------------------------------------------------------- DESCRIPTION - ---------------------------------------------------------------------------- Additions, Deletions or Substitutions of Investments - ---------------------------------------------------------------------------- The Contract - ---------------------------------------------------------------------------- Purchase of Contracts - ---------------------------------------------------------------------------- Tax-free Exchanges (1035 Exchanges, Rollovers and Transfers) - ---------------------------------------------------------------------------- Performance Information - ---------------------------------------------------------------------------- Calculation of Accumulation Unit Values - ---------------------------------------------------------------------------- Calculation of Variable Amount Income Payments - ---------------------------------------------------------------------------- General Matters - ---------------------------------------------------------------------------- Incontestability - ---------------------------------------------------------------------------- Settlements - ---------------------------------------------------------------------------- Safekeeping of the Variable Account's Assets - ---------------------------------------------------------------------------- Premium Taxes - ---------------------------------------------------------------------------- Tax Reserves - ---------------------------------------------------------------------------- Federal Tax Matters - ---------------------------------------------------------------------------- Experts - ---------------------------------------------------------------------------- Financial Statements - ---------------------------------------------------------------------------- ------------------------------ THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFERING IN ANY JURISDICTION IN WHICH SUCH OFFERING MAY NOT LAWFULLY BE MADE. WE DO NOT AUTHORIZE ANYONE TO PROVIDE ANY INFORMATION OR REPRESENTATIONS REGARDING THE OFFERING DESCRIBED IN THIS PROSPECTUS OTHER THAN AS CONTAINED IN THIS PROSPECTUS. MORGAN STANLEY DEAN WITTER VARIABLE ANNUITY 3 Northbrook Life Insurance Company Statement of Additional Information Northbrook Variable Annuity Account II Dated May 1, 2000 Post Office Box 94040 Palatine, IL 60094-4040 1 (800) 654 - 2397 This Statement of Additional Information supplements the information in the prospectus for the Variable Annuity 3 Contracts that we offer. This Statement of Additional Information is not a prospectus. You should read it with the prospectus, dated May 1, 2000, for the Contract. You may obtain a prospectus by calling or writing us at the address or telephone number listed above, or by calling or writing your Morgan Stanley Dean Witter Financial Advisor. Except as otherwise noted, this Statement of Additional Information uses the same defined terms as the prospectus for the Morgan Stanley Dean Witter Variable Annuity 3 Contracts. TABLE OF CONTENTS Description Page Additions, Deletions or Substitutions of Investments The Contract Purchase of Contracts Tax-free Exchanges (1035 Exchanges, Rollovers and Transfers) Performance Information Calculation of Accumulation Unit Values Calculation of Variable Amount Income Payments Net Investment Factor Calculation of Variable Amount Income Payments Calculation of Annuity Unit Values General Matters Incontestability Settlements Safekeeping of the Variable Account's Assets Premium Taxes Tax Reserves Federal Tax Matters Experts Financial Statements ADDITIONS, DELETIONS OR SUBSTITUTIONS OF INVESTMENTS We may add, delete, or substitute the Portfolio shares held by any Variable Sub-Account to the extent the law permits. We may substitute shares of any Portfolio with those of another Portfolio of the same or different mutual Portfolio fund if the shares of the Portfolio are no longer available for investment or if we believe investment in any Portfolio would become inappropriate in view of the purposes of the Variable Account. We will not substitute shares attributable to a Contract owner's interest in a Variable Sub-Account until we have notified the Contract owner of the change, and until the Securities and Exchange Commission has approved the change, to the extent such notification and approval are required by law. Nothing contained in this Statement of Additional Information shall prevent the Variable Account from purchasing other securities for other series or classes of contracts or from effecting a conversion between series or classes of contracts on the basis of requests made by Contract owners. We also may establish additional Variable Sub-Accounts or series of Variable Sub-Accounts. Each additional Variable Sub-Account would purchase shares in a new Portfolio of the same or different mutual fund. We may establish new Variable Sub-Accounts when we believe marketing needs or investment conditions warrant. We determine the basis on which we will offer any new Variable Sub-Accounts in conjunction with the Contract to existing Contract owners. We may eliminate one or more Variable Sub-Accounts if, in our sole discretion, marketing, tax or investment conditions so warrant. We may, by appropriate endorsement, change the Contract as we believe necessary or appropriate to reflect any substitution or change in the Portfolios. If we believe the best interests of persons having voting rights under the Contracts would be served, we may operate the Variable Account as a management company under the Investment Company Act of 1940 or we may withdraw its registration under such Act if such registration is no longer required. THE CONTRACT The Contract is primarily designed to aid individuals in long-term financial planning. You can use it for retirement planning regardless of whether the retirement plan qualifies for special federal income tax treatment. PURCHASE OF CONTRACTS Dean Witter Reynolds Inc., is the principal underwriter and distributor of the Contracts. The offering of the Contracts is continuous. We do not anticipate discontinuing the offering of the Contracts but we reserve the right to do so at any time. TAX-FREE EXCHANGES (1035 EXCHANGES, ROLLOVERS AND TRANSFERS) We accept purchase payments that are the proceeds of a Contract in a transaction qualifying for a tax-free exchange under Section 1035 of the Internal Revenue Code ("Code"). Except as required by federal law in calculating the basis of the Contract, we do not differentiate between Section 1035 purchase payments and non-Section 1035 purchase payments. We also accept "rollovers" and transfers from Contracts qualifying as tax-sheltered annuities ("TSAs"), individual retirement annuities or accounts ("IRAs"), or any other Qualified Contract that is eligible to "rollover" into an IRA. We differentiate among non-Qualified Contracts, TSAs, IRAs and other Qualified Contracts to the extent necessary to comply with federal tax laws. For example, we restrict the assignment, transfer, or pledge of TSAs and IRAs so the Contracts will continue to qualify for special tax treatment. A Contract owner contemplating any such exchange, rollover or transfer of a Contract should contact a competent tax adviser with respect to the potential effects of such a transaction. PERFORMANCE INFORMATION From time to time we may advertise the "standardized," "non-standardized," and "adjusted historical" total returns of the Variable Sub-Accounts, as described below. Please remember that past performance is not an estimate or guarantee of future performance and does not necessarily represent the actual experience of amounts invested by a particular Contract owner. Also, please note that the performance figures shown do not reflect any applicable taxes. STANDARDIZED TOTAL RETURNS A Variable Sub-Account's standardized total return represents the average annual total return of that Sub-Account over a particular period. We compute standardized total return by finding the annual percentage rate that, when compounded annually, will accumulate a hypothetical $1,000 purchase payment to the redeemable value at the end of the one, five or ten year period, or for a period from the date of commencement of the Variable Sub-Account's operations, if shorter than any of the foregoing. We use the following formula prescribed by the SEC for computing standardized total return: 1000(1 + T)n = ERV where: T = average annual total return ERV = ending redeemable value of a hypothetical $1,000 payment made at the beginning of 1, 5, or 10 year periods or shorter period n = number of years in the period 1000 = hypothetical $1,000 investment When factoring in the withdrawal charge assessed upon redemption, we exclude the Free Withdrawal Amount, which is the amount you can withdraw from the Contract without paying a withdrawal charge. We also use the withdrawal charge that would apply upon redemption at the end of each period. Thus, for example, when factoring in the withdrawal charge for a one year standardized total return calculation, we would use the withdrawal charge that applies to a withdrawal of a purchase payment made one year prior. When factoring the contract maintenance charge, we pro rate the charge by dividing (a) the contract maintenance charge by (b) an annual contract size of $45,000. We then multiply the resulting percentage by a hypothetical $1,000 investment. The standardized average annual total returns for the Variable Sub-Accounts available under the Contract for the periods ended December 31, 1999 are set out below. No standardized total returns are shown for the Money Market Variable Sub-Account. No standardized total returns are shown for the Variable Sub-Accounts marked with an asterisk (*) below which commenced operations on January 31, 2000, or on May 1, 2000, as indicated below. The Variable Annuity 3 Contracts were first offered to the public as of the date of this Statement of Additional Information. Accordingly, performance figures for Variable Sub-Accounts prior to those dates reflect the historical performance of the Variable Sub-Accounts, adjusted to reflect the current level of charges that apply to the Variable Sub-Accounts under the Variable Annuity 3 Contracts as well as the withdrawal and contract maintenance charges described above. Variable Sub-Account Inception Dates: Morgan Stanley Dean Witter Variable Investment Series: Variable Sub-Account Date Quality Income Plus* May 1, 2000 High Yield* May 1, 2000 Utilities* May 1, 2000 Dividend Growth* May 1, 2000 Equity* May 1, 2000 Strategist* May 1, 2000 Capital Growth* May 1, 2000 European Growth* May 1, 2000 Global Dividend Growth* May 1, 2000 Pacific Growth* May 1, 2000 Income Builder* May 1, 2000 Short-Term Bond* May 1, 2000 Aggressive Equity* May 1, 2000 S&P 500 Index* May 1, 2000 Competitive Edge ("Best Ideas")* May 1, 2000 The Universal Institutional Fund, Inc.: Variable Sub-Account Date Equity Growth March 16, 1998 International Magnum March 16, 1998 Emerging Markets Equity March 16, 1998 U.S. Real Estate May 18, 1998 Mid-Cap Value* January 31, 2000 Van Kampen Life Investment Trust: Variable Sub-Account Date Emerging Growth March 16, 1998 AIM Variable Insurance Funds: Variable Sub-Account Date Capital Appreciation* January 31, 2000 Growth* January 31, 2000 Value* January 31, 2000 Alliance Variable Products Series Fund: Variable Sub-Account Date Growth* January 31, 2000 Growth and Income* January 31, 2000 Premier Growth* January 31, 2000 Putnam Variable Trust: Variable Sub-Account Date Growth and Income* January 31, 2000 International Growth* January 31, 2000 Voyager* January 31, 2000
BASE One Year Five Year 10 Years or ---------- --------- Since Inception ---------------- AIM Capital Appreciation N/A N/A N/A AIM Growth N/A N/A N/A AIM Value N/A N/A N/A Alliance Growth N/A N/A N/A Alliance Growth and Income N/A N/A N/A Alliance Premier Growth N/A N/A N/A MSDW Agressive Equity N/A N/A N/A MSDW Capital Appreciation N/A N/A N/A MSDW Capital Growth N/A N/A N/A MSDW Competitive Edge N/A N/A N/A MSDW Dividend Growth N/A N/A N/A MSDW Equity N/A N/A N/A MSDW European Growth N/A N/A N/A MSDW Global Dividend Growth N/A N/A N/A MSDW High Yield N/A N/A N/A MSDW Income Builder N/A N/A N/A MSDW Mid Cap N/A N/A N/A MSDW Money Market N/A N/A N/A MSDW Pacific Growth N/A N/A N/A MSDW Quality Income N/A N/A N/A MSDW S & P 500 Index N/A N/A N/A MSDW Strategist N/A N/A N/A MSDW Utilities N/A N/A N/A Emerging Markets 87.84% N/A 16.49% Equity Growth 33.33% N/A 18.10% International Magnum 19.27% N/A 8.75% U.S. Real Estate -7.04% N/A -11.67% Putnam Growth and Income N/A N/A N/A Putnam International Growth N/A N/A N/A Putnam Voyager N/A N/A N/A Van Kampen Emerging Growth 97.39% N/A 62.05%
PERFORMANCE DEATH BENEFIT One Year Five Year 10 Years or ---------- --------- Since Inception ---------------- AIM Capital Appreciation N/A N/A N/A AIM Growth N/A N/A N/A AIM Value N/A N/A N/A Alliance Growth N/A N/A N/A Alliance Growth and Income N/A N/A N/A Alliance Premier Growth N/A N/A N/A MSDW Agressive Equity N/A N/A N/A MSDW Capital Appreciation N/A N/A N/A MSDW Capital Growth N/A N/A N/A MSDW Competitive Edge N/A N/A N/A MSDW Dividend Growth N/A N/A N/A MSDW Equity N/A N/A N/A MSDW European Growth N/A N/A N/A MSDW Global Dividend Growth N/A N/A N/A MSDW High Yield N/A N/A N/A MSDW Income Builder N/A N/A N/A MSDW Mid Cap N/A N/A N/A MSDW Money Market N/A N/A N/A MSDW Pacific Growth N/A N/A N/A MSDW Quality Income N/A N/A N/A MSDW S & P 500 Index N/A N/A N/A MSDW Strategist N/A N/A N/A MSDW Utilities N/A N/A N/A Emerging Markets 87.60% N/A 16.33% Equity Growth 33.15% N/A 17.95% International Magnum 19.10% N/A 8.61% U.S. Real Estate -7.17% N/A -11.79% Putnam Growth and Income N/A N/A N/A Putnam International Growth N/A N/A N/A Putnam Voyager N/A N/A N/A Van Kampen Emerging Growth 97.13% N/A 61.84%
DEATH BENEFIT COMBINATION OPTION One Year Five Year 10 Years or ---------- --------- Since Inception ---------------- AIM Capital Appreciation N/A N/A N/A AIM Growth N/A N/A N/A AIM Value N/A N/A N/A Alliance Growth N/A N/A N/A Alliance Growth and Income N/A N/A N/A Alliance Premier Growth N/A N/A N/A MSDW Agressive Equity N/A N/A N/A MSDW Capital Appreciation N/A N/A N/A MSDW Capital Growth N/A N/A N/A MSDW Competitive Edge N/A N/A N/A MSDW Dividend Growth N/A N/A N/A MSDW Equity N/A N/A N/A MSDW European Growth N/A N/A N/A MSDW Global Dividend Growth N/A N/A N/A MSDW High Yield N/A N/A N/A MSDW Income Builder N/A N/A N/A MSDW Mid Cap N/A N/A N/A MSDW Money Market N/A N/A N/A MSDW Pacific Growth N/A N/A N/A MSDW Quality Income N/A N/A N/A MSDW S & P 500 Index N/A N/A N/A MSDW Strategist N/A N/A N/A MSDW Utilities N/A N/A N/A Emerging Markets 87.39% N/A 16.20% Equity Growth 33.00% N/A 17.81% International Magnum 18.97% N/A 8.48% U.S. Real Estate -7.28% N/A -11.89% Putnam International Growth N/A N/A N/A Putnam Voyager N/A N/A N/A Van Kampen Emerging Growth 96.91% N/A 61.66%
INCOME BENEFIT COMBINATION 2 One Year Five Year 10 Years or ---------- --------- Since Inception ---------------- AIM Capital Appreciation N/A N/A N/A AIM Growth N/A N/A N/A AIM Value N/A N/A N/A Alliance Growth N/A N/A N/A Alliance Growth and Income N/A N/A N/A Alliance Premier Growth N/A N/A N/A MSDW Agressive Equity N/A N/A N/A MSDW Capital Appreciation N/A N/A N/A MSDW Capital Growth N/A N/A N/A MSDW Competitive Edge N/A N/A N/A MSDW Dividend Growth N/A N/A N/A MSDW Equity N/A N/A N/A MSDW European Growth N/A N/A N/A MSDW Global Dividend Growth N/A N/A N/A MSDW High Yield N/A N/A N/A MSDW Income Builder N/A N/A N/A MSDW Mid Cap N/A N/A N/A MSDW Money Market N/A N/A N/A MSDW Pacific Growth N/A N/A N/A MSDW Quality Income N/A N/A N/A MSDW S & P 500 Index N/A N/A N/A MSDW Strategist N/A N/A N/A MSDW Utilities N/A N/A N/A Emerging Markets 87.27% N/A 16.13% Equity Growth 32.92% N/A 17.74% International Magnum 18.90% N/A 8.41% U.S. Real Estate -7.33% N/A -11.95% Putnam Growth and Income N/A N/A N/A Putnam International Growth N/A N/A N/A Putnam Voyager N/A N/A N/A Van Kampen Emerging Growth 96.79% N/A 61.56%
INCOME AND DEATH BENEFIT COMBINATION 2 One Year Five Year 10 Years or ---------- --------- Since Inception ---------------- AIM Capital Appreciation N/A N/A N/A AIM Growth N/A N/A N/A AIM Value N/A N/A N/A Alliance Growth N/A N/A N/A Alliance Growth and Income N/A N/A N/A Alliance Premier Growth N/A N/A N/A MSDW Agressive Equity N/A N/A N/A MSDW Capital Appreciation N/A N/A N/A MSDW Capital Growth N/A N/A N/A MSDW Competitive Edge N/A N/A N/A MSDW Dividend Growth N/A N/A N/A MSDW Equity N/A N/A N/A MSDW European Growth N/A N/A N/A MSDW Global Dividend Growth N/A N/A N/A MSDW High Yield N/A N/A N/A MSDW Income Builder N/A N/A N/A MSDW Mid Cap N/A N/A N/A MSDW Money Market N/A N/A N/A MSDW Pacific Growth N/A N/A N/A MSDW Quality Income N/A N/A N/A MSDW S & P 500 Index N/A N/A N/A MSDW Strategist N/A N/A N/A MSDW Utilities N/A N/A N/A Emerging Markets 86.89% N/A 15.89% Equity Growth 32.65% N/A 17.50% International Magnum 18.65% N/A 8.19% U.S. Real Estate -7.53% N/A -12.13% Putnam Growth and Income N/A N/A N/A Putnam International Growth N/A N/A N/A Putnam Voyager N/A N/A N/A Van Kampen Emerging Growth 96.39% N/A 15.89%
NON-STANDARDIZED TOTAL RETURNS From time to time, we also may quote rates of return that reflect changes in the values of each Variable Sub-Account's accumulation units. We may quote these "non-standardized total returns" on an annualized, cumulative, year-by-year, or other basis. These rates of return take into account asset-based charges, such as the mortality and expense risk charge and administration charge as well as the contract maintenance charge. However, these rates of return do not reflect, withdrawal charges or any taxes. Such charges, if reflected, would reduce the performance shown. Annualized returns reflect the rate of return that, when compounded annually, would equal the cumulative rate of return for the period shown. We compute annualized returns according to the following formula: Annualized Return = (1+r)1/n-1 where: r = cumulative rate of return for the period shown, and n = number of years in the period. The method of computing annualized rates of return is similar to that for computing standardized performance, described above, except that rather than using a hypothetical $1,000 investment and the ending redeemable value thereof, we use the changes in value of an accumulation unit. Cumulative rates of return reflect the cumulative change in value of an accumulation unit over the period shown. Year-by-year rates of return reflect the change in value of accumulation unit during the course of each year shown. We compute these returns by dividing the accumulation unit value at the end of each period shown, by accumulation unit value at the beginning of that period, and subtracting one. We compute other total returns on a similar basis. We may quote non-standardized total returns for 1,3,5, and 10 year periods, or period since inception of the Variable Sub-Account's operations, as well as other periods, such as "year-to-date" (prior calendar year end to the day stated in the advertisement); "year to most recent quarter" (prior calendar year end to the end of the most recent quarter); the prior calendar year; and the "n" most recent calendar years. The non-standardized average annual total returns for the Variable Sub-Accounts for the periods ended December 31, 1999 are set out below. No non-standardized total returns are shown for the Money Market Variable Sub-Account. In addition, no non-standardized total returns are shown for the Variable Sub-Accounts which commenced operations on January 31, 2000 and May 1, 2000, respectively. The Variable Annuity 3 Contracts were first offered to the public as of the date of this Statement of Additional Information. Accordingly, performance figures for Variable Sub-Accounts prior to those dates reflect the historical performance of the Variable Sub-Accounts, adjusted to reflect the current level of charges that apply to the Variable Sub-Accounts under the Variable Annuity 3 Contracts, excluding the withdrawal charge but including the contract maintenance charges. The inception dates of each Variable Sub-Account appears under "Standardized Total Returns" above. BASE One Year Five Year 10 Years or ---------- --------- Since Inception ---------------- AIM Capital Appreciation N/A N/A N/A AIM Growth N/A N/A N/A AIM Value N/A N/A N/A Alliance Growth N/A N/A N/A Alliance Growth and Income N/A N/A N/A Alliance Premier Growth N/A N/A N/A MSDW Agressive Equity N/A N/A N/A MSDW Capital Appreciation N/A N/A N/A MSDW Capital Growth N/A N/A N/A MSDW Competitive Edge N/A N/A N/A MSDW Dividend Growth N/A N/A N/A MSDW Equity N/A N/A N/A MSDW European Growth N/A N/A N/A MSDW Global Dividend Growth N/A N/A N/A MSDW High Yield N/A N/A N/A MSDW Income Builder N/A N/A N/A MSDW Mid Cap N/A N/A N/A MSDW Money Market N/A N/A N/A MSDW Pacific Growth N/A N/A N/A MSDW Quality Income N/A N/A N/A MSDW Short Term Bond N/A N/A N/A MSDW S & P 500 Index N/A N/A N/A MSDW Strategist N/A N/A N/A MSDW Utilities N/A N/A N/A Emerging Markets 92.09% 18.56% Equity Growth 37.58% 20.15% International Magnum 23.52% 10.94% U.S. Real Estate -2.79% 8.86% Putnam Growth and Income N/A N/A N/A Putnam International Growth N/A N/A N/A Putnam Voyager N/A N/A N/A Van Kampen Emerging Growth 101.64% 63.61%
PERFORMANCE DEATH BENEFIT One Year Five Year 10 Years or ---------- --------- Since Inception ---------------- AIM Capital Appreciation N/A N/A N/A AIM Growth N/A N/A N/A AIM Value N/A N/A N/A Alliance Growth N/A N/A N/A Alliance Growth and Income N/A N/A N/A Alliance Premier Growth N/A N/A N/A MSDW Agressive Equity N/A N/A N/A MSDW Capital Appreciation N/A N/A N/A MSDW Capital Growth N/A N/A N/A MSDW Competitive Edge N/A N/A N/A MSDW Dividend Growth N/A N/A N/A MSDW Equity N/A N/A N/A MSDW European Growth N/A N/A N/A MSDW Global Dividend Growth N/A N/A N/A MSDW High Yield N/A N/A N/A MSDW Income Builder N/A N/A N/A MSDW Mid Cap N/A N/A N/A MSDW Money Market N/A N/A N/A MSDW Pacific Growth N/A N/A N/A MSDW Quality Income N/A N/A N/A MSDW Short Term Bond N/A N/A N/A MSDW S & P 500 Index N/A N/A N/A MSDW Strategist N/A N/A N/A MSDW Utilities N/A N/A N/A Emerging Markets 91.85% N/A 18.40% Equity Growth 37.40% N/A 19.99% International Magnum 23.35% N/A 10.80% U.S. Real Estate -2.92% -8.98% Putnam Growth and Income N/A N/A N/A Putnam International Growth N/A N/A N/A Putnam Voyager N/A N/A N/A Van Kampen Emerging Growth 101.38% N/A -8.98% DEATH BENEFIT COMBINATION OPTION
One Year Five Year 10 Years or ---------- --------- Since Inception ---------------- AIM Capital Appreciation N/A N/A N/A AIM Growth N/A N/A N/A AIM Value N/A N/A N/A Alliance Growth N/A N/A N/A Alliance Growth and Income N/A N/A N/A Alliance Premier Growth N/A N/A N/A MSDW Agressive Equity N/A N/A N/A MSDW Capital Appreciation N/A N/A N/A MSDW Capital Growth N/A N/A N/A MSDW Competitive Edge N/A N/A N/A MSDW Dividend Growth N/A N/A N/A MSDW Equity N/A N/A N/A MSDW European Growth N/A N/A N/A MSDW Global Dividend Growth N/A N/A N/A MSDW High Yield N/A N/A N/A MSDW Income Builder N/A N/A N/A MSDW Mid Cap N/A N/A N/A MSDW Money Market N/A N/A N/A MSDW Pacific Growth N/A N/A N/A MSDW Quality Income N/A N/A N/A MSDW Short Term Bond N/A N/A N/A MSDW S & P 500 Index N/A N/A N/A MSDW Strategist N/A N/A N/A MSDW Utilities N/A N/A N/A Emerging Markets 91.64% N/A 18.27% Equity Growth 37.25% N/A 19.86% International Magnum 23.22% N/A 10.68% U.S. Real Estate -3.03% N/A -9.08% Putnam Growth and Income N/A N/A N/A Putnam International Growth N/A N/A N/A Putnam Voyager N/A N/A N/A Van Kampen Emerging Growth 101.16% N/A 63.22%
INCOME BENEFIT COMBINATION 2 One Year Five Year 10 Years or ---------- --------- Since Inception ---------------- AIM Capital Appreciation N/A N/A N/A AIM Growth N/A N/A N/A AIM Value N/A N/A N/A Alliance Growth N/A N/A N/A Alliance Growth and Income N/A N/A N/A Alliance Premier Growth N/A N/A N/A MSDW Agressive Equity N/A N/A N/A MSDW Capital Appreciation N/A N/A N/A MSDW Capital Growth N/A N/A N/A MSDW Competitive Edge N/A N/A N/A MSDW Dividend Growth N/A N/A N/A MSDW Equity N/A N/A N/A MSDW European Growth N/A N/A N/A MSDW Global Dividend Growth N/A N/A N/A MSDW High Yield N/A N/A N/A MSDW Income Builder N/A N/A N/A MSDW Mid Cap N/A N/A N/A MSDW Money Market N/A N/A N/A MSDW Pacific Growth N/A N/A N/A MSDW Quality Income N/A N/A N/A MSDW Short Term Bond N/A N/A N/A MSDW S & P 500 Index N/A N/A N/A MSDW Strategist N/A N/A N/A MSDW Utilities N/A N/A N/A Emerging Markets 91.52% N/A 18.20% Equity Growth 337.17% N/A 19.79% International Magnum 23.15% N/A 10.61% U.S. Real Estate -3.08% N/A -9.13% Putnam Growth and Income N/A N/A N/A Putnam International Growth N/A N/A N/A Putnam Voyager N/A N/A N/A Van Kampen Emerging Growth 101.04% N/A 63.12%
INCOME AND DEATH BENEFIT COMBINATION 2 One Year Five Year 10 Years or ---------- --------- Since Inception ---------------- AIM Capital Appreciation N/A N/A N/A AIM Growth N/A N/A N/A AIM Value N/A N/A N/A Alliance Growth N/A N/A N/A Alliance Growth and Income N/A N/A N/A Alliance Premier Growth N/A N/A N/A MSDW Agressive Equity N/A N/A N/A MSDW Capital Appreciation N/A N/A N/A MSDW Capital Growth N/A N/A N/A MSDW Competitive Edge N/A N/A N/A MSDW Dividend Growth N/A N/A N/A MSDW Equity N/A N/A N/A MSDW European Growth N/A N/A N/A MSDW Global Dividend Growth N/A N/A N/A MSDW High Yield N/A N/A N/A MSDW Income Builder N/A N/A N/A MSDW Mid Cap N/A N/A N/A MSDW Money Market N/A N/A N/A MSDW Pacific Growth N/A N/A N/A MSDW Quality Income N/A N/A N/A MSDW Short Term Bond N/A N/A N/A MSDW S & P 500 Index N/A N/A N/A MSDW Strategist N/A N/A N/A MSDW Utilities N/A N/A N/A Emerging Markets 91.14% N/A 17.97% Equity Growth 36.90% N/A 19.55% International Magnum 22.90% N/A 10.39% U.S. Real Estate -3.28% N/A -9.31% Putnam Growth and Income N/A N/A N/A Putnam International Growth N/A N/A N/A Putnam Voyager N/A N/A N/A Van Kampen Emerging Growth 100.64% N/A 62.79%
ADJUSTED HISTORICAL TOTAL RETURNS We may advertise the total return for periods prior to the date that the Variable Sub-Accounts commenced operations. We will calculate such "adjusted historical total returns" using the historical performance of the underlying Portfolios and adjusting such performance to reflect the current level of charges that apply to the Variable Sub-Accounts under the Contract. The adjusted historical total returns for the Variable Sub-Accounts for the periods ended December 31, 1999 are set out below. No adjusted historical total returns are shown for the Money Market Variable Sub-Account. The following list provides the inception date for the Portfolio corresponding to each of the Variable Sub-Accounts included in the tables. Inception Date of Variable Sub-Account Corresponding Portfolio - -------------------- ----------------------- High Yield* March 9, 1984 Equity* March 9, 1984 Quality Income Plus* March 1, 1987 Strategist* March 1, 1987 Dividend Growth* March 1, 1990 Utilities* March 1, 1990 European Growth* March 1, 1990 Capital Growth* March 1, 1991 Pacific Growth* March 1, 1991 Global Dividend Growth* February 24, 1997 Income Builder* February 24, 1997 Equity Growth January 2, 1997 International Magnum January 2, 1997 Emerging Markets Equity January 21, 1997 Mid-Cap Value January 2, 1997 U.S. Real Estate March 4, 1997 Competitive Edge ("Best Ideas")* May 18, 1998 S&P 500 Index* May 18, 1998 Short-Term Bond* May 2, 1999 Aggressive Equity* May 1, 1999 Van Kampen Emerging Growth July 3, 1995 AIM V.I. Capital Appreciation May 5, 1993 AIM V.I. Growth May 5, 1993 AIM V.I. Value May 5, 1993 Alliance Growth** September 15, 1994 Alliance Growth and Income** January 14, 1991 Alliance Premier Growth** July 14, 1999 Putnam VT Growth and Income*** February 1, 1988 Putnam VT International Growth*** January 2, 1997 Putnam VT Voyager*** February 1, 1988 * The Portfolios' Class __ shares ("12b-1 class") corresponding to these Variable Sub-Accounts were first offered on [May 1, 2000]. For periods prior to [May 1, 2000], the performance shown is based on the historical performance of the Portfolios' Class __ shares ("non-12b-1 class"), adjusted to reflect the current expenses of the Portfolios' 12b-1 class. The inception dates for the Portfolios are shown above. ** The Portfolios' Class B shares (12b-1 class") corresponding to the Alliance Growth and Alliance Growth and Income Variable Sub-Accounts were first offered on June 1, 1999. For periods prior to these dates, the performance shown is based on the historical performance of the Portfolios' Class A shares ("non-12b-1 class"), adjusted to reflect the current expenses of the Portfolios' 12b-1 class. The inception dates for the Portfolios' are as shown above. *** The Portfolios' Class IB shares ("12b-1 Class") corresponding to the Putnam VT Growth and Income, International Growth, and Voyager Variable Sub-Accounts were first offered on April 6, 1998, April 30, 1998 and April 30, 1998 respectively. For periods prior to these dates, the performance shown is based on the historical performance of the Portfolios' Class 1A shares ("non 12b-1 class"), adjusted to reflect the current expenses of the Portfolios' 12b-1 class. The inception dates for the Portfolios are as shown above. BASE One Year Five Year 10 Years or ---------- --------- Since Inception+ ---------------- AIM Capital Appreciation 38.43% 23.03% 20.17% AIM Growth 29.17% 25.99% 20.02% AIM Value 23.91% 24.15% 20.53% Alliance Growth* 28.42% 29.48% 28.81% Alliance Growth and Income* 5.63% 22.10% 13.94% Alliance Premier Growth* N/A N/A 16.33% MSDW Agressive Equity* N/A N/A 65.59% MSDW Capital Appreciation* 2.86% N/A 1.50% MSDW Capital Growth* 27.26% 22.41% 13.79% MSDW Competitive Edge* 20.16% N/A 10.04% MSDW Dividend Growth* -7.95% 16.92% 11.52% MSDW Equity* 52.22% 33.79% 21.04% MSDW European Growth* 23.13% 23.05% 18.08% MSDW Global Dividend Growth* 8.87% 14.00% 11.64% MSDW High Yield* -6.90% 4.16% 6.85% MSDW Income Builder* 1.38% N/A 8.10% MSDW Mid Cap 14.73% N/A 21.69% MSDW Money Market* -0.87% 3.48% 3.55% MSDW Pacific Growth* 59.62% -1.14% -2.53% MSDW Quality Income* -9.85% 6.19% 6.31% MSDW Short Term Bond* N/A N/A -6.64% MSDW S & P 500 Index* 13.84% N/A 15.97% MSDW Strategist* 11.53% 14.50% 11.52% MSDW Utilities* 6.95% 18.12% 12.71% Emerging Markets 87.84% N/A 9.56% Equity Growth 33.33% N/A 27.79% International Magnum 19.27% N/A 10.78% U.S. Real Estate -7.04% N/A -2.47% Putnam Growth and Income* -4.15% 17.46% 12.31% Putnam International Growth* 53.64% N/A 27.50% Putnam Voyager* 51.65% 29.59% 20.50% Van Kampen Emerging Growth 97.39% N/A 38.52%
+Please refer to the table at the beginning of this section for the inception dates of the Portfolios. *The performance shown for the Portfolios' 12b-1 class is based on the performance of the non 12b-1 class, as described in the table at the beginning of this section. PERFORMANCE DEATH BENEFIT One Year Five Year 10 Years or ---------- --------- Since Inception+ ---------------- AIM Capital Appreciation 38.24% 22.87% 20.01% AIM Growth 29.00% 25.83% 19.86% AIM Value 23.74% 23.98% 20.37% Alliance Growth* 28.25% 29.31% 28.64% Alliance Growth and Income* 5.48% 21.95% 13.79% Alliance Premier Growth* N/A N/A 16.17% MSDW Agressive Equity* N/A N/A 65.37% MSDW Capital Appreciation* 2.83% N/A 1.40% MSDW Capital Growth* 27.09% 22.25% 13.65% MSDW Competitive Edge* 20.00% N/A 9.89% MSDW Dividend Growth* -8.08% 16.77% 11.38% MSDW Equity* 52.02% 33.61% 21.24% MSDW European Growth* 22.97% 22.89% 17.93% MSDW Global Dividend Growth* 8.72% 13.85% 11.49% MSDW High Yield* -7.03% 4.02% 6.71% MSDW Income Builder* 1.24% N/A 7.95% MSDW Mid Cap 14.57% N/A 21.68% MSDW Money Market* -1.01% 3.34% 3.42% MSDW Pacific Growth* 59.41% -1.27% -2.66% MSDW Quality Income* -9.97% 6.05% 6.17% MSDW Short Term Bond* N/A N/A -6.77% MSDW S & P 500 Index* 13.69% N/A 15.81% MSDW Strategist* 11.38% 14.35% 11.38% MSDW Utilities* 6.81% 17.96% 12.57% Emerging Markets 87.60% N/A 9.41% Equity Growth 33.15% N/A 27.62% International Magnum 19.10% N/A 10.63% U.S. Real Estate -7.17% N/A -2.61% Putnam Growth and Income* -4.28% 17.30% 12.16% Putnam International Growth* 53.44% N/A 27.33% Putnam Voyager* 51.45% 29.42% 20.34% Van Kampen Emerging Growth 97.13% N/A 38.34%
+Please refer to the table at the beginning of this section for the inception dates of the Portfolios. *The performance shown for the Portfolios' 12b-1 class is based on the performance of the non 12b-1 class, as described in the table at the beginning of this section. DEATH BENEFIT COMBINATION OPTION One Year Five Year 10 Years or ---------- --------- Since Inception+ ---------------- AIM Capital Appreciation 38.09% 22.74% 19.88% AIM Growth 28.55% 25.69% 19.73% AIM Value 23.60% 23.85% 20.24% Alliance Growth* 28.10% 29.17% 28.50% Alliance Growth and Income* 5.36% 21.81% 13.67% Alliance Premier Growth* N/A N/A 16.04% MSDW Agressive Equity* N/A N/A 65.18% MSDW Capital Appreciation* 2.81% N/A 1.31% MSDW Capital Growth* 26.95% 22.12% 13.52% MSDW Competitive Edge* 19.86% N/A 9.77% MSDW Dividend Growth* -8.18% 16.64% 11.26% MSDW Equity* 51.84% 33.47% 21.11% MSDW European Growth* 22.83% 22.76% 17.80% MSDW Global Dividend Growth* 8.59% 13.72% 11.37% MSDW High Yield* -7.14% 3.90% 6.60% MSDW Income Builder* 1.12% N/A 7.83% MSDW Mid Cap 14.44% N/A 21.39% MSDW Money Market* -1.12% 3.23% 3.30% MSDW Pacific Growth* 59.23% -1.38% -2.77% MSDW Quality Income* -10.08% 5.93% 6.06% MSDW Short Term Bond* N/A N/A -6.87% MSDW S & P 500 Index* 13.56% N/A 15.68% MSDW Strategist* 11.25% 14.22% 11.25% MSDW Utilities* 6.69% 17.83% 12.44% Emerging Markets 87.39% N/A 9.29% Equity Growth 33.00% N/A 27.48% International Magnum 18.97% N/A 10.50% U.S. Real Estate -7.28% N/A -2.72% Putnam Growth and Income* -4.39% 124.06% 12.04% Putnam International Growth* 53.27% N/A 27.19% Putnam Voyager* 51.28% 265.79% 20.21% Van Kampen Emerging Growth 96.91% N/A 38.19%
+Please refer to the table at the beginning of this section for the inception dates of the Portfolios. *The performance shown for the Portfolios' 12b-1 class is based on the performance of the non 12b-1 class, as described in the table at the beginning of this section. INCOME BENEFIT COMBINATION 2 One Year Five Year 10 Years or ---------- --------- Since Inception+ ---------------- AIM Capital Appreciation 38.00% 22.66% 19.81% AIM Growth 28.77% 25.61% 19.66% AIM Value 23.52% 23.77% 20.17% Alliance Growth* 28.02% 28.09% 28.42% Alliance Growth and Income* 5.30% 21.74% 13.60% Alliance Premier Growth* N/A N/A 15.96% MSDW Agressive Equity* N/A N/A 65.08% MSDW Capital Appreciation* 2.86% N/A 1.50% MSDW Capital Growth* 26.87% 22.05% 13.45% MSDW Competitive Edge* 19.78% N/A 9.70% MSDW Dividend Growth* -8.24% 16.57% 11.19% MSDW Equity* 51.75% 33.39% 21.04% MSDW European Growth* 22.75% 22.68% 17.73% MSDW Global Dividend Growth* 8.53% 13.65% 11.30% MSDW High Yield* -7.20% 3.84% 6.53% MSDW Income Builder* 1.06% N/A 7.76% MSDW Mid Cap 14.37% N/A 21.32% MSDW Money Market* -1.18% 3.16% 3.24% MSDW Pacific Growth* 59.13% -1.44% -2.83% MSDW Quality Income* -10.13% 5.87% 5.99% MSDW Short Term Bond* N/A N/A -6.93% MSDW S & P 500 Index * 13.49% N/A 15.61% MSDW Strategist* 11.18% 14.15% 11.19% MSDW Utilities* 6.62% 17.76% 12.38% Emerging Markets 87.27% N/A 9.22% Equity Growth 32.92% N/A 27.40% International Magnum 18.90% N/A 10.44% U.S. Real Estate -7.33% N/A -2.78% Putnam Growth and Income* -4.45% 17.10% 11.97% Putnam International Growth* 53.17% N/A 27.11% Putnam Voyager* 51.19% 29.20% 20.14% Van Kampen Emerging Growth 97.39% N/A 38.52%
+Please refer to the table at the beginning of this section for the inception dates of the Portfolios. *The performance shown for the Portfolios' 12b-1 class is based on the performance of the non 12b-1 class, as described in the table at the beginning of this section. INCOME AND DEATH COMBINATION 2 One Year Five Year 10 Years or ---------- --------- Since Inception+ ---------------- AIM Capital Appreciation 37.72% 22.42% 19.57% AIM Growth 28.51% 25.36% 19.42% AIM Value 23.27% 23.52% 19.93% Alliance Growt* 28.51% 28.83% 28.17% Alliance Growth and Income* 5.08% 21.49% 13.37% Alliance Premier Growth* N/A N/A 15.72% MSDW Agressive Equity* N/A N/A 64.74% MSDW Capital Appreciation* 2.86% N/A 1.50% MSDW Capital Growth* 26.61% 21.80% 13.23% MSDW Competitive Edge* 19.54% N/A 9.47% MSDW Dividend Growth* -8.43% 16.33% 10.97% MSDW Equity* 51.44% 33.12% 20.79% MSDW European Growth* 22.50% 22.44% 17.49% MSDW Global Dividend Growth* 8.30% 13.42% 11.08% MSDW High Yield* -7.39% 3.63% 6.32% MSDW Income Builder* 0.85% N/A 7.54% MSDW Mid Cap 14.13% N/A 21.07% MSDW Money Market* -1.39% 2.95% 3.03% MSDW Pacific Growth* 58.81% -1.64% -3.03% MSDW Quality Income* -10.32% 5.65% 5.78% MSDW Short Term Bond* N/A N/A -7.13% MSDW S & P 500 Index* 13.25% N/A 15.37% MSDW Strategist* 10.95% 13.92% 10.97% MSDW Utilities* 6.40% 17.53% 12.15% Emerging Markets 86.89% N/A 9.00% Equity Growth 32.65% N/A 27.14% International Magnum 18.65% N/A 10.21% U.S. Real Estate -7.53% N/A -2.98% Putnam Growth and Income* -4.65% 16.87% 11.75% Putnam International Growth* 52.86% N/A 26.85% Putnam Voyager* 50.88% 28.94% 19.90% Van Kampen Emerging Growth 97.39% N/A 38.52%
+Please refer to the table at the beginning of this section for the inception dates of the Portfolios. *The performance shown for the Portfolios' 12b-1 class is based on the performance of the non 12b-1 class, as described in the table at the beginning of this section. CALCULATION OF ACCUMULATION UNIT VALUES The value of Accumulation Units will change each Valuation Period according to the investment performance of the Portfolio shares purchased by each Variable Sub-Account and the deduction of certain expenses and charges. A "Valuation Period" is the period from the end of one Valuation Date and continues to the end of the next Valuation Date. A Valuation Date ends at the close of regular trading on the New York Stock Exchange (currently 3:00 p.m. Central Time). The Accumulation Unit Value of a Variable Sub-Account for any Valuation Period equals the Accumulation Unit Value as of the immediately preceding Valuation Period, multiplied by the Net Investment Factor (described below) for that Variable Sub-Account for the current Valuation Period. NET INVESTMENT FACTOR The Net Investment Factor for a Valuation Period is a number representing the change, since the last Valuation Period, in the value of Variable Sub-Account assets per Accumulation Unit due to investment income, realized or unrealized capital gain or loss, deductions for taxes, if any, and deductions for the mortality and expense risk charge and administrative expense charge. We determine the Net Investment Factor for each Variable Sub-Account for any Valuation Period by dividing (A) by (B) and subtracting (C) from the result, where: (A) is the sum of: (1) the net asset value per share of the Portfolio underlying the Variable Sub-Account determined at the end of the current Valuation Period; plus, (2) the per share amount of any dividend or capital gain distributions made by the Portfolio underlying the Variable Sub-Account during the current Valuation Period; (B) is the net asset value per share of the Portfolio underlying the Variable Sub-Account determined as of the end of the immediately preceding Valuation Period; and (C) is the annualized mortality and expense risk and administrative expense charges divided by the number of days in the current calendar year and then multiplied by the number of calendar days in the current Valuation Period. CALCULATION OF VARIABLE AMOUNT INCOME PAYMENTS We calculate the amount of the first variable income payment under an Income Plan by applying the Contract Value allocated to each Variable Sub-Account less any applicable premium tax charge deducted at the time, to the income payment tables in the Contract. We divide the amount of the first variable annuity income payment by the Variable Sub-Account's then current Annuity Unit value to determine the number of annuity units ("Annuity Units") upon which later income payments will be based. To determine income payments after the first, we simply multiply the number of Annuity Units determined in this manner for each Variable Sub-Account by the then current Annuity Unit value ("Annuity Unit Value") for that Variable Sub-Account. CALCULATION OF ANNUITY UNIT VALUES Annuity Units in each Variable Sub-Account are valued separately and Annuity Unit Values will depend upon the investment experience of the particular Portfolio in which the Variable Sub-Account invests. We calculate the Annuity Unit Value for each Variable Sub-Account at the end of any Valuation Period by: o multiplying the Annuity Unit Value at the end of the immediately preceding Valuation Period by the Variable Sub-Account's Net Investment Factor (described in the preceding section) for the Period; and then o dividing the product by the sum of 1.0 plus the assumed investment rate for the Valuation Period. The assumed investment rate adjusts for the interest rate assumed in the income payment tables used to determine the dollar amount of the first variable income payment, and is at an effective annual rate which is disclosed in the Contract. We determine the amount of the first variable income payment paid under an Income Plan using the income payment tables set out in the Contracts. The Contracts include tables that differentiate on the basis of sex, except in states that require the use of unisex tables. GENERAL MATTERS INCONTESTABILITY We will not contest the Contract after we issue it. SETTLEMENTS The Contract must be returned to us prior to any settlement. We must receive due proof of the Contract owner(s) death (or Annuitant's death if there is a non-natural Contract owner) before we will settle a death claim. SAFEKEEPING OF THE VARIABLE ACCOUNT'S ASSETS We hold title to the assets of the Variable Account. We keep the assets physically segregated and separate and apart from our general corporate assets. We maintain records of all purchases and redemptions of the Portfolio shares held by each of the Variable Sub-Accounts. The Portfolios do not issue stock certificates. Therefore, we hold the Variable Account's assets in open account in lieu of stock certificates. See the Portfolios' prospectuses for a more complete description of the custodian of the Portfolios. PREMIUM TAXES Applicable premium tax rates depend on the Contract owner's state of residency and the insurance laws and our status in those states where premium taxes are incurred. Premium tax rates may be changed by legislation, administrative interpretations, or judicial acts. TAX RESERVES We do not establish capital gains tax reserves for any Variable Sub-Account nor do we deduct charges for tax reserves because we believe that capital gains attributable to the Variable Account will not be taxable. However, we reserve the right to deduct charges to establish tax reserves for potential taxes on realized or unrealized capital gains. FEDERAL TAX MATTERS THE FOLLOWING DISCUSSION IS GENERAL AND IS NOT INTENDED AS TAX ADVICE. WE MAKE NO GUARANTEE REGARDING THE TAX TREATMENT OF ANY CONTRACT OR TRANSACTION INVOLVING A CONTRACT. Federal, state, local and other tax consequences of ownership or receipt of distributions under an annuity contract depend on the individual circumstances of each person. If you are concerned about any tax consequences with regard to your individual circumstances, you should consult a competent tax adviser. TAXATION OF NORTHBROOK LIFE INSURANCE COMPANY Northbrook is taxed as a life insurance company under Part I of Subchapter L of the Internal Revenue Code. Since the Variable Account is not an entity separate from Northbrook, and its operations form a part of Northbrook, it will not be taxed separately as a "Regulated Investment Company" under Subchapter M of the Code. Investment income and realized capital gains of the Variable Account are automatically applied to increase reserves under the contract. Under existing federal income tax law, Northbrook believes that the Variable Account investment income and capital gains will not be taxed to the extent that such income and gains are applied to increase the reserves under the contract. Accordingly, Northbrook does not anticipate that it will incur any federal income tax liability attributable to the Variable Account, and therefore Northbrook does not intend to make provisions for any such taxes. If Northbrook is taxed on investment income or capital gains of the Variable Account, then Northbrook may impose a charge against the Variable Account in order to make provision for such taxes. EXCEPTIONS TO THE NON-NATURAL OWNER RULE There are several exceptions to the general rule that annuity contracts held by a non-natural owner are not treated as annuity contracts for federal income tax purposes. Contracts will generally be treated as held by a natural person if the nominal owner is a trust or other entity which holds the Contract as agent for a natural person. However, this special exception will not apply in the case of an employer who is the nominal owner of an annuity contract under a non-qualified deferred compensation arrangement for its employees. Other exceptions to the non-natural owner rule are: (1) contracts acquired by an estate of a decedent by reason of the death of the decedent; (2) certain qualified contracts; (3) contracts purchased by employers upon the termination of certain qualified plans; (4) certain contracts used in connection with structured settlement agreements, and (5) contracts purchased with a single premium when the annuity starting date is no later than a year from purchase of the annuity and substantially equal periodic payments are made, not less frequently than annually, during the annuity period. IRS REQUIRED DISTRIBUTION AT DEATH RULES In order to be considered an annuity contract for federal income tax purposes, an annuity contract must provide: (1) if any owner dies on or after the annuity start date but before the entire interest in the contract has been distributed, the remaining portion of such interest must be distributed at least as rapidly as under the method of distribution being used as of the date of the owner's death; (2) if any owner dies prior to the annuity start date, the entire interest in the contract will be distributed within five years after the date of the owner's death. These requirements are satisfied if any portion of the owner's interest which is payable to (or for the benefit of) a designated beneficiary is distributed over the life of such beneficiary (or over a period not extending beyond the life expectancy of the beneficiary) and the distributions begin within one year of the owner's death. If the owner's designated beneficiary is the surviving spouse of the owner, the contract may be continued with the surviving spouse as the new owner. If the owner of the contract is a non-natural person, then the annuitant will be treated as the owner for purposes of applying the distribution at death rules. In addition, a change in the annuitant on a contract owned by a non-natural person will be treated as the death of the owner. QUALIFIED PLANS The Contract may be used with several types of qualified plans. Northbrook reserves the right to limit the availability of the contract for use with any of the qualified plans listed below. The tax rules applicable to participants in such qualified plans vary according to the type of plan and the terms and conditions of the plan itself. Adverse tax consequences may result from excess contributions, premature distributions, distributions that do not conform to specified commencement and minimum distribution rules, excess distributions and in other circumstances. Contract owners and participants under the plan and annuitants and beneficiaries under the Contract may be subject to the terms and conditions of the plan regardless of the terms of the Contract. IRAs Section 408 of the Code permits eligible individuals to contribute to an individual retirement program known as an IRA. IRAs are subject to limitations on the amount that can be contributed and on the time when distributions may commence. Certain distributions from other types of qualified plans may be "rolled over" on a tax-deferred basis into an IRA. An IRA generally may not provide life insurance, but it may provide a death benefit that equals the greater of the premiums paid and the Contract's Cash Value. The Contract provides a death benefit that in certain circumstances may exceed the greater of the payments and the Contract Value. It is possible that the death benefit could be viewed as violating the prohibition on investment in life insurance contracts with the result that the Contract would not be viewed as satisfying the requirements of an IRA. ROTH IRAs Section 408A of the Code permits eligible individuals to make nondeductible contributions to an individual retirement program known as a Roth IRA. Roth IRAs are subject to limitations on the amount that can be contributed and on the time when distributions may commence. "Qualified distributions" from Roth IRAs are not includible in gross income. "Qualified distributions" are any distributions made more than five taxable years after the taxable year of the first contribution to the Roth IRA, and which are made on or after the date the individual attains age 59 1/2, made to a beneficiary after the owner's death, attributable to the owner being disabled or for a first time home purchase (first time home purchases are subject to a lifetime limit of $10,000). "Nonqualified distributions" are treated as made from contributions first and are includible in gross income to the extent such distributions exceed the contributions made to the Roth IRA. The taxable portion of a "nonqualified distribution" may be subject to the 10% penalty tax on premature distributions. Subject to certain limitations, a traditional Individual Retirement Account or Annuity may be converted or "rolled over" to a Roth IRA. The taxable portion of a conversion or rollover distribution is includible in gross income, but is exempted from the 10% penalty tax on premature distributions. SIMPLIFIED EMPLOYEE PENSION PLANS Section 408(k) of the Code allows employers to establish simplified employee pension plans for their employees using the employees' IRAs if certain criteria are met. Under these plans the employer may, within specified limits, make deductible contributions on behalf of the employees to their individual retirement annuities. Employers intending to use the Contract in connection with such plans should seek competent advice. In particular, employers should consider that an IRA generally may not provide life insurance, but it may provide a death benefit that equals the greater of the premiums paid and the contract's cash value. The Contract provides a death benefit that in certain circumstances may exceed the greater of the payments and the Contract Value. SAVINGS INCENTIVE MATCH PLANS FOR EMPLOYEES (SIMPLE PLANS) Sections 408(p) and 401(k) of the Code allow employers with 100 or fewer employees to establish SIMPLE retirement plans for their employees. SIMPLE plans may be structured as a SIMPLE retirement account using an employee's IRA to hold the assets or as a Section 401(k) qualified cash or deferred arrangement. In general, a SIMPLE plan consists of a salary deferral program for eligible employees and matching or nonelective contributions made by employers. Employers intending to use the Contract in conjunction with SIMPLE plans should seek competent tax and legal advice. TAX SHELTERED ANNUITIES Section 403(b) of the Code permits public school employees and employees of certain types of tax-exempt organizations (specified in Section 501(c)(3) of the Code) to have their employers purchase annuity contracts for them, and subject to certain limitations, to exclude the purchase payments from the employees' gross income. An annuity contract used for a Section 403(b) plan must provide that distributions attributable to salary reduction contributions made after 12/31/88, and all earnings on salary reduction contributions, may be made only on or after the date the employee attains age 59 1/2, separates from service, dies, becomes disabled or on the account of hardship (earnings on salary reduction contributions may not be distributed for hardship). These limitations do not apply to withdrawals where Northbrook is directed to transfer some or all of the Contract Value to another 403(b) plan. CORPORATE AND SELF-EMPLOYED PENSION AND PROFIT SHARING PLANS Sections 401(a) and 403(a) of the Code permit corporate employers to establish various types of tax favored retirement plans for employees. The Self-Employed Individuals Retirement Act of 1962, as amended, (commonly referred to as "H.R. 10" or "Keogh") permits self-employed individuals to establish tax favored retirement plans for themselves and their employees. Such retirement plans may permit the purchase of annuity contracts in order to provide benefits under the plans. STATE AND LOCAL GOVERNMENT AND TAX-EXEMPT ORGANIZATION DEFERRED COMPENSATION PLANS Section 457 of the Code permits employees of state and local governments and tax-exempt organizations to defer a portion of their compensation without paying current taxes. The employees must be participants in an eligible deferred compensation plan. To the extent the Contracts are used in connection with an eligible plan, employees are considered general creditors of the employer and the employer as owner of the contract has the sole right to the proceeds of the contract. Generally, under the non-natural owner rules, such Contracts are not treated as annuity contracts for federal income tax purposes. Under these plans, contributions made for the benefit of the employees will not be includible in the employees' gross income until distributed from the plan. However, under a Section 457 plan all the compensation deferred under the plan must remain solely the property of the employer, subject only to the claims of the employer's general creditors, until such time as made available to the employee or a beneficiary. EXPERTS - ------------------------------------------------------------------------------ The financial statements of the Northbrook as of December 31, 1999 and 1998 and for each of the three years in the period ended December 31, 1999 and the related financial statement schedule that appear in this Statement of Additional Information have been audited by Deloitte & Touche LLP, independent auditors, as stated in their report appearing herein, and are included in reliance upon the report of such firm given upon their authority as experts in accounting and auditing. The financial statements of the Variable Account as of December 31, 1999 and for the periods in the two years then ended that appear in this Statement of Additional Information have been audited by Deloitte & Touche LLP, independent auditors, as stated in their report appearing herein, and are included in reliance upon the report of such firm given upon their authority as experts in accounting and auditing. - ----------------------------------------------------------------------------- FINANCIAL STATEMENTS The financial statements of the Variable Account as of December 31, 1999 and for each of the periods in the two years then ended, the financial statements of the Northbrook as of December 31, 1999 and 1998 and for each of the three years in the period ended December 31, 1999 and related financial statement schedule and the accompanying Independent Auditors' Reports appear in the pages that follow. The financial statements and schedule of Northbrook included herein should be considered only as bearing upon the ability of Northbrook to meet its obligations under the Contracts. INDEPENDENT AUDITORS' REPORT TO THE BOARD OF DIRECTORS AND SHAREHOLDER OF NORTHBROOK LIFE INSURANCE COMPANY: We have audited the accompanying Statements of Financial Position of Northbrook Life Insurance Company (the "Company", an affiliate of The Allstate Corporation) as of December 31, 1999 and 1998, and the related Statements of Operations and Comprehensive Income, Shareholder's Equity and Cash Flows for each of the three years in the period ended December 31, 1999. Our audits also included Schedule IV -Reinsurance. These financial statements and financial statement schedule are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements and financial statement schedule based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, such financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 1999 and 1998, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 1999 in conformity with generally accepted accounting principles. Also, in our opinion, Schedule IV - Reinsurance, when considered in relation to the basic financial statements taken as a whole, presents fairly, in all material respects, the information set forth therein. /s/ Deloitte & Touche LLP Chicago, Illinois February 25, 2000
NORTHBROOK LIFE INSURANCE COMPANY STATEMENTS OF FINANCIAL POSITION December 31, ----------------------------- 1999 1998 ------------- ------------ ($ in thousands, except par value data) ASSETS Investments Fixed income securities, at fair value (amortized cost $89,205 and $81,156) $ 86,998 $ 86,336 Short-term 3,170 5,083 ------------ ------------ Total investments 90,168 91,419 Cash 21 -- Reinsurance recoverable from Allstate Life Insurance Company 2,022,502 2,148,091 Other assets 5,997 6,705 Separate Accounts 8,211,996 7,031,083 ------------ ------------ TOTAL ASSETS $ 10,330,684 $ 9,277,298 ============ ============ LIABILITIES Reserve for life-contingent contract benefits $ 150,587 $ 145,055 Contractholder funds 1,871,933 2,003,122 Current income taxes payable 2,171 1,830 Deferred income taxes 746 3,316 Payable to affiliates, net 5,990 5,085 Separate Accounts 8,211,996 7,031,083 ------------ ------------ TOTAL LIABILITIES 10,243,423 9,189,491 ============ ============ Commitments and Contingent Liabilities (Note 12) SHAREHOLDER'S EQUITY Common stock, $100 par value, 25,000 shares authorized, issued and outstanding 2,500 2,500 Additional capital paid-in 56,600 56,600 Retained income 29,596 25,340 Accumulated other comprehensive (loss) income: Unrealized net capital (losses) gains (1,435) 3,367 ------------ ------------ TOTAL ACCUMULATED OTHER COMPREHENSIVE (LOSS) INCOME (1,435) 3,367 ------------ ------------ TOTAL SHAREHOLDER'S EQUITY 87,261 87,807 ------------ ------------ TOTAL LIABILITIES AND SHAREHOLDER'S EQUITY $ 10,330,684 $ 9,277,298 ============ ============
See notes to financial statements. 2 NORTHBROOK LIFE INSURANCE COMPANY STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
Year Ended December 31, ---------------------------- ($ in thousands) 1999 1998 1997 ------- ------- ------- REVENUES Net investment income $ 6,010 $ 5,691 $ 5,146 Realized capital gains and losses 510 2 (68) ------- ------- ------- Income from operations before income tax expense 6,520 5,693 5,078 Income tax expense 2,264 1,995 1,756 ------- ------- ------- NET INCOME 4,256 3,698 3,322 ------- ------- ------- Other comprehensive (loss) income, after-tax Change in unrealized net capital gains and losses (4,802) 825 1,256 ------- ------- ------- COMPREHENSIVE (LOSS) INCOME $ (546) $ 4,523 $ 4,578 ======= ======= =======
See notes to financial statements. 3 NORTHBROOK LIFE INSURANCE COMPANY STATEMENTS OF SHAREHOLDER'S EQUITY
December 31, -------------------------------- 1999 1998 1997 --------- --------- ---------- ($ in thousands) COMMON STOCK $ 2,500 $ 2,500 $ 2,500 -------- -------- -------- ADDITIONAL CAPITAL PAID-IN $ 56,600 $ 56,600 $ 56,600 -------- -------- -------- RETAINED INCOME Balance, beginning of year $ 25,340 $ 21,642 $ 18,320 Net income 4,256 3,698 3,322 -------- -------- -------- Balance, end of year 29,596 25,340 21,642 -------- -------- -------- ACCUMULATED OTHER COMPREHENSIVE (LOSS) INCOME Balance, beginning of year $ 3,367 $ 2,542 $ 1,286 Change in unrealized net capital gains and losses (4,802) 825 1,256 -------- -------- -------- Balance, end of year (1,435) 3,367 2,542 -------- -------- -------- TOTAL SHAREHOLDER'S EQUITY $ 87,261 $ 87,807 $ 83,284 ======== ======== ========
See notes to financial statements. 4 NORTHBROOK LIFE INSURANCE COMPANY STATEMENTS OF CASH FLOWS
Year Ended December 31, -------------------------------- ($ in thousands) 1999 1998 1997 -------- -------- -------- CASH FLOWS FROM OPERATING ACTIVITIES Net income $ 4,256 $ 3,698 $ 3,322 Adjustments to reconcile net income to net cash provided by operating activities Amortization and other non-cash items 559 518 516 Realized capital gains and losses (510) (2) 68 Changes in: Life-contingent contract benefits and contractholder funds (68) 273 205 Income taxes payable 355 1,866 (480) Other operating assets and liabilities 924 4,126 (264) -------- -------- -------- Net cash provided by operating activities 5,516 10,479 3,367 -------- -------- -------- CASH FLOWS FROM INVESTING ACTIVITIES Fixed income securities Proceeds from sales 17,992 1,922 1,606 Investment collections 6,555 10,253 10,036 Investment purchases (32,050) (20,690) (18,568) Change in short-term investments, net 2,008 (1,964) 3,559 -------- -------- -------- Net cash used in investing activities (5,495) (10,479) (3,367) -------- -------- -------- NET INCREASE IN CASH 21 -- -- CASH AT THE BEGINNING OF YEAR -- -- -- -------- -------- -------- CASH AT END OF YEAR $ 21 $ -- $ -- ======== ======== ========
See notes to financial statements. 5 NORTHBROOK LIFE INSURANCE COMPANY NOTES TO FINANCIAL STATEMENTS ($ in thousands) 1. GENERAL BASIS OF PRESENTATION The accompanying financial statements include the accounts of Northbrook Life Insurance Company (the "Company"), a wholly owned subsidiary of Allstate Life Insurance Company ("ALIC"), which is wholly owned by Allstate Insurance Company ("AIC"), a wholly owned subsidiary of The Allstate Corporation (the "Corporation"). These financial statements have been prepared in conformity with generally accepted accounting principles. To conform with the 1999 presentation, certain amounts in the prior years' financial statements and notes have been reclassified. NATURE OF OPERATIONS The Company markets savings and life insurance products exclusively through Dean Witter Reynolds, Inc. ("Dean Witter") (see Note 4), a wholly owned subsidiary of Morgan Stanley Dean Witter & Co. Savings products include deferred annuities and immediate annuities without life contingencies. Deferred annuities include fixed rate, market value adjusted, and variable annuities. Life insurance consists of interest-sensitive life, immediate annuities with life contingencies, and variable life insurance. In 1999, substantially all of the Company's statutory premiums and deposits were from annuities. Annuity contracts and life insurance policies issued by the Company are subject to discretionary surrender or withdrawal by customers, subject to applicable surrender charges. These policies and contracts are reinsured primarily with ALIC (see Note 3), which invests premiums and deposits to provide cash flows that will be used to fund future benefits and expenses. The Company monitors economic and regulatory developments which have the potential to impact its business. Recently enacted federal legislation will allow for banks and other financial organizations to have greater participation in the securities and insurance businesses. This legislation may present an increased level of competition for sales of the Company's products. Furthermore, the market for deferred annuities and interest-sensitive life insurance is enhanced by the tax incentives available under current law. Any legislative changes which lessen these incentives are likely to negatively impact the demand for these products. Additionally, traditional demutualizations of mutual insurance companies and enacted and pending state legislation to permit mutual insurance companies to convert to a hybrid structure known as a mutual holding company could have a number of significant effects on the Company by (1) increasing industry competition through consolidation caused by mergers and acquisitions related to the new corporate form of business; and (2) increasing competition in the capital markets. The Company is authorized to sell life and savings products in all states except New York, as well as in the District of Columbia and Puerto Rico. The top geographic locations for statutory premiums and deposits for the Company were California, Florida, and Texas for the year ended December 31, 1999. No other jurisdiction accounted for more than 5% of statutory premiums and deposits. Substantially all premiums and deposits are ceded to ALIC under reinsurance agreements. 6 NORTHBROOK LIFE INSURANCE COMPANY NOTES TO FINANCIAL STATEMENTS ($ in thousands) 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES INVESTMENTS Fixed income securities include bonds and mortgage-backed securities. All fixed income securities are carried at fair value and may be sold prior to their contractual maturity ("available for sale"). The difference between amortized cost and fair value, net of deferred income taxes, is reflected as a component of shareholder's equity. Provisions are recognized for declines in the value of fixed income securities that are other than temporary. Such writedowns are included in realized capital gains and losses. Short-term investments are carried at cost or amortized cost, which approximates fair value. Investment income consists primarily of interest and short-term investment dividends. Interest is recognized on an accrual basis and dividends are recorded at the ex-dividend date. Interest income on mortgage-backed securities is determined on the effective yield method, based on the estimated principal repayments. Accrual of income is suspended for fixed income securities that are in default or when the receipt of interest payments is in doubt. Realized capital gains and losses are determined on a specific identification basis. REINSURANCE RECOVERABLE The Company has reinsurance agreements whereby substantially all premiums, contract charges, credited interest, policy benefits and certain expenses are ceded to ALIC. Such amounts are reflected net of such reinsurance in the statements of operations and comprehensive income. Investment income earned on the assets which support contractholder funds and the reserve for life-contingent contract benefits is not included in the Company's financial statements as those assets are owned and managed under terms of reinsurance agreements. Reinsurance recoverable and the related reserve for life-contingent contract benefits and contractholder funds are reported separately in the statements of financial position. The Company continues to have primary liability as the direct insurer for risks reinsured. RECOGNITION OF INSURANCE REVENUE AND RELATED BENEFITS AND INTEREST CREDITED Interest-sensitive life contracts are insurance contracts whose terms are not fixed and guaranteed. The terms that may be changed include premiums paid by the contractholder, interest credited to the contractholder account balance and one or more amounts assessed against the contractholder. Premiums from these contracts are reported as deposits to contractholder funds. Contract charge revenue consists of fees assessed against the contractholder account balance for cost of insurance (mortality risk), contract administration and surrender charges. Contract benefits include interest credited to contracts and claims incurred in excess of the related contractholder account balance. Contracts that do not subject the Company to significant risk arising from mortality or morbidity are referred to as investment contracts. Fixed rate annuities, market value adjusted annuities and immediate annuities without life contingencies are considered investment contracts. Deposits received for such contracts are reported as deposits to contractholder funds. Contract charge revenue for investment contracts consists of charges assessed against the contractholder account balance for contract 7 NORTHBROOK LIFE INSURANCE COMPANY NOTES TO FINANCIAL STATEMENTS ($ in thousands) administration and surrender charges. Contract benefits include interest credited and claims incurred in excess of the related contractholder account balance. Crediting rates for fixed rate annuities and interest-sensitive life contracts are adjusted periodically by the Company to reflect current market conditions. Investment contracts also include variable annuity and variable life contracts which are sold as Separate Accounts products. The assets supporting these products are legally segregated and available only to settle Separate Accounts contract obligations. Deposits received are reported as Separate Accounts liabilities. The Company's contract charge revenue for these contracts consists of charges assessed against the Separate Accounts fund balances for contract maintenance, administration, mortality, expense and surrenders. All premiums, contract charges, contract benefits and interest credited are reinsured. INCOME TAXES The income tax provision is calculated under the liability method and presented net of reinsurance. Deferred tax assets and liabilities are recorded based on the difference between the financial statement and tax bases of assets and liabilities at the enacted tax rates. Deferred income taxes arise primarily from unrealized capital gains and losses on fixed income securities carried at fair value and differences in the tax bases of investments. SEPARATE ACCOUNTS The Company issues deferred variable annuity and variable life contracts, the assets and liabilities of which are legally segregated and recorded as assets and liabilities of the Separate Accounts. Absent any contract provisions wherein the Company contractually guarantees either a minimum return or account value to the beneficiaries of the contractholders in the form of a death benefit, the contractholders bear the investment risk that the Separate Accounts' funds may not meet their stated investment objectives. The assets of the Separate Accounts are carried at fair value. Separate Accounts liabilities represent the contractholders' claims to the related assets and are carried at the fair value of the assets. In the event that the asset value of certain contractholder accounts are projected to be below the value guaranteed by the Company, a liability is established through a charge to earnings. Investment income and realized capital gains and losses of the Separate Accounts accrue directly to the contractholders and therefore, are not included in the Company's statements of operations and comprehensive income. Revenues to the Company from Separate Accounts consist of contract maintenance and administration fees, and mortality, surrender and expense charges. RESERVE FOR LIFE-CONTINGENT CONTRACT BENEFITS The reserve for life-contingent contract benefits, which relates to immediate annuities with life contingencies and certain variable annuity contract guarantees, is computed on the basis of assumptions as to mortality, future investment yields, terminations and expenses at the time the policy is issued. These assumptions include provisions for adverse deviation and generally vary by such characteristics as type of coverage, year 8 NORTHBROOK LIFE INSURANCE COMPANY NOTES TO FINANCIAL STATEMENTS ($ in thousands) of issue and policy duration. Detailed reserve assumptions and reserve interest rates are outlined in Note 7. CONTRACTHOLDER FUNDS Contractholder funds arise from the issuance of interest-sensitive life and certain investment contracts. Deposits received are recorded as interest-bearing liabilities. Contractholder funds are equal to deposits received, net of commissions, and interest credited to the benefit of the contractholder less withdrawals, mortality charges and administrative expenses. Detailed information on crediting rates and surrender and withdrawal protection on contractholder funds are outlined in Note 7. USE OF ESTIMATES The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. NEW ACCOUNTING STANDARDS In 1999, the Company adopted Statement of Position ("SOP") 97-3, "Accounting by Insurance and Other Enterprises for Insurance-Related Assessments." The SOP provides guidance concerning when to recognize a liability for insurance-related assessments and how those liabilities should be measured. Specifically, insurance-related assessments should be recognized as liabilities when all of the following criteria have been met: 1) an assessment has been imposed or it is probable that an assessment will be imposed, 2) the event obligating an entity to pay an assessment has occurred and 3) the amount of the assessment can be reasonably estimated. Adoption of this statement was not material to the Company's results of operations or financial position. 3. RELATED PARTY TRANSACTIONS REINSURANCE The Company has reinsurance agreements whereby substantially all premiums, contract charges, credited interest, policy benefits and certain expenses are ceded to ALIC and reflected net of such reinsurance in the statements of operations and comprehensive income. Reinsurance recoverable and the related reserve for life-contingent contract benefits and contracholder funds are reported separately in the statements of financial position. The Company continues to have primary liability as the direct insurer for risks reinsured. Investment income earned on the assets which support contractholder funds and the reserve for life-contingent contract benefits is not included in the Company's financial statements as those assets are owned and managed under the terms of the reinsurance agreements. The following amounts were ceded to ALIC under reinsurance agreements. 9 NORTHBROOK LIFE INSURANCE COMPANY NOTES TO FINANCIAL STATEMENTS ($ in thousands)
YEAR ENDED DECEMBER 31, ----------------------- 1999 1998 1997 ---- ---- ---- Premiums $ 2,966 $ 2,528 $ 1,979 Contract charges 118,290 102,218 83,559 Credited interest, policy benefits, and certain expenses 222,513 217,428 201,526
BUSINESS OPERATIONS The Company utilizes services provided by AIC and ALIC and business facilities owned or leased, and operated by AIC in conducting its business activities. The Company reimburses AIC and ALIC for the operating expenses incurred on behalf of the Company. The Company is charged for the cost of these operating expenses based on the level of services provided. Operating expenses, including compensation and retirement and other benefit programs, allocated to the Company were $33,892, $26,230 and $23,978 in 1999, 1998 and 1997, respectively. Of these costs, the Company retains investment related expenses. All other costs are ceded to ALIC under reinsurance agreements. 4. EXCLUSIVE DISTRIBUTION AGREEMENT The Company has a strategic alliance with Dean Witter to develop, market and distribute proprietary savings and life insurance products through Morgan Stanley Dean Witter Financial Advisors. Affiliates of Dean Witter are the investment managers for the Morgan Stanley Dean Witter Variable Investment Series, Morgan Stanley Universal Funds, Inc. and the Van Kampen American Capital Life Investment Trust, the funds in which certain assets of the Separate Accounts products are invested. Under the terms of the alliance, the Company has agreed to use Dean Witter as an exclusive distribution channel for the Company's products. In addition to the Company's products, Dean Witter markets other products which compete with those of the Company. Pursuant to the alliance agreement, Dean Witter provides approximately half of the statutory capital necessary to maintain these products on the Company's books through loans to a subsidiary of AIC. AIC unconditionally guarantees the repayment of these loans. The Company shares approximately half the net profits with Dean Witter on contracts written under the alliance. The strategic alliance is cancelable for new business by either party by giving 30 days written notice, however, the Company believes the benefits derived by Dean Witter will preserve the alliance. 10 NORTHBROOK LIFE INSURANCE COMPANY NOTES TO FINANCIAL STATEMENTS ($ in thousands) 5. INVESTMENTS FAIR VALUES The amortized cost, gross unrealized gains and losses, and fair value for fixed income securities are as follows:
GROSS UNREALIZED AMORTIZED --------------------------- FAIR COST GAINS LOSSES VALUE --------------- ----------- ------------- ------------- AT DECEMBER 31, 1999 U.S. government and agencies $ 8,660 $ 131 $ (57) $ 8,734 Municipal 1,155 6 (108) 1,053 Corporate 61,049 26 (2,541) 58,534 Mortgage-backed securities 18,341 822 (486) 18,677 ------- ------- ------- ------- Total fixed income securities $89,205 $ 985 $(3,192) $86,998 ======= ======= ======= ======= AT DECEMBER 31, 1998 U.S. government and agencies $ 8,648 $ 1,469 $ -- $10,117 Municipal 590 11 -- 601 Corporate 33,958 1,634 (16) 35,576 Mortgage-backed securities 37,960 2,250 (168) 40,042 ------- ------- ------- ------- Total fixed income securities $81,156 $ 5,364 $ (184) $86,336 ======= ======= ======= =======
SCHEDULED MATURITIES The scheduled maturities for fixed income securities are as follows at December 31, 1999:
AMORTIZED FAIR COST VALUE ---- ----- Due in one year or less $ 50 $ 50 Due after one year through five years 16,690 16,538 Due after five years through ten years 46,933 44,542 Due after ten years 7,191 7,191 ------- ------ 70,864 68,321 Mortgage-backed securities 18,341 18,677 ------- ------- Total $89,205 $86,998 ======= =======
Actual maturities may differ from those scheduled as a result of prepayments by the issuers. 11 NORTHBROOK LIFE INSURANCE COMPANY NOTES TO FINANCIAL STATEMENTS ($ in thousands)
NET INVESTMENT INCOME YEAR ENDED DECEMBER 31, 1999 1998 1997 ---- ---- ---- Fixed income securities $ 5,881 $ 5,616 $ 5,364 Short-term investments 261 190 84 ------- ------- ------- Investment income, before expense 6,142 5,806 5,448 Investment expense 132 115 302 ------- ------- ------- Net investment income $ 6,010 $ 5,691 $ 5,146 ======= ======= ======= REALIZED CAPITAL GAINS AND LOSSES YEAR ENDED DECEMBER 31, 1999 1998 1997 ------- ------- ------- Fixed income securities $ 510 $ 2 $ (70) Short-term investments -- -- 2 ------- ------- ------- Realized capital gains and losses 510 2 (68) Income taxes (178) (1) 24 ------- ------- ------- Realized capital gains and losses, after tax $ 332 $ 1 $ (44) ======= ======= =======
Excluding calls and prepayments, gross gains of $629 were realized on sales of fixed income securities during 1999 and gross losses of $119, $9 and $70 were realized on sales of fixed income securities during 1999, 1998 and 1997, respectively. There were no gross gains realized on sales of fixed income securities during 1998 and 1997. UNREALIZED NET CAPITAL GAINS AND LOSSES Unrealized net capital gains on fixed income securities included in shareholder's equity at December 31, 1999 are as follows:
COST/ FAIR GROSS UNREALIZED UNREALIZED AMORTIZED COST VALUE GAINS LOSSES NET LOSSES -------------- ----- ----- ------ ---------- Fixed income securities $ 89,205 $ 86,998 $ 985 $ (3,192) $ (2,207) ======== ======== ======== ======== Deferred income taxes 772 -------- Unrealized net capital losses $ (1,435) ======== CHANGE IN UNREALIZED NET CAPITAL GAINS YEAR ENDED DECEMBER 31, 1999 1998 1997 -------- -------- -------- Fixed income securities $ (7,387) $ 1,269 $ 1,932 Deferred income taxes 2,585 (444) (676) -------- -------- -------- (Decrease) increase in unrealized net capital gains $ (4,802) $ 825 $ 1,256 ======== ======== ========
SECURITIES ON DEPOSIT At December 31, 1999, fixed income securities with a carrying value of $7,856 were on deposit with regulatory authorities as required by law. 12 NORTHBROOK LIFE INSURANCE COMPANY NOTES TO FINANCIAL STATEMENTS ($ in thousands) 6. FINANCIAL INSTRUMENTS In the normal course of business, the Company invests in various financial assets and incurs various financial liabilities. The fair value estimates of financial instruments presented below are not necessarily indicative of the amounts the Company might pay or receive in actual market transactions. Potential taxes and other transaction costs have not been considered in estimating fair value. The disclosures that follow do not reflect the fair value of the Company as a whole since a number of the Company's significant assets (including reinsurance recoverable) and liabilities (including interest-sensitive life insurance reserves and deferred income taxes) are not considered financial instruments and are not carried at fair value. Other assets and liabilities considered financial instruments, such as accrued investment income and cash are generally of a short-term nature. Their carrying values are assumed to approximate fair value. FINANCIAL ASSETS The carrying value and fair value of financial assets at December 31, are as follows:
1999 1998 ---- ---- CARRYING FAIR CARRYING FAIR VALUE VALUE VALUE VALUE ----- ----- ----- ----- Fixed income securities $ 86,998 $ 86,998 $ 86,336 $ 86,336 Short-term investments 3,170 3,170 5,083 5,083 Separate Accounts 8,211,996 8,211,996 7,031,083 7,031,083
Fair values for fixed income securities are based on quoted market prices where available. Non-quoted securities are valued based on discounted cash flows using current interest rates for similar securities. Short-term investments are highly liquid investments with maturities of less than one year whose carrying value are deemed to approximate fair value. Separate Accounts assets are carried in the statements of financial position at fair value based on quoted market prices. FINANCIAL LIABILITIES The carrying value and fair value of financial liabilities at December 31, are as follows:
1999 1998 ---- ---- CARRYING FAIR CARRYING FAIR VALUE VALUE VALUE VALUE ---------- ---------- ---------- ---------- Contractholder funds on investment contracts $1,735,843 $1,675,910 $1,839,114 $1,814,684 Separate Accounts 8,211,996 8,211,996 7,031,083 7,031,083
The fair value of contractholder funds on investment contracts is based on the terms of the underlying contracts. Reserves on investment contracts with no stated maturities (single premium and flexible premium deferred annuities) are valued at the account balance less surrender charges. The fair value of immediate annuities and annuities without life contingencies with fixed terms is estimated using discounted cash flow calculations based on interest rates currently offered for contracts with similar terms and durations. Separate Accounts liabilities are carried at the fair value of the underlying assets. 13 NORTHBROOK LIFE INSURANCE COMPANY NOTES TO FINANCIAL STATEMENTS ($ in thousands) 7. RESERVE FOR LIFE-CONTINGENT CONTRACT BENEFITS AND CONTRACTHOLDER FUNDS At December 31, the reserve for life-contingent contract benefits consists of the following:
1999 1998 ---- ---- Immediate annuities: Structured settlement annuities $109,907 $108,215 Other immediate annuities 40,680 36,840 -------- -------- Total life-contingent contract benefits $150,587 $145,055 ======== ========
The assumptions for mortality generally utilized in calculating reserves include, the U.S. population with projected calendar year improvements and age setbacks for impaired lives for structured settlement annuities; and the 1983 group annuity mortality table for other immediate annuities. Interest rate assumptions vary from 3.5% to 10.0% for immediate annuities. Other estimation methods used include the present value of contractually fixed future benefits for structured settlement annuities and other immediate annuities. Premium deficiency reserves are established, if necessary, for the structured settlement annuity business, to the extent the unrealized gains on fixed income securities would result in a premium deficiency had those gains actually been realized. The Company did not have a premium deficiency reserve at December 31, 1999 and 1998. At December 31, contractholder funds consists of the following:
1999 1998 ---- ---- Interest-sensitive life $ 173,867 $ 178,589 Fixed annuities: Immediate annuities 78,197 77,291 Deferred annuities 1,619,869 1,747,242 ---------- ---------- Total contractholder funds $1,871,933 $2,003,122 ========== ==========
Contractholder funds are equal to deposits received net of commissions and interest credited to the benefit of the contractholder less withdrawals, mortality charges and administrative expenses. Interest rates credited range from 4.0% to 7.2% for interest-sensitive life contracts; 3.5% to 10.2% for immediate annuities and 3.4% to 8.0% for deferred annuities. Withdrawal and surrender charge protection includes: i) for interest- sensitive life, either a percentage of account balance or dollar amount grading off generally over 20 years; and, ii) for deferred annuities not subject to a market value adjustment, either a declining or a level percentage charge generally over nine years or less. Approximately 25% of deferred annuities are subject to a market value adjustment. 14 NORTHBROOK LIFE INSURANCE COMPANY NOTES TO FINANCIAL STATEMENTS ($ in thousands) 8. CORPORATION RESTRUCTURING On November 10, 1999, the Corporation announced a series of strategic initiatives to aggressively expand its selling and service capabilities. The Corporation also announced that it is implementing a program to reduce expenses by approximately $600 million. The reduction will result in the elimination of approximately 4,000 current non-agent positions, across all employment grades and categories by the end of 2000, or approximately 10% of the Corporation's non-agent work force. The impact of the reduction in employee positions is not expected to materially impact the results of operations of the Company. These cost reductions are part of a larger initiative to redeploy the cost savings to finance new initiatives including investments in direct access and internet channels for new sales and service capabilities, new competitive pricing and underwriting techniques, new agent and claim technology and enhanced marketing and advertising. As a result of the cost reduction program, the Corporation recorded restructuring and related charges of $81 million pretax during the fourth quarter of 1999. The Corporation anticipates that additional pretax restructuring related charges of approximately $100 million will be expensed as incurred throughout 2000. The Company's allocable share of these expenses were immaterial in 1999 and are expected to be immaterial in 2000. 9. INCOME TAXES The Company joins the Corporation and its other eligible domestic subsidiaries (the "Allstate Group") in the filing of a consolidated federal income tax return and is party to a federal income tax allocation agreement (the "Allstate Tax Sharing Agreement"). Under the Allstate Tax Sharing Agreement, the Company pays to or receives from the Corporation the amount, if any, by which the Allstate Group's federal income tax liability is affected by virtue of inclusion of the Company in the consolidated federal income tax return. Effectively, this results in the Company's annual income tax provision being computed, with adjustments, as if the Company filed a separate return. Prior to June 30, 1995, the Corporation was a subsidiary of Sears Roebuck & Co. ("Sears") and, with its eligible domestic subsidiaries, was included in the Sears consolidated federal income tax return and federal income tax allocation agreement. Effective June 30, 1995, the Corporation and Sears entered into a new tax sharing agreement, which governs their respective rights and obligations with respect to federal income taxes for all periods during which the Corporation was a subsidiary of Sears, including the treatment of audits of tax returns for such periods. The Internal Revenue Service ("IRS") has completed its review of the Allstate Group's federal income tax returns through the 1993 tax year. Any adjustments that may result from IRS examinations of tax returns are not expected to have a material impact on the financial position, liquidity or results of operations of the Company. 15 NORTHBROOK LIFE INSURANCE COMPANY NOTES TO FINANCIAL STATEMENTS ($ in thousands) The components of the deferred income tax assets and liabilities at December 31, are as follows:
1999 1998 ---- ---- DEFERRED ASSETS Unrealized net capital losses $ 772 $ -- ------- ------- Total deferred assets 772 -- DEFERRED LIABILITIES Difference in tax bases of investments (1,518) (1,503) Unrealized net capital gains -- (1,813) ------- ------- Total deferred liabilities (1,518) (3,316) ------- ------- Net deferred liability $ (746) $(3,316) ======= =======
The components of income tax expense for the year ended December 31, are as follows:
1999 1998 1997 ---- ---- ---- Current $ 2,249 $ 1,797 $ 1,843 Deferred 15 198 (87) ------- ------- ------- Total income tax expense $ 2,264 $ 1,995 $ 1,756 ======= ======= =======
The Company paid income taxes of $1,908, $129 and $2,236 in 1999, 1998 and 1997, respectively. A reconciliation of the statutory federal income tax rate to the effective income tax rate on income from operations for the year ended December 31, is as follows:
1999 1998 1997 ---- ---- ---- Statutory federal income tax rate 35.0% 35.0% 35.0% Tax-exempt income (0.1) (0.2) (0.4) Other (0.2) 0.2 -- ----- ----- ----- Effective income tax rate 34.7% 35.0% 34.6% ===== ===== =====
Prior to January 1, 1984, the Company was entitled to exclude certain amounts from taxable income and accumulate such amounts in a "policyholder surplus" account. The balance in this account at December 31, 1999, approximately $16, will result in federal income taxes payable of $6 if distributed by the Company. No provision for taxes has been made as the Company has no plan to distribute amounts from this account. No further additions to the account have been permitted since the Tax Reform Act of 1984. 10. STATUTORY FINANCIAL INFORMATION The Company's statutory capital and surplus was $83,746 and $68,883 at December 31, 1999 and 1998, respectively. The Company's statutory net income was $4,840, $3,518 and $2,908 for the years ended December 31, 1999, 1998 and 1997, respectively. 16 NORTHBROOK LIFE INSURANCE COMPANY NOTES TO FINANCIAL STATEMENTS ($ in thousands) PERMITTED STATUTORY ACCOUNTING PRACTICES The Company prepares its statutory financial statements in accordance with accounting practices prescribed or permitted by the Arizona Department of Insurance. Prescribed statutory accounting practices include a variety of publications of the National Association of Insurance Commissioners ("NAIC"), as well as state laws, regulations and general administrative rules. Permitted statutory accounting practices encompass all accounting practices not so prescribed. The Company does not follow any permitted statutory accounting practices that have a significant impact on statutory surplus or statutory net income. The NAIC's codification initiative has produced a comprehensive guide of statutory accounting principles, which the Company will implement in January 2001. The Company's state of domicile, Arizona, has passed legislation revising various statutory accounting requirements to conform to codification. These requirements are not expected to have a material impact on the statutory surplus of the Company. DIVIDENDS The ability of the Company to pay dividends is dependent on business conditions, income, cash requirements of the Company and other relevant factors. The payment of shareholder dividends by the Company without the prior approval of the state insurance regulator is limited to formula amounts based on net income and capital and surplus, determined in accordance with statutory accounting practices, as well as the timing and amount of dividends paid in the preceding twelve months. The maximum amount of dividends that the Company can distribute during 2000 without prior approval of the Arizona Department of Insurance is $4,840. RISKED-BASED CAPITAL The NAIC has a standard for assessing the solvency of insurance companies, which is referred to as risk-based capital ("RBC"). The requirement consists of a formula for determining each insurer's RBC and a model law specifying regulatory actions if an insurer's RBC falls below specified levels. The RBC formula for life insurance companies establishes capital requirements relating to insurance, business, asset and interest rate risks. At December 31, 1999, RBC for the Company was significantly above levels that would require regulatory action. 17 NORTHBROOK LIFE INSURANCE COMPANY NOTES TO FINANCIAL STATEMENTS ($ in thousands) 11. OTHER COMPREHENSIVE INCOME The components of other comprehensive income on a pretax and after-tax basis for the year ended December 31, are as follows:
1999 1998 1997 -------------------------- ---------------------------- ----------------------------- After- After- After- PRETAX TAX TAX PRETAX TAX TAX PRETAX TAX TAX ------- ------- ------- ------- ------- ------- ------- ------- ------- UNREALIZED CAPITAL GAINS AND LOSSES: - -------------------------------- Unrealized holding (losses) gains arising during the period $(6,877) $ 2,407 $(4,470) $ 1,271 $ (445) $ 826 $ 1,862 $ (652) $ 1,210 Less: reclassification adjustments 510 (178) 332 2 (1) 1 (70) 24 (46) ------- ------- ------- ------- ------- ------- ------- ------- ------- Unrealized net capital (losses) gains (7,387) 2,585 (4,802) 1,269 (444) 825 1,932 (676) 1,256 ------- ------- ------- ------- ------- ------- ------- ------- ------- Other comprehensive (loss) income $(7,387) $ 2,585 $(4,802) $ 1,269 $ (444) $ 825 $ 1,932 $ (676) $ 1,256 ======= ======= ======= ======= ======= ======= ======= ======= =======
12. COMMITMENTS AND CONTINGENT LIABILITIES REGULATION AND LEGAL PROCEEDINGS The Company's business is subject to the effects of a changing social, economic and regulatory environment. Public and regulatory initiatives have varied and have included employee benefit regulations, removal of barriers preventing banks from engaging in the securities and insurance business, tax law changes affecting the taxation of insurance companies, the tax treatment of insurance products and its impact on the relative desirability of various personal investment vehicles, and proposed legislation to prohibit the use of gender in determining insurance rates and benefits. The ultimate changes and eventual effects, if any, of these initiatives are uncertain. From time to time the Company is involved in pending and threatened litigation in the normal course of its business in which claims for monetary damages are asserted. In the opinion of management, the ultimate liability, if any, arising from such pending or threatened litigation is not expected to have a material effect on the results of operations, liquidity or financial position of the Company. GUARANTY FUNDS Under state insurance guaranty fund laws, insurers doing business in a state can be assessed, up to prescribed limits, for certain obligations of insolvent insurance companies to policyholders and claimants. The Company's expenses related to these funds have been immaterial. These expenses are ceded to ALIC under reinsurance agreements. MARKETING AND COMPLIANCE ISSUES Companies operating in the insurance and financial services markets have come under the scrutiny of regulators with respect to market conduct and compliance issues. Under certain circumstances, companies have been held responsible for providing incomplete or misleading sales materials and for replacing existing policies with policies that were less advantageous to the policyholder. The Company monitors its sales materials and 18 NORTHBROOK LIFE INSURANCE COMPANY NOTES TO FINANCIAL STATEMENTS ($ IN THOUSANDS) enforces compliance procedures to mitigate any exposure to potential litigation. The Company is a member of the Insurance Marketplace Standards Association, an organization which advocates ethical market conduct. 19 NORTHBROOK LIFE INSURANCE COMPANY SCHEDULE IV--REINSURANCE ($ IN THOUSANDS)
GROSS NET YEAR ENDED DECEMBER 31, 1999 AMOUNT CEDED AMOUNT - ---------------------------- ------ ----- ------ Life insurance in force $ 474,824 $ 474,824 $ - ========= ========= ======= Premiums and contract charges: Life and annuities $ 121,351 $ 121,351 $ - ========= ========= ======= GROSS NET YEAR ENDED DECEMBER 31, 1998 AMOUNT CEDED AMOUNT - ---------------------------- ------ ----- ------ Life insurance in force $ 494,256 $494,256 $ - ========== ======== ======= Premiums and contract charges: Life and annuities $ 104,746 $ 104,746 $ - ========= ========= ======= GROSS NET YEAR ENDED DECEMBER 31, 1997 AMOUNT CEDED AMOUNT - ---------------------------- ------ ----- ------ Life insurance in force $ 515,890 $515,890 $ - ========= ======== ======= Premiums and contract charges: Life and annuities $ 85,538 $ 85,538 $ - ========= ======== =======
20 ------------------------------------------------- NORTHBROOK VARIABLE ANNUITY ACCOUNT II FINANCIAL STATEMENTS AS OF DECEMBER 31, 1999 AND FOR THE PERIODS ENDED DECEMBER 31, 1999 AND DECEMBER 31, 1998, AND INDEPENDENT AUDITORS' REPORT INDEPENDENT AUDITORS' REPORT To the Board of Directors and Shareholder of Northbrook Life Insurance Company: We have audited the accompanying statement of net assets of Northbrook Variable Annuity Account II as of December 31, 1999 (including the assets of each of the individual sub-accounts which comprise the Account as disclosed in Note 1), and the related statements of operations for the period then ended and the statements of changes in net assets for each of the periods in the two year period then ended for each of the individual sub-accounts which comprise the Account. These financial statements are the responsibility of management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned at December 31, 1999 by correspondence with the account custodians. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, such financial statements present fairly, in all material respects, the financial position of Northbrook Variable Annuity Account II as of December 31, 1999 (including the assets of each of the individual sub-accounts which comprise the Account), and the results of operations for each of the individual sub-accounts for the period then ended and the changes in their net assets for each of the periods in the two year period then ended in conformity with generally accepted accounting principles. /s/ Deloitte & Touche LLP Chicago, Illinois March 27, 2000 NORTHBROOK VARIABLE ANNUITY ACCOUNT II
STATEMENT OF NET ASSETS DECEMBER 31, 1999 - ----------------------------------------------------------------------------------------------------------------- ASSETS Allocation to Sub-Accounts investing in the Morgan Stanley Dean Witter Variable Investment Series: Money Market, 399,687,085 shares (cost $399,687,085) $ 399,687,085 Quality Income Plus, 41,997,297 shares (cost $446,990,830) 414,093,354 Short-term Bond, 317,419 shares (cost $3,155,163) 3,136,095 High Yield, 59,754,185 shares (cost $345,269,007) 258,735,614 Utilities, 23,208,039 shares (cost $363,178,521) 531,464,073 Income Builder, 6,835,266 shares (cost $78,259,417) 78,195,436 Dividend Growth, 103,340,027 shares (cost $1,935,635,044) 1,893,189,362 Aggressive Equity, 2,583,544 shares (cost $31,052,866) 37,642,241 Capital Growth, 6,653,311 shares (cost $111,603,872) 157,855,670 Global Dividend Growth, 32,940,470 shares (cost $415,892,581) 475,660,390 European Growth, 17,029,397 shares (cost $373,802,190) 535,915,110 Pacific Growth, 12,523,323 shares (cost $90,737,991) 106,197,769 Equity, 35,605,525 shares (cost $1,143,964,322) 1,918,425,656 S&P 500 Index, 13,203,522 shares (cost $152,388,943) 177,323,303 Competitive Edge, "Best Ideas", 4,808,606 shares (cost $47,697,008) 59,482,451 Strategist, 34,150,688 shares (cost $483,599,787) 652,278,152 Allocation to Sub-Accounts investing in the Morgan Stanley Dean Witter Universal Funds, Inc.: Equity Growth, 3,599,965 shares (cost $58,801,975) 73,115,278 U.S. Real Estate, 575,145 shares (cost $5,616,194) 5,239,570 International Magnum, 817,294 shares (cost $10,124,267) 11,352,212 Emerging Markets Equity, 1,571,876 shares (cost $16,495,581) 21,754,769 Allocation to Sub-Accounts investing in the Van Kampen Life Investment Trust: Emerging Growth, 2,816,146 shares (cost $82,270,389) 130,190,408 ------------------ Total Assets 7,940,933,998 LIABILITIES Payable to Northbrook Life Insurance Company: Accrued contract maintenance charges 1,585,863 ------------------ Net Assets $7,939,348,135 ==================
See notes to financial statements. 2 NORTHBROOK VARIABLE ANNUITY ACCOUNT II
STATEMENTS OF OPERATIONS - ----------------------------------------------------------------------------------------------------------------------------------- Morgan Stanley Dean Witter Variable Investment Series Sub-Accounts ------------------------------------------------------------------------------ For the Period Ended December 31, 1999 ------------------------------------------------------------------------------ Quality Money Income Short-term High Market Plus Bond (a) Yield Utilities ------------- -------------- ------------ -------------- ------------- INVESTMENT INCOME Dividends $18,792,485 $29,581,022 $ 57,480 $43,293,002 $23,117,286 Charges from Northbrook Life Insurance Company: Mortality and expense risk (5,174,278) (5,889,185) (16,208) (4,018,180) (6,616,560) Administrative expense (397,391) (458,506) (1,199) (307,202) (514,744) ------------- -------------- ------------ -------------- ------------- Net investment income (loss) 13,220,816 23,233,331 40,073 38,967,620 15,985,982 ------------- -------------- ------------ -------------- ------------- REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS Realized gains (losses) from sales of investments: Proceeds from sales 450,473,606 91,452,155 2,359,119 120,337,868 77,317,835 Cost of investments sold 450,473,606 93,902,304 2,359,900 151,639,171 53,406,420 ------------- -------------- ------------ -------------- ------------- Net realized gains (losses) - (2,450,149) (781) (31,301,303) 23,911,415 ------------- -------------- ------------ -------------- ------------- Change in unrealized gains (losses) - (47,274,110) (19,068) (15,834,237) 14,087,560 ------------- -------------- ------------ -------------- ------------- Net gains (losses) on investments - (49,724,259) (19,849) (47,135,540) 37,998,975 ------------- -------------- ------------ -------------- ------------- CHANGE IN NET ASSETS RESULTING FROM OPERATIONS $13,220,816 $(26,490,928) $ 20,224 $ (8,167,920) $53,984,957 ============= ============== ============ ============== =============
(a) For the Period Beginning May 3, 1999 and Ending December 31, 1999 See notes to financial statements. 3 NORTHBROOK VARIABLE ANNUITY ACCOUNT II
STATEMENTS OF OPERATIONS - ------------------------------------------------------------------------------------------------------------------------------------ Morgan Stanley Dean Witter Variable Investment Series Sub-Accounts ------------------------------------------------------------------------------ For the Period Ended December 31, 1999 ------------------------------------------------------------------------------ Global Income Dividend Aggressive Capital Dividend Builder Growth Equity (a) Growth Growth ------------- -------------- ------------ -------------- ------------- INVESTMENT INCOME Dividends $5,656,529 $ 344,715,375 $ 8,016 $16,465,625 $42,276,039 Charges from Northbrook Life Insurance Company: Mortality and expense risk (1,074,813) (27,635,413) (90,882) (1,704,240) (5,962,699) Administrative expense (80,797) (2,120,551) (6,625) (131,437) (459,161) ------------- -------------- ------------ -------------- ------------- Net investment income (loss) 4,500,919 314,959,411 (89,491) 14,629,948 35,854,179 ------------- -------------- ------------ -------------- ------------- REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS Realized gains (losses) from sales of investments: Proceeds from sales 22,078,410 271,852,893 9,380,824 25,783,061 67,497,277 Cost of investments sold 21,966,313 143,156,159 8,818,400 20,761,201 58,495,694 ------------- -------------- ------------ -------------- ------------- Net realized gains (losses) 112,097 128,696,734 562,424 5,021,860 9,001,583 ------------- -------------- ------------ -------------- ------------- Change in unrealized gains (losses) (428,270) (523,069,735) 6,589,375 18,225,024 11,267,752 ------------- -------------- ------------ -------------- ------------- Net gains (losses) on investments (316,173) (394,373,001) 7,151,799 23,246,884 20,269,335 ------------- -------------- ------------ -------------- ------------- CHANGE IN NET ASSETS RESULTING FROM OPERATIONS $4,184,746 $ (79,413,590) $7,062,308 $37,876,832 $56,123,514 ============= ============== ============ ============== =============
(a) For the Period Beginning May 3, 1999 and Ended December 31, 1999 See notes to financial statements. 4 NORTHBROOK VARIABLE ANNUITY ACCOUNT II
STATEMENTS OF OPERATIONS - --------------------------------------------------------------------------------------------------------------------------------- Morgan Stanley Dean Witter Variable Investment Series Sub-Accounts ---------------------------------------------------------------------------- For the Period Ended December 31, 1999 ---------------------------------------------------------------------------- Competitive European Pacific S&P 500 Edge Growth Growth Equity Index "Best Ideas" -------------- ------------- --------------- ------------- ------------- INVESTMENT INCOME Dividends $ 46,726,748 $ 708,269 $ 162,022,502 $ 505,872 $ 256,310 Charges from Northbrook Life Insurance Company: Mortality and expense risk (6,021,308) (942,881) (17,504,413) (1,480,933) (571,765) Administrative expense (462,358) (72,239) (1,335,632) (110,039) (42,508) -------------- ------------- --------------- ------------- ------------- Net investment income (loss) 40,243,082 (306,851) 143,182,457 (1,085,100) (357,963) -------------- ------------- --------------- ------------- ------------- REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS Realized gains (losses) from sales of investments: Proceeds from sales 166,759,231 204,696,580 71,908,669 10,680,473 8,151,769 Cost of investments sold 134,216,170 199,030,079 51,120,136 9,714,922 7,482,882 -------------- ------------- --------------- ------------- ------------- Net realized gains (losses) 32,543,061 5,666,501 20,788,533 965,551 668,887 -------------- ------------- --------------- ------------- ------------- Change in unrealized gains (losses) 43,557,813 34,854,630 497,325,723 20,320,510 10,507,911 -------------- ------------- --------------- ------------- ------------- Net gains (losses) on investments 76,100,874 40,521,131 518,114,256 21,286,061 11,176,798 -------------- ------------- --------------- ------------- ------------- CHANGE IN NET ASSETS RESULTING FROM OPERATIONS $116,343,956 $40,214,280 $ 661,296,713 $20,200,961 $10,818,835 ============== ============= =============== ============= =============
See notes to financial statements. 5 NORTHBROOK VARIABLE ANNUITY ACCOUNT II
STATEMENTS OF OPERATIONS - ----------------------------------------------------------------------------------------------------------------------------- Morgan Stanley Dean Witter Variable Investment Morgan Stanley Dean Witter Series Sub-Accounts Universal Funds, Inc. Sub-Accounts --------------------------- ------------------------------------------- For the Period Ended December 31, 1999 ------------------------------------------------------------------------ Capital Equity U.S. Real International Strategist Appreciation Growth Estate Magnum ------------- ------------ ------------- ------------ ------------- INVESTMENT INCOME Dividends $13,525,693 $ 431,345 $2,304,285 $ 268,634 $ 98,917 Charges from Northbrook Life Insurance Company: Mortality and expense risk (7,823,773) (93,215) (554,937) (55,126) (80,070) Administrative expense (602,540) (7,030) (40,931) (4,034) (5,870) ------------- ------------ ------------- ------------ ------------- Net investment income (loss) 5,099,380 331,100 1,708,417 209,474 12,977 ------------- ------------ ------------- ------------ ------------- REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS Realized gains (losses) from sales of investments: Proceeds from sales 65,492,020 36,005,812 5,611,630 3,634,072 9,573,057 Cost of investments sold 50,460,560 35,960,809 4,973,147 3,714,989 9,327,204 ------------- ------------ ------------- ------------ ------------- Net realized gains (losses) 15,031,460 45,003 638,483 (80,917) 245,853 ------------- ------------ ------------- ------------ ------------- Change in unrealized gains (losses) 68,404,657 1,824,853 12,913,775 (365,102) 1,391,382 ------------- ------------ ------------- ------------ ------------- Net gains (losses) on investments 83,436,117 1,869,856 13,552,258 (446,019) 1,637,235 ------------- ------------ ------------- ------------ ------------- CHANGE IN NET ASSETS RESULTING FROM OPERATIONS $88,535,497 $2,200,956 $15,260,675 $ (236,545) $ 1,650,212 ============= ============ ============= ============ =============
See notes to financial statements. 6 NORTHBROOK VARIABLE ANNUITY ACCOUNT II
STATEMENTS OF OPERATIONS - ------------------------------------------------------------------------------------------------------------ Morgan Stanley Van Kampen Dean Witter Life Universal Funds Investment Inc. Sub-Accounts Trust Sub-Account ------------------- ------------------- For the Period Ended December 31, 1999 ------------------------------------------ Emerging Markets Emerging Equity Growth ------------------- ------------------- INVESTMENT INCOME Dividends $ 1,768 $ - Charges from Northbrook Life Insurance Company: Mortality and expense risk (116,835) (600,044) Administrative expense (8,607) (43,889) ------------------- ------------------- Net investment income (loss) (123,674) (643,933) ------------------- ------------------- REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS Realized gains (losses) from sales of investments: Proceeds from sales 24,519,251 8,038,290 Cost of investments sold 22,217,514 6,791,472 ------------------- ------------------- Net realized gains (losses) 2,301,737 1,246,818 ------------------- ------------------- Change in unrealized gains (losses) 5,429,367 46,420,306 ------------------- ------------------- Net gains (losses) on investments 7,731,104 47,667,124 ------------------- ------------------- CHANGE IN NET ASSETS RESULTING FROM OPERATIONS $ 7,607,430 $ 47,023,191 =================== ===================
See notes to financial statements. 7 NORTHBROOK VARIABLE ANNUITY ACCOUNT II
STATEMENT OF CHANGES IN NET ASSETS FOR THE YEAR ENDED DECEMBER 31, - --------------------------------------------------------------------------------------------------------------------------------- Morgan Stanley Dean Witter Variable Investment Series Sub-Accounts ----------------------------------------------------------------------------- Money Quality Income Short-term Market Plus Bond ------------------------------ ------------------------------ ------------ 1999 1998 1999 1998 1999 (a) -------------- -------------- -------------- -------------- ------------ FROM OPERATIONS Net investment income (loss) $ 13,220,816 $ 12,548,671 $ 23,233,331 $ 21,956,967 $ 40,073 Net realized gains (losses) - - (2,450,149) 882,678 (781) Change in unrealized gains (losses) - - (47,274,110) 7,935,179 (19,068) -------------- -------------- -------------- -------------- ------------ Change in net assets resulting from operations 13,220,816 12,548,671 (26,490,928) 30,774,824 20,224 -------------- -------------- -------------- -------------- ------------ FROM CAPITAL TRANSACTIONS Deposits 75,959,488 129,304,408 29,984,131 61,783,024 930,037 Benefit payments (12,372,372) (10,995,208) (7,891,742) (7,284,535) - Payments on termination (112,272,629) (87,146,553) (52,572,327) (51,273,025) (114,564) Contract maintenance charges (128,006) (141,332) (161,057) (198,787) (754) Transfers among the sub-accounts and with the Fixed Account - net 34,266,127 56,130,115 (24,709,758) 38,983,496 2,300,526 -------------- -------------- -------------- -------------- ------------ Change in net assets resulting from capital transactions (14,547,392) 87,151,430 (55,350,753) 42,010,173 3,115,245 -------------- -------------- -------------- -------------- ------------ INCREASE (DECREASE) IN NET ASSETS (1,326,576) 99,700,101 (81,841,681) 72,784,997 3,135,469 NET ASSETS AT BEGINNING OF PERIOD 400,933,840 301,233,739 495,852,338 423,067,341 - -------------- -------------- -------------- -------------- ------------ NET ASSETS AT END OF PERIOD $399,607,264 $400,933,840 $414,010,657 $495,852,338 $3,135,469 ============== ============== ============== ============== ============
(a) For the Period Beginning May 3, 1999 and Ended December 31, 1999 See notes to financial statements 8 NORTHBROOK VARIABLE ANNUITY ACCOUNT II
STATEMENT OF CHANGES IN NET ASSETS FOR THE YEAR ENDED DECEMBER 31, - ------------------------------------------------------------------------------------------------------------------------------------ Morgan Stanley Dean Witter Variable Investment Series Sub-Accounts -------------------------------------------------------------------------------------------- High Income Yield Utilities Builder ------------------------------ ------------------------------ ---------------------------- 1999 1998 1999 1998 1999 1998 -------------- -------------- -------------- -------------- ------------- ------------- FROM OPERATIONS Net investment income (loss) $ 38,967,620 $ 38,496,771 $ 15,985,982 $ 28,487,796 $ 4,500,919 $ 3,508,026 Net realized gains (losses) (31,301,303) (9,716,192) 23,911,415 19,386,662 112,097 (141,151) Change in unrealized gains (losses) (15,834,237) (58,494,693) 14,087,560 41,968,561 (428,270) (3,233,777) -------------- -------------- -------------- -------------- ------------- ------------- Change in net assets resulting from operations (8,167,920) (29,714,114) 53,984,957 89,843,019 4,184,746 133,098 -------------- -------------- -------------- -------------- ------------- ------------- FROM CAPITAL TRANSACTIONS Deposits 26,101,041 89,840,399 39,072,264 58,090,579 7,989,151 34,230,388 Benefit payments (4,009,045) (6,104,964) (8,484,832) (7,223,282) (1,104,145) (920,343) Payments on termination (35,111,312) (37,590,732) (50,808,054) (56,602,582) (5,408,027) (5,562,637) Contract maintenance charges (104,889) (129,431) (201,221) (207,332) (31,269) (31,038) Transfers among the sub-accounts and with the Fixed Account - net (57,088,792) (15,774,631) (10,204,178) 14,560,699 (11,305,739) 3,007,479 -------------- -------------- -------------- -------------- ------------- ------------- Change in net assets resulting from capital transactions (70,212,997) 30,240,641 (30,626,021) 8,618,082 (9,860,029) 30,723,849 -------------- -------------- -------------- -------------- ------------- ------------- INCREASE (DECREASE) IN NET ASSETS (78,380,917) 526,527 23,358,936 98,461,101 (5,675,283) 30,856,947 NET ASSETS AT BEGINNING OF PERIOD 337,064,860 336,538,333 507,998,999 409,537,898 83,855,103 52,998,156 -------------- -------------- -------------- -------------- ------------- ------------- NET ASSETS AT END OF PERIOD $258,683,943 $337,064,860 $531,357,935 $507,998,999 $78,179,820 $83,855,103 ============== ============== ============== ============== ============= =============
See notes to financial statements 9 NORTHBROOK VARIABLE ANNUITY ACCOUNT II
STATEMENT OF CHANGES IN NET ASSETS FOR THE YEAR ENDED DECEMBER 31, - --------------------------------------------------------------------------------------------------------------------------------- Morgan Stanley Dean Witter Variable Investment Series Sub-Accounts --------------------------------------------------------------------------------- Dividend Aggressive Capital Growth Equity Growth ---------------------------------- ------------- ------------------------------ 1999 1998 1999 (a) 1999 1998 ---------------- ---------------- ------------- -------------- -------------- FROM OPERATIONS Net investment income (loss) $ 314,959,411 $ 182,347,531 $ (89,491) $ 14,629,948 $ 7,626,924 Net realized gains (losses) 128,696,734 50,981,189 562,424 5,021,860 4,423,808 Change in unrealized gains (losses) (523,069,735) (11,845,338) 6,589,375 18,225,024 6,984,723 ---------------- ---------------- ------------- -------------- -------------- Change in net assets resulting from operations (79,413,590) 221,483,382 7,062,308 37,876,832 19,035,455 ---------------- ---------------- ------------- -------------- -------------- FROM CAPITAL TRANSACTIONS Deposits 188,251,624 365,505,119 12,119,932 9,505,220 17,877,989 Benefit payments (22,608,692) (20,959,842) (8,280) (1,116,070) (964,822) Payments on termination (178,336,682) (208,789,814) (180,619) (12,938,058) (15,020,571) Contract maintenance charges (827,903) (877,968) (8,488) (54,380) (50,900) Transfers among the sub-accounts and with the Fixed Account - net (100,954,098) (16,303,049) 18,649,870 (3,891,813) (10,068,182) ---------------- ---------------- ------------- -------------- -------------- Change in net assets resulting from capital transactions (114,475,751) 118,574,446 30,572,415 (8,495,101) (8,226,486) ---------------- ---------------- ------------- -------------- -------------- INCREASE (DECREASE) IN NET ASSETS (193,889,341) 340,057,828 37,634,723 29,381,731 10,808,969 NET ASSETS AT BEGINNING OF PERIOD 2,086,700,619 1,746,642,791 - 128,442,414 117,633,445 ---------------- ---------------- ------------- -------------- -------------- NET ASSETS AT END OF PERIOD $1,892,811,278 $2,086,700,619 $37,634,723 $157,824,145 $128,442,414 ================ ================ ============= ============== ==============
(a) For the Period Beginning May 3, 1999 and Ended December 31, 1999 See notes to financial statements 10 NORTHBROOK VARIABLE ANNUITY ACCOUNT II
STATEMENT OF CHANGES IN NET ASSETS FOR THE YEAR ENDED DECEMBER 31, - ----------------------------------------------------------------------------------------------------------------------------------- Morgan Stanley Dean Witter Variable Investment Series Sub-Accounts ------------------------------------------------------------------------------------------------- Global Dividend European Pacific Growth Growth Growth ------------------------------- -------------------------------- ------------------------------ 1999 1998 1999 1998 1999 1998 -------------- --------------- --------------- --------------- --------------- ------------- FROM OPERATIONS Net investment income (loss) $ 35,854,179 $ 50,158,952 $ 40,243,082 $ 26,853,320 $ (306,851) $1,965,499 Net realized gains (losses) 9,001,583 9,838,298 32,543,061 24,492,627 5,666,501 (23,716,625) Change in unrealized gains (losses) 11,267,752 (15,619,557) 43,557,813 25,369,951 34,854,630 14,937,413 -------------- --------------- --------------- --------------- --------------- ------------- Change in net assets resulting from operations 56,123,514 44,377,693 116,343,956 76,715,898 40,214,280 (6,813,713) -------------- --------------- --------------- --------------- --------------- ------------- FROM CAPITAL TRANSACTIONS Deposits 24,612,447 54,785,412 33,605,981 77,755,711 12,935,903 5,413,539 Benefit payments (5,520,386) (4,782,958) (3,672,213) (4,657,657) (522,120) (480,704) Payments on termination (36,599,848) (45,079,876) (44,372,248) (44,010,271) (5,927,181) (5,342,736) Contract maintenance charges (198,686) (209,379) (186,281) (196,986) (41,208) (24,050) Transfers among the sub-accounts and with the Fixed Account - net (16,822,685) (45,403,643) (38,047,377) 8,524,933 12,162,641 (7,740,250) -------------- --------------- --------------- --------------- --------------- ------------- Change in net assets resulting from capital transactions (34,529,158) (40,690,444) (52,672,138) 37,415,730 18,608,035 (8,174,201) -------------- --------------- --------------- --------------- --------------- ------------- INCREASE (DECREASE) IN NET ASSETS 21,594,356 3,687,249 63,671,818 114,131,628 58,822,315 (14,987,914) NET ASSETS AT BEGINNING OF PERIOD 453,971,041 450,283,792 472,136,266 358,004,638 47,354,245 62,342,159 -------------- --------------- --------------- --------------- --------------- ------------- NET ASSETS AT END OF PERIOD $475,565,397 $ 453,971,041 $ 535,808,084 $ 472,136,266 $ 106,176,560 $47,354,245 ============== =============== =============== =============== =============== =============
See notes to financial statements 11 NORTHBROOK VARIABLE ANNUITY ACCOUNT II
STATEMENT OF CHANGES IN NET ASSETS FOR THE YEAR ENDED DECEMBER 31, - ------------------------------------------------------------------------------------------------------------------------------------ Morgan Stanley Dean Witter Variable Investment Series Sub-Accounts ----------------------------------------------------------------------------------------------- S&P 500 Competitive Edge Equity Index "Best Ideas" ---------------------------------- ----------------------------- ---------------------------- 1999 1998 1999 1998 (b) 1999 1998 (b) ---------------- ---------------- -------------- ------------- ------------- ------------- FROM OPERATIONS Net investment income (loss) $ 143,182,457 $ 97,599,586 $ (1,085,100) $ (170,910) $ (357,963) $ (214,440) Net realized gains (losses) 20,788,533 21,891,916 965,551 (34,337) 668,887 (346,888) Change in unrealized gains (losses) 497,325,723 101,407,443 20,320,510 4,613,850 10,507,911 1,277,534 ---------------- ---------------- -------------- ------------- ------------- ------------- Change in net assets resulting from operations 661,296,713 220,898,945 20,200,961 4,408,603 10,818,835 716,206 ---------------- ---------------- -------------- ------------- ------------- ------------- FROM CAPITAL TRANSACTIONS Deposits 167,149,976 172,405,792 62,363,357 20,590,308 14,308,748 19,126,765 Benefit payments (11,678,201) (8,143,648) (364,932) (59,990) (385,715) (167,624) Payments on termination (109,621,629) (87,506,544) (6,958,805) (592,621) (3,208,126) (422,743) Contract maintenance charges (626,104) (380,694) (52,042) (11,823) (20,818) (10,074) Transfers among the sub-accounts and with the Fixed Account - net 173,235,007 4,499,209 55,622,169 22,142,705 2,656,267 16,058,851 ---------------- ---------------- -------------- ------------- ------------- ------------- Change in net assets resulting from capital transactions 218,459,049 80,874,115 110,609,747 42,068,579 13,350,356 34,585,175 ---------------- ---------------- -------------- ------------- ------------- ------------- INCREASE (DECREASE) IN NET ASSETS 879,755,762 301,773,060 130,810,708 46,477,182 24,169,191 35,301,381 NET ASSETS AT BEGINNING OF PERIOD 1,038,286,770 736,513,710 46,477,182 - 35,301,381 - ---------------- ---------------- -------------- ------------- ------------- ------------- NET ASSETS AT END OF PERIOD $1,918,042,532 $1,038,286,770 $177,287,890 $46,477,182 $59,470,572 $35,301,381 ================ ================ ============== ============= ============= =============
(b) For the Period Beginning May 18, 1998 and Ended December 31, 1998 See notes to financial statements 12 NORTHBROOK VARIABLE ANNUITY ACCOUNT II
STATEMENT OF CHANGES IN NET ASSETS FOR THE YEAR ENDED DECEMBER 31, - ------------------------------------------------------------------------------------------------------------------------------------ Morgan Stanley Dean Witter Morgan Stanley Dean Witter Variable Investment Universal Funds, Inc. Series Sub-Accounts Sub-Accounts ------------------------------------------------------------ ----------------------------- Capital Equity Strategist Appreciation Growth ------------------------------ ---------------------------- ---------------------------- 1999 1998 1999 1998 1999 1998 (c) -------------- -------------- ------------- ------------- ------------- ------------- FROM OPERATIONS Net investment income (loss) $ 5,099,380 $ 49,765,425 $ 331,100 $ (251,058) $ 1,708,417 $ (78,711) Net realized gains (losses) 15,031,460 9,013,062 45,003 (47,279) 638,483 (211,792) Change in unrealized gains (losses) 68,404,657 48,207,735 1,824,853 (2,968,573) 12,913,775 1,399,530 -------------- -------------- ------------- ------------- ------------- ------------- Change in net assets resulting from operations 88,535,497 106,986,222 2,200,956 (3,266,910) 15,260,675 1,109,027 -------------- -------------- ------------- ------------- ------------- ------------- FROM CAPITAL TRANSACTIONS Deposits 53,336,082 73,192,883 1,292,309 12,585,227 18,427,169 21,346,469 Benefit payments (7,657,772) (6,681,194) (57,970) (277,813) (284,465) (354,060) Payments on termination (54,083,482) (53,776,482) (647,504) (2,046,795) (3,119,435) (593,813) Contract maintenance charges (236,109) (220,828) 3,365 (12,735) (21,923) (6,896) Transfers among the sub-accounts and with the Fixed Account - net 15,905,456 13,210,961 (34,073,925) (6,495,400) 17,161,540 4,176,388 -------------- -------------- ------------- ------------- ------------- ------------- Change in net assets resulting from capital transactions 7,264,175 25,725,340 (33,483,725) 3,752,484 32,162,886 24,568,088 -------------- -------------- ------------- ------------- ------------- ------------- INCREASE (DECREASE) IN NET ASSETS 95,799,672 132,711,562 (31,282,769) 485,574 47,423,561 25,677,115 NET ASSETS AT BEGINNING OF PERIOD 556,348,215 423,636,653 31,282,769 30,797,195 25,677,115 - -------------- -------------- ------------- ------------- ------------- ------------- NET ASSETS AT END OF PERIOD $652,147,887 $556,348,215 $ - $31,282,769 $73,100,676 $25,677,115 ============== ============== ============= ============= ============= =============
(c) For the Period Beginning March 16, 1998 and Ended December 31, 1998 See notes to financial statements 13 NORTHBROOK VARIABLE ANNUITY ACCOUNT II
STATEMENT OF CHANGES IN NET ASSETS FOR THE YEAR ENDED DECEMBER 31, - ------------------------------------------------------------------------------------------------------------------------------------ Morgan Stanley Dean Witter Universal Funds, Inc. Sub-Accounts ------------------------------------------------------------------------------------ Emerging Markets U.S. Real Estate International Magnum Equity -------------------------- --------------------------- --------------------------- 1999 1998 (b) 1999 1998 (c) 1999 1998 (c) ------------ ------------ ------------- ------------ ------------- ------------ FROM OPERATIONS Net investment income (loss) $ 209,474 $ 43,330 $ 12,977 $ (6,800) $ (123,674) $ (2,522) Net realized gains (losses) (80,917) (29,879) 245,853 (74,905) 2,301,737 (66,221) Change in unrealized gains (losses) (365,102) (56,788) 1,391,382 (175,857) 5,429,367 (177,275) ------------ ------------ ------------- ------------ ------------- ------------ Change in net assets resulting from operations (236,545) (43,337) 1,650,212 (257,562) 7,607,430 (246,018) ------------ ------------ ------------- ------------ ------------- ------------ FROM CAPITAL TRANSACTIONS Deposits 2,256,539 1,559,058 4,195,250 2,610,252 5,860,089 1,113,998 Benefit payments (18,349) - (11,957) (11,092) (4,713) - Payments on termination (219,432) (35,109) (236,057) (167,597) (593,151) (6,515) Contract maintenance charges (1,904) (537) (3,349) (1,018) (6,183) (407) Transfers among the sub-accounts and with the Fixed Account - net 1,478,675 499,465 2,293,294 1,289,569 7,427,993 597,902 ------------ ------------ ------------- ------------ ------------- ------------ Change in net assets resulting from capital transactions 3,495,529 2,022,877 6,237,181 3,720,114 12,684,035 1,704,978 ------------ ------------ ------------- ------------ ------------- ------------ INCREASE (DECREASE) IN NET ASSETS 3,258,984 1,979,540 7,887,393 3,462,552 20,291,465 1,458,960 NET ASSETS AT BEGINNING OF PERIOD 1,979,540 - 3,462,552 - 1,458,960 - ------------ ------------ ------------- ------------ ------------- ------------ NET ASSETS AT END OF PERIOD $5,238,524 $1,979,540 $11,349,945 $3,462,552 $21,750,425 $1,458,960 ============ ============ ============= ============ ============= ============
(b) For the Period Beginning May 18, 1998 and Ended December 31, 1998 (c) For the Period Beginning March 16, 1998 and Ended December 31, 1998 See notes to financial statements 14 NORTHBROOK VARIABLE ANNUITY ACCOUNT II
STATEMENT OF CHANGES IN NET ASSETS For the Year Ended December 31, - ----------------------------------------------------------------------------------------------------------- Van Kampen Life Investement Trust Sub-Account --------------------------------------------- Emerging Growth --------------------------------------------- 1999 1998 (a) --------------------- --------------------- FROM OPERATIONS Net investment income (loss) $ (643,933) $ (47,552) Net realized gains (losses) 1,246,818 (51,808) Change in unrealized gains (losses) 46,420,306 1,499,714 --------------------- --------------------- Change in net assets resulting from operations 47,023,191 1,400,354 --------------------- --------------------- FROM CAPITAL TRANSACTIONS Deposits 27,759,585 5,513,918 Benefit payments (201,304) - Payments on termination (3,202,433) (271,704) Contract maintenance charges (35,203) (2,526) Transfers among the sub-accounts and with the Fixed Account - net 49,182,955 2,997,575 --------------------- --------------------- Change in net assets resulting from capital transactions 73,503,600 8,237,263 --------------------- --------------------- INCREASE (DECREASE) IN NET ASSETS 120,526,791 9,637,617 NET ASSETS AT BEGINNING OF PERIOD 9,637,617 - --------------------- --------------------- NET ASSETS AT END OF PERIOD $ 130,164,408 $ 9,637,617 ===================== =====================
(a) For the Period Beginning March 16, 1998 and Ended December 31, 1998 See notes to financial statements 15 NORTHBROOK VARIABLE ANNUITY ACCOUNT II NOTES TO FINANCIAL STATEMENTS - -------------------------------------------------------------------------------- 1. ORGANIZATION Northbrook Variable Annuity Account II (the "Account"), a unit investment trust registered with the Securities and Exchange Commission under the Investment Company Act of 1940, is a Separate Account of Northbrook Life Insurance Company ("Northbrook Life"). The assets of the Account are legally segregated from those of Northbrook Life. Northbrook Life is wholly owned by Allstate Life Insurance Company, a wholly owned subsidiary of Allstate Insurance Company, which is wholly owned by The Allstate Corporation. Northbrook Life issues the Morgan Stanley Dean Witter Variable Annuity II and the Morgan Stanley Dean Witter Variable Annuity II AssetManager, the deposits of which are invested at the direction of the contractholders in the sub-accounts that comprise the Account. Absent any contract provisions wherein Northbrook Life contractually guarantees either a minimum return or account value to the beneficiaries of the contractholders in the form of a death benefit, the contractholders bear the investment risk that the sub-accounts may not meet their stated objectives. The sub-accounts invest in the following underlying mutual fund portfolios (collectively the "Funds"): MORGAN STANLEY DEAN WITTER VARIABLE INVESTMENT SERIES Money Market Capital Growth Quality Income Plus Global Dividend Growth Short-term Bond European Growth High Yield Pacific Growth Utilities Equity Income Builder S&P 500 Index Dividend Growth Competitive Edge "Best Ideas" Aggressive Equity Strategist MORGAN STANLEY DEAN WITTER UNIVERSAL FUNDS, INC. Equity Growth International Magnum U.S. Real Estate Emerging Markets Equity VAN KAMPEN LIFE INVESTMENT TRUST Emerging Growth Northbrook Life provides insurance and administrative services to the contractholders for a fee. Northbrook Life also maintains a fixed account ("Fixed Account"), to which contractholders may direct their deposits and receive a fixed rate of return. Northbrook Life has sole discretion to invest the assets of the Fixed Account, subject to applicable law. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES VALUATION OF INVESTMENTS - Investments consist of shares of the Funds and are stated at fair value based on quoted market prices at December 31, 1999. INVESTMENT INCOME - Investment income consists of dividends declared by the Funds and is recognized on the ex-dividend date. 16 REALIZED GAINS AND LOSSES - Realized gains and losses represent the difference between the proceeds from sales of portfolio shares by the Account and the cost of such shares, which is determined on a weighted average basis. FEDERAL INCOME TAXES - The Account intends to qualify as a segregated asset account as defined in the Internal Revenue Code ("Code"). As such, the operations of the Account are included in the tax return of Northbrook Life. Northbrook Life is taxed as a life insurance company under the Code. No federal income taxes are allocable to the Account as the Account did not generate taxable income. USE OF ESTIMATES - The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. 3. EXPENSES ADMINISTRATIVE EXPENSE CHARGE - Northbrook Life deducts an administrative expense charge daily at a rate equal to .10% per annum of the average daily net assets of the Account for both Morgan Stanley Dean Witter Variable Annuity II and Morgan Stanley Dean Witter Variable Annuity II AssetManager. CONTRACT MAINTENANCE CHARGE - Northbrook Life deducts an annual contract maintenance charge of $30 on each Morgan Stanley Dean Witter Variable Annuity II and $35 on each Morgan Stanley Dean Witter Variable Annuity II AssetManager contract anniversary and guarantees that this charge will not increase over the life of the contract. If certain conditions are met, this charge will be waived for Morgan Stanley Dean Witter Variable Annuity II AssetManager. MORTALITY AND EXPENSE RISK CHARGE - Northbrook Life assumes mortality and expense risks related to the operations of the Account and deducts charges daily based on the average daily net assets of the Account. The mortality and expense risk charge covers insurance benefits available with the contract and certain expenses of the contract. It also covers the risk that the current charges will not be sufficient in the future to cover the cost of administering the contract. Northbrook Life guarantees that the amount of this charge will not increase over the life of the contract. At the contractholder's discretion, additional options, primarily death benefits, may be purchased for an additional charge. 17 4. UNITS ISSUED AND REDEEMED (Units in whole amounts)
Morgan Stanley Dean Witter Variable Annuity II ----------------------------------------------------------------------------------------- Unit activity during 1999: ------------------------------------------------ Accumulated Units Outstanding Units Units Units Outstanding Unit Value December 31, 1998 Issued Redeemed December 31, 1999 December 31,1999 ------------------- ------------ ------------- ------------------- ------------------ Investments in the Morgan Stanley Dean Witter Variable Investment Series Sub-Accounts: Money Market 21,159,031 14,889,251 (18,506,888) 17,541,394 $ 13.46 Quality Income Plus 20,312,197 1,033,305 (4,473,358) 16,872,144 18.20 Short-term Bond - 347,635 (220,476) 127,159 10.07 High Yield 8,199,142 636,275 (2,648,721) 6,186,696 24.01 Utilities 13,541,542 727,904 (2,580,797) 11,688,649 32.87 Income Builder 2,979,980 562,566 (984,569) 2,557,977 13.00 Dividend Growth 36,334,173 1,704,445 (6,266,668) 31,771,950 35.38 Aggressive Equity - 1,736,286 (811,611) 924,675 14.48 Capital Growth 3,662,958 327,971 (739,762) 3,251,167 31.32 Global Dividend Growth 17,634,472 913,941 (3,171,090) 15,377,323 19.22 European Growth 8,967,887 1,483,799 (3,009,151) 7,442,535 43.42 Pacific Growth 6,325,967 8,987,636 (7,901,427) 7,412,176 8.78 Equity 12,608,741 2,288,532 (1,863,807) 13,033,466 78.28 S&P 500 Index 1,722,709 3,752,288 (745,579) 4,729,418 13.20 Competitive Edge, "Best Ideas" 1,432,745 764,913 (431,011) 1,766,647 12.18 Strategist 14,574,012 1,101,779 (2,402,382) 13,273,409 31.14 Captial Appreciation 1,440,936 89,955 (1,530,891) - - Investments in the Morgan Stanley Dean Witter Universal Funds, Inc. Sub-Accounts: Equity Growth 822,038 1,142,895 (311,090) 1,653,843 13.90 U.S. Real Estate 79,729 487,659 (337,388) 230,000 8.81 International Magnum 136,628 972,988 (828,047) 281,569 12.09 Emerging Markets Equity 82,002 2,454,699 (1,927,128) 609,573 13.64 Investments in the Van Kampen Life Investment Trust Sub-Account: Emerging Growth 254,704 1,931,376 (424,205) 1,761,875 24.19 Units relating to accrued contract maintenance charges are included in units redeemed.
18 4. UNITS ISSUED AND REDEEMED (Units in whole amounts)
Morgan Stanley Dean Witter Variable Annuity II with Enhanced Death Benefit Option, Performance Death Benefit Option or Performance Income Benefit Option ----------------------------------------------------------------------------------------- Unit activity during 1999: ------------------------------------------------ Accumulated Units Outstanding Units Units Units Outstanding Unit Value December 31, 1998 Issued Redeemed December 31, 1999 December 31,1999 ------------------- ------------ ------------- ------------------- ------------------ Investments in the Morgan Stanley Dean Witter Variable Investment Series Sub-Accounts: Money Market 8,938,860 19,548,212 (18,210,802) 10,276,270 $ 13.39 Quality Income Plus 5,109,593 1,234,183 (1,176,427) 5,167,349 18.10 Short-term Bond - 132,480 (10,931) 121,549 10.06 High Yield 5,304,510 1,595,314 (2,696,745) 4,203,079 23.88 Utilities 3,510,503 1,138,744 (632,588) 4,016,659 32.69 Income Builder 3,652,211 427,013 (965,993) 3,113,231 12.95 Dividend Growth 19,936,437 3,725,192 (3,607,794) 20,053,835 35.19 Aggressive Equity - 1,151,589 (29,577) 1,122,012 14.47 Capital Growth 1,687,847 394,284 (446,078) 1,636,053 31.15 Global Dividend Growth 8,929,904 1,233,435 (1,387,884) 8,775,455 19.12 European Growth 4,668,539 1,860,406 (2,084,797) 4,444,148 43.19 Pacific Growth 2,456,851 21,494,013 (19,892,379) 4,058,485 8.73 Equity 7,931,260 3,545,573 (1,102,040) 10,374,793 77.86 S&P 500 Index 2,003,301 4,944,770 (738,240) 6,209,831 13.17 Competitive Edge, "Best Ideas" 1,965,368 1,055,127 (539,084) 2,481,411 12.15 Strategist 5,639,152 1,686,811 (766,870) 6,559,093 30.97 Captial Appreciation 1,527,337 141,243 (1,668,580) - - Investments in the Morgan Stanley Dean Witter Universal Funds, Inc. Sub-Accounts: Equity Growth 1,530,819 1,779,604 (357,775) 2,952,648 13.87 U.S. Real Estate 80,782 158,681 (44,499) 194,964 8.79 International Magnum 170,897 282,082 (36,161) 416,818 12.06 Emerging Markets Equity 94,600 1,011,314 (416,698) 689,216 13.61 Investments in the Van Kampen Life Investment Trust Sub-Account: Emerging Growth 402,082 2,363,234 (242,627) 2,522,689 24.14 Units relating to accrued contract maintenance charges are included in units redeemed.
19 4. UNITS ISSUED AND REDEEMED (Units in whole amounts)
Morgan Stanley Dean Witter Variable Annuity II with Performance Benefit Combination Option or the Death Benefit Combination Option ----------------------------------------------------------------------------------------- Unit activity during 1999: ------------------------------------------------ Accumulated Units Outstanding Units Units Units Outstanding Unit Value December 31, 1998 Issued Redeemed December 31, 1999 December 31,1999 ------------------- ------------ ------------- ------------------- ------------------ Investments in the Morgan Stanley Dean Witter Variable Investment Series Sub-Accounts: Money Market 673,034 1,866,416 (1,276,029) 1,263,421 $ 13.17 Quality Income Plus 169,761 243,839 (85,461) 328,139 17.80 Short-term Bond - 41,250 (6,308) 34,942 10.05 High Yield 137,884 200,592 (48,340) 290,136 23.48 Utilities 159,860 243,466 (62,582) 340,744 32.16 Income Builder 164,457 165,256 (58,942) 270,771 12.91 Dividend Growth 528,141 1,129,219 (222,883) 1,434,477 34.61 Aggressive Equity - 478,757 (20,270) 458,487 14.45 Capital Growth 41,885 109,033 (22,261) 128,657 30.66 Global Dividend Growth 156,429 370,289 (38,382) 488,336 18.95 European Growth 175,357 306,278 (89,585) 392,050 42.51 Pacific Growth 52,484 567,553 (229,429) 390,608 8.66 Equity 221,631 797,425 (68,763) 950,293 76.58 S&P 500 Index 283,511 1,682,096 (88,165) 1,877,442 13.15 Competitive Edge, "Best Ideas" 178,762 367,543 (56,648) 489,657 12.13 Strategist 472,816 660,323 (128,301) 1,004,838 30.46 Captial Appreciation 77,885 24,001 (101,886) - Investments in the Morgan Stanley Dean Witter Universal Funds, Inc. Sub-Accounts: Equity Growth 154,201 385,914 (44,254) 495,861 13.84 U.S. Real Estate 37,193 78,203 (21,569) 93,827 8.77 International Magnum 31,933 168,374 (27,719) 172,588 12.04 Emerging Markets Equity 19,500 262,216 (71,124) 210,592 13.58 Investments in the Van Kampen Life Investment Trust Sub-Account: Emerging Growth 82,427 795,728 (59,300) 818,855 24.09 Units relating to accrued contract maintenance charges are included in units redeemed.
20 4. UNITS ISSUED AND REDEEMED (Units in whole amounts)
Morgan Stanley Dean Witter Variable Annuity II AssetManager ----------------------------------------------------------------------------------------- Unit activity during 1999: ------------------------------------------------ Accumulated Units Outstanding Units Units Units Outstanding Unit Value December 31, 1998 Issued Redeemed December 31, 1999 December 31,1999 ------------------- ------------ ------------- ------------------- ------------------ Investments in the Morgan Stanley Dean Witter Variable Investment Series Sub-Accounts: Money Market 81,705 547,117 (302,283) 326,539 $ 10.47 Quality Income Plus 178,028 261,748 (86,650) 353,126 9.76 Short-term Bond - 12,183 (1,013) 11,170 10.05 High Yield 93,600 198,142 (108,204) 183,538 8.61 Utilities 46,349 126,846 (35,756) 137,439 12.10 Income Builder 18,227 26,379 (6,560) 38,046 10.21 Dividend Growth 147,314 407,993 (113,515) 441,792 9.70 Aggressive Equity - 12,092 (637) 11,455 14.45 Capital Growth 6,192 25,144 (3,865) 27,471 12.74 Global Dividend Growth 15,232 73,526 (8,276) 80,482 11.16 European Growth 22,053 76,602 (13,809) 84,846 11.45 Pacific Growth 1,450 15,964 (565) 16,849 17.97 Equity 34,510 315,147 (72,422) 277,235 16.04 S&P 500 Index 35,394 164,599 (32,928) 167,065 12.29 Competitive Edge, "Best Ideas" 17,570 57,902 (16,105) 59,367 11.95 Strategist 70,036 157,240 (28,638) 198,638 11.95 Captial Appreciation 7,593 2,639 (10,232) - - Investments in the Morgan Stanley Dean Witter Universal Funds, Inc. Sub-Accounts: Equity Growth 14,358 48,936 (14,653) 48,641 13.56 U.S. Real Estate 3,294 12,931 (2,881) 13,344 8.84 International Magnum 6,589 31,388 (12,768) 25,209 10.80 Emerging Markets Equity 123 14,262 (5,452) 8,933 15.56 Investments in the Van Kampen Life Investment Trust Sub-Account: Emerging Growth 10,947 108,275 (29,083) 90,139 21.14 Units relating to accrued contract maintenance charges are included in units redeemed.
21 4. UNITS ISSUED AND REDEEMED (Units in whole amounts)
Morgan Stanley Dean Witter Variable Annuity II AssetManager with Death Benefit Option, Performance Death Benefit Option or Performance Income Benefit Option ----------------------------------------------------------------------------------------- Unit activity during 1999: ------------------------------------------------ Accumulated Units Outstanding Units Units Units Outstanding Unit Value December 31, 1998 Issued Redeemed December 31, 1999 December 31,1999 ------------------- ------------ ------------- ------------------- ------------------ Investments in the Morgan Stanley Dean Witter Variable Investment Series Sub-Accounts: Money Market 85,827 3,539,643 (3,188,969) 436,501 $ 10.45 Quality Income Plus 52,778 231,640 (34,594) 249,824 9.74 Short-term Bond - 11,499 (14) 11,485 10.04 High Yield 38,215 483,447 (398,427) 123,235 8.59 Utilities 33,289 144,058 (12,245) 165,102 12.07 Income Builder 16,832 39,978 (4,310) 52,500 10.19 Dividend Growth 165,990 572,766 (75,915) 662,841 9.69 Aggressive Equity 43,817 (3,302) 40,515 14.44 Capital Growth 5,153 27,978 (2,333) 30,798 12.71 Global Dividend Growth 38,311 96,752 (6,629) 128,434 11.14 European Growth 206,430 1,082,402 (1,093,929) 194,903 11.43 Pacific Growth 1,623 1,984,601 (1,947,775) 38,449 17.94 Equity 80,117 413,296 (22,082) 471,331 16.01 S&P 500 Index 104,952 278,154 (33,399) 349,707 12.26 Competitive Edge, "Best Ideas" 24,807 53,580 (5,567) 72,820 11.93 Strategist 24,056 159,660 (20,892) 162,824 11.92 Captial Appreciation 28,412 7,569 (35,981) - - Investments in the Morgan Stanley Dean Witter Universal Funds, Inc. Sub-Accounts: Equity Growth 17,925 101,942 (15,608) 104,259 13.54 U.S. Real Estate 17,463 15,867 (288) 33,042 8.82 International Magnum 9,575 21,239 (7) 30,807 10.78 Emerging Markets Equity 3,925 19,204 (6,431) 16,698 15.53 Investments in the Van Kampen Life Investment Trust Sub-Account: Emerging Growth 31,051 92,816 (15,183) 108,684 21.10 Units relating to accrued contract maintenance charges are included in units redeemed.
22 4. UNITS ISSUED AND REDEEMED (Units in whole amounts)
Morgan Stanley Dean Witter Variable Annuity II AssetManager with Performance Benefit Combination Option or the Death Benefit Combination Option ----------------------------------------------------------------------------------------- Unit activity during 1999: ------------------------------------------------ Accumulated Units Outstanding Units Units Units Outstanding Unit Value December 31, 1998 Issued Redeemed December 31, 1999 December 31,1999 ------------------- ------------ ------------- ------------------- ------------------ Investments in the Morgan Stanley Dean Witter Variable Investment Series Sub-Accounts: Money Market 15,056 187,536 (78,671) 123,921 $ 10.44 Quality Income Plus 81,071 114,629 (23,281) 172,419 9.72 Short-term Bond - 5,437 (1) 5,436 10.03 High Yield 11,399 31,391 (4,736) 38,054 8.58 Utilities 19,644 89,175 (8,355) 100,464 12.05 Income Builder 3,158 17,284 (219) 20,223 10.17 Dividend Growth 58,954 239,272 (41,852) 256,374 9.67 Aggressive Equity 45,639 (1,347) 44,292 14.43 Capital Growth 12,464 22,290 (7,271) 27,483 12.69 Global Dividend Growth 14,652 49,253 (940) 62,965 11.12 European Growth 10,221 74,577 (8,908) 75,890 11.41 Pacific Growth 4,550 83,644 (14,951) 73,243 17.91 Equity 30,606 315,914 (22,976) 323,544 15.98 S&P 500 Index 41,697 154,928 (28,522) 168,103 12.24 Competitive Edge, "Best Ideas" 12,369 19,922 (8,397) 23,894 11.91 Strategist 18,089 60,405 (9,525) 68,969 11.90 Captial Appreciation 11,985 454 (12,439) - - Investments in the Morgan Stanley Dean Witter Universal Funds, Inc. Sub-Accounts: Equity Growth - 16,478 (4) 16,474 13.52 U.S. Real Estate - 30,217 (6) 30,211 8.81 International Magnum - 21,800 (4) 21,796 10.76 Emerging Markets Equity 4,235 52,543 (5,538) 51,240 15.50 Investments in the Van Kampen Life Investment Trust Sub-Account: Emerging Growth 27,030 125,530 (22,931) 129,629 21.07 Units relating to accrued contract maintenance charges are included in units redeemed.
23 PART C OTHER INFORMATION 24. FINANCIAL STATEMENTS AND EXHIBITS (a) FINANCIAL STATEMENTS Northbrook Life Insurance Company Financial Statements and Northbrook Variable Annuity Account II Financial Statements are included in the Part B of this Registration Statement. (b) EXHIBITS (1) Resolution of the Board of Directors of Northbrook Life Insurance Company authorizing establishment of the Variable Annuity Account II (Previously filed in Post-Effective Amendment No. 13 to registrant's registration statement, File No. 033-35412, dated December 31, 1996) (2) Not applicable (3)(a) Form of Underwriting Agreement (Previously filed in Post-Effective Amendment No. 13 to registrant's registration statement, File No. 033-35412, dated December 31, 1996) (b) Form of General Agency Agreement (Previously filed in Post-Effective Amendment No. 13 to registrant's registration statement, File No. 033-35412, dated December 31, 1996) (4)(a) Form of Contract, Riders and Amendments for the Morgan Stanley Dean Witter Variable Annuity II (Previously filed in Post-Effective Amendment Nos. 13, 14, 20, 23 and 25 to this Registration Statement (File No. 033-35412) dated December 31, 199, February 28, 1997, March 3, 1999, and February 15, 2000. (4)(b) Form of Contract and Certificate Amendments for the Morgan Stanley Dean Witter Variable Annuity II Asset Manager (Previously filed in Post-Effective Amendment Nos. 19, and 20 to this Registration Statement (File No. 033-35412) dated June 5, 1998 and March 3, 1999 respectively. (4)(c) Form of Contract and Amendments for the Morgan Stanley Dan Witter Variable Annuity 3 (Previously filed in Post-Effective Amendment No. 24 to this Registration Statement (File No. 033-35412) dated March 2, 2000. (5))(a) Form of Application for the Morgan Stanley Dean Witter Variable Annuity II(Previously filed in Post-Effective Amendment No. 13 to this Registration Statement (File No. 033-35412) dated December 31, 1996) (b) Form of Application for the Morgan Stanley Dean Witter Variable Annuity II AssetManager (Previously filed in Post-Effective Amendment No. 19 to this Registration Statement (File No. 033-35412) dated June 5, 1998) (c) Form of Application for the Morgan Stanley Dean Witter Variable Annuity 3. (6)(a) Amended and Restated Articles of Incorporation and Articles of Redomestication of Northbrook Life Insurance Company (Incorporated herein by reference to Depositor's Form 10-K dated March 30, 1999) (b) Amended and Restated By-laws of Northbrook Life Insurance Company (Incorporated herein by reference to Depositor's Form 10-K dated March 30, 1999) (7) Not applicable (8) Forms of Participation Agreements: (a) Morgan Stanley Dean Witter Variable Investment Series (Previously filed in Post-Effective Amendment No. 12 to registrant's registration statement, File No. 033-35412, dated April 29, 1996) (b) Morgan Stanley Dean Witter Universal Funds, Inc. (Incorporated herein by reference to Post-Effective Amendment No. 1 to registrant's registration statement (File No. 333-93871 dated January 28, 2000) (c) AIM Variable Insurance Funds (Incorporated herein by reference to Post-Effective Amendment No. 1 to registrant's registration statement (File No. 333-93871 dated January 28, 2000) (d) Alliance Variable Products Series Fund(Incorporated herein by reference to Post-Effective Amendment No. 1 to registrant's registration statement (File No. 333-93871 dated January 28, 2000) (e) Putnam Variable Trust(Incorporated herein by reference to Post-Effective Amendment No. 1 to registrant's registration statement (File No. 333-93871 dated January 28, 2000) (f) Van Kampen Life Investment Trust (Incorporated herein by reference to Post-Effective Amendment No. 1 to registrant's registration statement (File No. 333-93871 dated January 28, 2000) (9) Opinion and Consent of Michael J. Velotta, Vice President, Secretary and General Counsel of Northbrook Life Insurance Company (10)(a) Independent Auditors' Consent (b) Consent of Attorneys (11) Not applicable (12) Not applicable (13) Performance Data Calculations (a) Morgan Stanley Dean Witter Variable Annuity II (previously filed in Post effective amendment No. 17 to this Registration Statement (File No. 033-3542) dated March 5, 1998) (b) Morgan Stanley Dean Witter Variable Annuity 3 (14) Not applicable (99) Powers of Attorney for Thomas J. Wilson, II, Michael J. Velotta, Sarah R. Donahue, John R. Hunter, Kevin R. Slawin, Casey J. Sylla, Timothy N. Vander Pas and Samuel H. Pilch. 25. DIRECTORS AND OFFICERS OF THE DEPOSITOR, NORTHBROOK LIFE INSURANCE COMPANY NAME AND PRINCIPAL POSITION AND OFFICE WITH BUSINESS ADDRESS DEPOSITOR OF THE ACCOUNT Thomas J. Wilson, II Director, President and Chief Operating Officer (Principal Executive Officer) Michael J. Velotta Director, Vice President, Secretary and General Counsel John R. Hunter Director and Vice President Kevin R. Slawin Director and Vice President (Principal Financial Officer) Timothy N. Vander Pas Director and Assistant Vice President Sarah R. Donahue Director and Assistant Vice President Casey J. Sylla Director and Chief Investment Officer Marla G. Friedman Vice President Karen C. Gardner Vice President Samuel H. Pilch Controller (Principal Accounting Officer) James P. Zils Treasurer Ronald A. Johnson Assistant Vice President Barry S. Paul Assistant Vice President and Assistant Treasurer C. Nelson Strom Assistant Vice President and Corporate Actuary Charles F. Thalheimer Assistant Vice President Patricia W. Wilson Assistant Vice President, Assistant Secretary and Assistant Treasurer Joanne M. Derrig Assistant Secretary, Assistant General Counsel and Chief Compliance Officer Emma M. Kalaidjian Assistant Secretary Paul N. Kierig Assistant Secretary Mary J. McGinn Assistant Secretary
The principal business address of the foregoing officers and directors is 3100 Sanders Road, Northbrook, Illinois 60062. 26. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH DEPOSITOR OR REGISTRANT Incorporated herein by reference to Annual Report on Form 10-K, filed by the Allstate Corporation on March 28, 2000 (File No. 1-11840). 27. NUMBER OF CONTRACT OWNERS As of the date of the filing of this Registration Statement, the offering of the Variable Annuity 3 contract had not commenced. 28. INDEMNIFICATION The General Agency Agreement (Exhibit 3(b)) contains a provision in which Northbrook Life agrees to indemnify Dean Witter Reynolds as Underwriter for certain damages and expenses that may be caused by actions, statements or omissions by Northbrook Life. The Agreement to Purchase Shares contains a similar provision in paragraph 16 of Exhibit 12. Insofar as indemnification for liability arising out of the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than payment by the registrant of expenses incurred by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of is counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. 29. PRINCIPAL UNDERWRITERS (a) Registrant's principal underwriter, Dean Witter Reynolds Inc., is the principal underwriter for the following affiliated investment companies: Northbrook Variable Annuity Account Northbrook Life Variable Life Separate Account A Allstate Life of New York Variable Annuity Account Allstate Life of New York Variable Annuity Account II (b) The directors and principal officers of the principal underwriter are: Name and Principal Business Positions and Offices Address* of Each Such Person with Underwriter 29. PRINCIPAL UNDERWRITERS (a) Registrant's principal underwriter, Dean Witter Reynolds Inc., is also the principal underwriter for the following investment companies: Northbrook Variable Annuity Account II Northbrook Life Variable Life Separate Acount A Allstate Life of New York Variable Annuity Account II Allstate Life of New York Variable Annuity Account (b) The directors and principal officers of the principal underwriter are:
Name and Principal Business Positions and Officers Address* of Each Such Person with Principal Underwriter Bruce F. Alonso Director Donald G. Kempf, Jr. Director John J. Mack Director Alan A. Schroder Director Robert G. Scott Director Philip J. Purcell Director, Chairman and Chief Executive Officer Richard M. DeMartini Director, President and Chief Operating Officer, Dean Witter Capital James F. Higgins Director, President and Chief Operating Officer, Dean Witter Financial Stephen R. Miller Director, Senior Executive Vice President Mitchell M. Merin Director, Executive Vice President and Chief Administrative Officer Michael H. Stone Executive Vice President, General Counsel and Secretary Raymond J. Drop Director, Executive Vice President Frederick J. Frohne Executive Vice President E. Davisson Hardman, Jr. Executive Vice President Jeremiah A. Mullins Executive Vice President John H. Schaefer Director, Executive Vice President Thomas C. Schneider Director, Executive Vice President Robert B. Sculthorpe Executive Vice President William B. Smith Executive Vice President Ronald T. Carman Senior Vice President, Associate General Counsel and Assistant Secretary Paul J. Dubow Senior Vice President and Deputy General Counsel Alexander C. Frank Senior Vice President and Treasurer Michael T. Gregg Senior Vice President, Deputy General Counsel and Assistant Secretary Kelly McNamara Corley Senior Vice President and Director of Governmental Affairs Charles F. Vadala, Jr. Senior Vice President and Chief Financial Officer Anthony Basile Senior Vice President Michael T. Cunningham Senior Vice President Mary E. Curran Senior Vice President Lorena J. Kern Senior Vice President George R. Ross Senior Vice President Debra M. Aaron Vice President Darlene R. Lockhart Vice President Harvey B. Mogenson Vice President Kevin Mooney Vice President Saul Rosen Vice President Frank G. Skubic Vice President Eileen S. Wallace Vice President Michael D. Browne Assistant Secretary Marilyn K. Cranney Assistant Secretary Sabrina Hurley Assistant Secretary Joyce L. Kramer Assistant Secretary
* The principal business address of the above-named individuals is Two World Trade Center, New York, New York 10048. (c) Compensation of Dean Witter Reynolds Inc. The following commissions and other compensation were received by each principal underwriter, directly or indirectly, from the Registrant during the Registrant's last fiscal year. Name of Principal Net Underwriting Compensation on Brokerage Compensation Underwriter Discounts and Redemption Commissions Commissions - ----------------- ---------------- -------------- ----------- ------------ Dean Witter N/A N/A N/A N/A Reynolds Inc.
30. LOCATION OF ACCOUNTS AND RECORDS The Depositor, Northbrook Life Insurance Company, is located at 3100 Sanders Road, Northbrook, Illinois 60062. The Distributor, Dean Witter Reynolds Inc., is located at Two World Trade Center, New York, New York 10048. Each company maintains those accounts and records required to be maintained pursuant to Section 31(a)of the Investment Company Act and the rules promulgated thereunder. 31. MANAGEMENT SERVICES None 32. UNDERTAKINGS The Registrant undertakes to file a post-effective amendment to the Registration Statement as frequently as is necessary to ensure that the audited financial statements in the Registration Statement are never more than 16 months old for so long as payments under the variable annuity contracts may be accepted. Registrant furthermore agrees to include either, as part of any prospectus or application to purchase a contract offered by the prospectus, a toll-free number that an applicant can call to request a Statement of Additional Information or a post card or similar written communication that the applicant can remove to send for a Statement of Additional Information. Finally, the Registrant agrees to deliver any Statement of Additional Information and any Financial Statements required to be made available under this Form N-4 promptly upon written or oral request. REPRESENTATIONS PURSUANT TO SECTION 403(B) OF THE INTERNAL REVENUE CODE The Company represents that it is relying upon a November 28, 1988 Securities and Exchange Commission no-action letter issued to the American Council of Life Insurance and that the provisions of paragraphs 1-4 of the no-action letter have been complied with. REPRESENTATION REGARDING CONTRACT EXPENSES Northbrook Life Insurance Company represents that the fees and charges deducted under the Contracts described in this Registration Statement, in the aggregate, are reasonable in relation to the services rendered, the expenses expected to be incurred, and the risks assumed by Northbrook Life Insurance Compay under the Contracts. Northbrook Life Insurance Company bases its representation on its assessment of all of the facts and circumstances, including such relevant factors as: the nature and extent of such services, expenses and risks; the need for Northbrook Life Insurance Company to earn a profit; the degree to which the Contracts include innovative features; and the regulatory standards for exemptive relief under the Investment Company Act of 1940 used prior to October 1996, including the range of industry practice. This representation applies to all Contracts sold pursuant to the Registraiton Statement, including those sold on the terms specifically described in the prospectus(es) contained herein, or any variations therein, based on supplements, endorsements, or riders to any Contracts or prospectus(es), or otherwise. SIGNATURES As required by the Securities Act of 1933 and the Investment Company Act of 1940, the Registrant, Northbrook Variable Annuity Account II, certifies that it meets the requirements of Securities Act Rule 485(b) for effectiveness of this amended Registration Statement and has caused this amended Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, all in the Township of Northfield, State of Illinois, on the 25th day of April, 2000. NORTHBROOK VARIABLE ANNUITY ACCOUNT II (REGISTRANT) BY: NORTHBROOK LIFE INSURANCE COMPANY (DEPOSITOR) By:/s/MICHAEL J. VELOTTA Michael J. Velotta Vice President, Secretary and General Counsel As required by the Securities Act of 1933, this amended Registration Statement has been duly signed below by the following Directors and Officers of Northbrook Life Insurance Company on the 25th day of April, 2000. */THOMAS J. WILSON, II President, Chief Operating Officer Thomas J. Wilson, II and Director, (Principal Executive Officer) /s/MICHAEL J. VELOTTA Vice President, Secretary, Michael J. Velotta General Counsel and Director */JOHN R. HUNTER Vice President and Director John R. Hunter */KEVIN R. SLAWIN Vice President and Director Kevin R. Slawin (Principal Financial Officer) */CASEY J. SYLLA Chief Investment Officer and Director Case J. Sylla */SARAH R. DONAHUE Assistant Vice President and Director Sarah R. Donahue */TIMOTHY N. VANDER PAS Assistant Vice President and Director Timothy N. Vander Pas */SAMUEL H. PILCH Controller (Principal Accounting Officer) Samuel H. Pilch */By Michael J. Velotta, pursuant to Powers of Attorney filed herewith
EXHIBIT INDEX Exhibit Description (4)(c) Form of Contract (5)(c) Form of Application (9) Opinion and consnet of General Counsel (10)(a) Independent Auditors' Consent (10)(b) Consent of Attorneys (13)(b) Performance Data Calculations (99) Powes of Attorney EX-4 2 FORM OF CONTRACT Exhibit 4(c) Page 2 NLU Northbrook Life Insurance Company A Stock Company Headquarters: 3100 Sanders Road Northbrook, IL 60062 Flexible Premium Deferred Variable Annuity Certificate This Certificate is issued pursuant to the terms of Master Policy Number 64890022 issued by Northbrook Life Insurance Company to Dean Witter Reynolds Inc., called the Master Policyholder. This Certificate is governed by Delaware law. Throughout this Certificate, "you" and "your" refer to the Certificate Owner(s). "We", "us" and "our" refer to Northbrook Life Insurance Company. Certificate Summary This flexible premium deferred variable annuity provides a cash withdrawal benefit and a death benefit during the accumulation phase and periodic income payments beginning on the payout start date during the Payout Phase. The dollar amount of income payments or other values provided by this Certificate, when based on the investment experience of the variable account, will vary to reflect the performance of the variable account. This Certificate does not pay dividends. The tax status of this Certificate as it applies to the Owner should be reviewed each year. PLEASE READ YOUR CERTIFICATE CAREFULLY. This is a legal contract between the Certificate Owner and Northbrook Life Insurance Company. Return Privilege If you are not satisfied with this Certificate for any reason, you may return it to us or our agent within 20 days after you receive it. We will refund any purchase payments allocated to the variable account, adjusted to reflect investment gain or loss from the date of allocation to the date of cancellation, plus any purchase payments allocated to the Fixed Account Options. If this Certificate is qualified under Section 408 of the Internal Revenue Code, we will refund the greater of any purchase payments or the Certificate Value. If you have any questions about your Northbrook Life variable annuity, please contact Northbrook Life at (800) 654-2397. [GRAPHIC OMITTED][GRAPHIC OMITTED] Michael J. Velotta Thomas J. Wilson Vice President, Secretary Chairman and Chief and General Counsel Executive Officer - ------------------------------------------------------------------------------- TABLE OF CONTENTS - ------------------------------------------ THE PERSONS INVOLVED....................3 ACCUMULATION PHASE......................4 PAYOUT PHASE............................9 INCOME PAYMENT TABLES..................11 GENERAL PROVISIONS.....................12 - --------------------------------------------- ANNUITY DATA - --------------------------------------------- CERTIFICATE NUMBER:.................44444444 ISSUE DATE:......................May 7, 1996 INITIAL PURCHASE PAYMENT:.........$10,000.00 Non-Qualified OWNER:..............................John Doe ANNUITANT:..........................John Doe AGE AT ISSUE:.....................35 SEX:............................Male PAYOUT START DATE:..............July 1, 2046 (May be changed by notifying us no later than 30 days prior to this date) INCOME PLAN:...........Life with 10 years - Unless Changed by Owner ADMINISTRATOR:...........Northbrook Life Insurance Company Annuity Services Division P.O. Box 94040 Palatine, IL 60094-4040 INITIAL ALLOCATION OF PURCHASE PAYMENTS: QUALITY INCOME PLUS:........................50% DIVIDEND GROWTH:............................50% - --------------------------------- ------------- ----------------------------- OWNER'S RELATIONSHIP BENEFICIARY TO OWNER PERCENTAGE - ----------- --------- ---------- - ----------------------------------------------------------------- - ----------------------------------------------------------------- Jeff Doe Son 100% - ----------------------------------------------------------------- DPNvaiii THE PERSONS INVOLVED Owner Unless changed, the person(s) named at the time of application is (are) the owner(s) of this Certificate. The owner has all rights, title and interest in this Certificate. As owner, you will receive any income payments made under an income plan. You may exercise all rights and options stated in this Certificate, subject to the rights of any irrevocable beneficiary. You may change the owner or beneficiary at any time. If you are a natural person, you may change the annuitant prior to the Payout Start Date. Once we have received a satisfactory written request for an owner, beneficiary or annuitant change, the change will take effect as of the date you signed it. We are not liable for any payment we make or other action we take before receiving any written request from you. We are not responsible for the tax consequences of an owner, beneficiary or annuitant change. You may not assign an interest in this Certificate as collateral or security for a loan. Otherwise, you may assign benefits under this Certificate prior to the payout start date. No beneficiary may assign benefits under the Certificate until they are due. No assignment will bind us unless it is signed by you and filed with us. We are not responsible for the validity of an assignment. If the owner is more than one person: o "owner" as used in this Certificate means any and all persons named as the owner, unless otherwise indicated; o any assignment or request for a change must be signed by all the persons named as the owner; and o on the death of any one person named as owner, ownership rights, title and interest shall be retained by the surviving person(s) named as the owners. See the section titled Accumulation Phase for the details concerning the death of an owner. Annuitant The annuitant is the person whose life may affect the timing or amount of the payout under this Certificate. The owner is the annuitant unless a different annuitant has been designated. Beneficiary The death benefit is payable to the beneficiary if the sole surviving owner dies during the accumulation phase, subject to any prior claims. Details, including the special treatment of a beneficiary who is the owner's spouse, are stated in the section titled Accumulation Phase. If the owner dies during the payout phase the surviving owner(s) will become the payee of any income payments scheduled to continue after the owner's death. If there are no surviving owners the beneficiary will become the payee of any such payments. The beneficiary is as named in the most recent written request we have received from you. If you do not name a beneficiary or if the beneficiary named by you is no longer living when the death benefit becomes payable, the beneficiary will be: o your spouse if living; otherwise o your children equally if living; otherwise o your estate. ACCUMULATION PHASE Accumulation Phase Defined The accumulation phase is the first of two phases in the life of your Certificate. During this period your cash value results from purchase payments made, investment experience of the variable account, interest credited to the fixed accounts, and charges deducted. Any withdrawals you make and associated charges, if any, will reduce your cash value. The accumulation phase begins on the issue date stated on the Annuity Data page. This phase will continue until the payout start date unless the Certificate is terminated before that date. Time during the accumulation phase is measured in certificate years. Certificate years are those years that begin with the issue date or an anniversary of the issue date. NLUxxx Page 3 Your certificate will stay in force until the payout start date, unless your cash value is reduced to zero. Purchase Payments Purchase payments may be made at any time during the accumulation phase. While this certificate allows purchase payments after the initial purchase payment, they are not required. We may limit the amount of purchase payments we will accept. We will invest the purchase payments in the investment alternatives you select. You may allocate any portion of your purchase payment in whole percents from 0% to 100% to any of the investment alternatives. The total allocation must equal 100%. For each purchase payment, the minimum amount that may be allocated to the fixed account is $500. Allocation of your purchase payments will be made as you requested at the time of application. You may change the allocation of subsequent purchase payments at any time, without charge, simply by giving us written notice. Any change will be effective at the time we receive this notification. Investment Alternatives Investment alternatives are the sub-accounts of the variable account and the fixed accounts. Variable Account The variable account for this Certificate is the Northbrook Variable Annuity Account II. This variable account is our separate investment account to which we allocate certain assets contributed under this and other certificates. These assets remain our property but will not be charged with liabilities arising from any other business we may have. Sub-accounts The variable account is divided into sub-accounts. Each sub-account invests solely in the shares of the mutual fund(s) underlying that sub-account. Fixed Account Options The Fixed Account Options are the Standard Fixed Account and the Dollar Cost Averaging Fixed Account. Standard Fixed Account Money in the Standard Fixed Account will earn interest at the current rate in effect at the time of allocation or transfer to the Standard Fixed Account for the guarantee period. We will offer a six year guarantee period. Other guarantee periods will be offered at our discretion. After the guarantee period, a renewal rate will be declared. Subsequent renewal dates will be on anniversaries of the first renewal date. The current rate and the renewal rate(s) will never be less than 3%. Interest is credited to the Standard Fixed Account daily during the accumulation phase. The rates we quote when referring to interest credits are effective annual interest rates. ?Effective annual rate? means the yield earned when interest credits at the underlying daily rate have compounded for a full year. Dollar Cost Averaging Fixed Account Money in the Dollar Cost Averaging Fixed Account will earn interest at the current rate in effect at the time of allocation to the Dollar Cost Averaging Fixed Account for a period of one year. After the first year, a renewal rate will be declared. The current rate and the renewal rate(s) will never be less than 3%. Subsequent renewal dates will be on anniversaries of the first renewal date. Interest is credited to the Dollar Cost Averaging Fixed Account daily during the accumulation phase. The rates we quote when referring to interest credits are effective annual interest rates as defined in the Fixed Account provision of your certificate. Transfers are not allowed into the Dollar Cost Averaging Fixed Account. The Dollar Cost Averaging Fixed Account will be offered at our discretion. Six-Month Dollar Cost Averaging Fixed Account Money in the Six-Month Dollar Cost Averaging Fixed Account will earn interest at the annual rate in effect at the time of allocation to the Six-Month Dollar Cost Averaging Fixed Account. Crediting rates for the Six-Month Dollar Cost Averaging Fixed Account will never be less than 3% annually. Each purchase payment and associated interest in the Six-Month Dollar Cost Averaging Fixed Account must be transferred to sub-accounts of the variable account in equal monthly installments within the six-month transfer period. If we do not receive an allocation from you within one month of the date of payment, the payment plus associated interest will be transferred to the money market sub-account in equal monthly installments using the longest transfer period being offered at the time the purchase payment is made. If the Six-Month Dollar Cost Averaging Fixed Account is discontinued prior to the last scheduled transfer, the remaining balance in the Six-Month Dollar Cost Averaging Fixed Account will immediately be transferred to the money market sub-account unless a different variable sub-account is requested. No transfers are permitted into the Six-Month Dollar Cost Averaging Fixed Account. The Six-Month Dollar Cost Averaging Fixed Account will be offered at our discretion. NLUxxx Page 4 Twelve-Month Dollar Cost Averaging Fixed Account Money in the Twelve-Month Dollar Cost Averaging Fixed Account will earn interest at the annual rate in effect at the time of allocation to the Twelve-Month Dollar Cost Averaging Fixed Account. Crediting rates for the Twelve-Month Dollar Cost Averaging Fixed Account will never be less than 3% annually. Each purchase payment and associated interest in the Twelve-Month Dollar Cost Averaging Fixed Account must be transferred to sub-accounts of the variable account in equal monthly installments within the twelve-month transfer period. If we do not receive an allocation from you within one month of the date of payment, the payment plus associated interest will be transferred to the money market sub-account in equal monthly installments using the longest transfer period being offered at the time the purchase payment is made. If the Twelve-Month Dollar Cost Averaging Fixed Account is discontinued prior to the last scheduled transfer, the remaining balance in the Twelve-Month Dollar Cost Averaging Fixed Account will immediately be transferred to the money market sub-account unless a different variable sub-account is requested. No transfers are permitted into the Twelve-Month Dollar Cost Averaging Fixed Account. The Twelve-Month Dollar Cost Averaging Fixed Account will be offered at our discretion. Cash Value Your cash value is equal to the sum of: o the number of accumulation units you hold in each sub-account of the variable account multiplied by the accumulation unit value for that sub-account on the most recent valuation date; plus o the total value you have in the Fixed Account Options. Accumulation Units Amounts which you allocate to a sub-account of the variable account are used to purchase accumulation units in that sub-account. The accumulation unit value for each sub-account at the end of any valuation period is calculated by multiplying the prior value by the sub-account's net investment factor for the valuation period. The accumulation unit values may go up or down. Additions or transfers to sub-accounts of the variable account will increase the number of accumulation units for that sub-account. Withdrawals or transfers from sub-accounts of the variable account will result in cancellation of accumulation units from that sub-account. Valuation Period A valuation period is the time interval between the closing of the New York Stock Exchange on consecutive valuation dates. A valuation date is any date the New York Stock Exchange is open for trading except for days in which there is insufficient trading in the variable account's portfolio securities such that the value of accumulation or annuity units might not be materially affected by changes in the value of the portfolio securities. Net Investment Factor For each sub-account of the variable account, the net investment factor for a valuation period is (A) divided by (B), minus (C) where: (A) is the sum of: (1) the net asset value per share of the mutual fund(s) underlying the sub-account determined at the end of the current valuation period, plus (2) the per share amount of any dividend or capital gain distributions made by the mutual fund(s) underlying the sub-account during the current valuation period. (B) is the net asset value per share of the mutual fund(s) underlying the sub-account determined as of the end of the immediately preceding valuation period. (C) is the sum of the annualized administrative expense and the annualized mortality and expense risk charges divided by 365 and then multiplied by the number of calendar days in the current valuation period. Transfers Prior to the payout start date, you may transfer amounts between investment alternatives. You may make 12 transfers per certificate year without charge. Each transfer after the 12th transfer in any certificate year, except those from a dollar cost averaging fixed account, will be assessed a $25 transfer fee. Transfers are subject to the following restrictions: o The minimum amount that may be transferred from an investment alternative is $100; if the total amount in an investment alternative is less than $100, the entire amount may be transferred. NLUxxx Page 5 o The minimum transfer to any one guarantee period of the Standard Fixed Account is $500. No transfers are allowed into any dollar cost averaging fixed account. o The following limits do not apply to transfers from any dollar cost averaging fixed account. The maximum amount which may be transferred from the Standard Fixed Account to the variable account or between guarantee periods of the Standard Fixed Account in any certificate year is limited to the greater of: - 25% of the value in the fixed account on the most recent certificate anniversary. If 25% of the most recent value is greater than zero but less than $1,000, then up to $1,000 may be transferred; or - 25% of the sum of purchase payments allocated to the Standard Fixed Account and transfers to the Standard Fixed Account, all as of the most recent certificate anniversary. o If the first renewal interest rate is less than the current rate that was in effect at the time money was allocated or transferred to the Standard Fixed Account, the 25% transfer restriction for that money and the accumulated interest thereon will be waived during the 60 day period following the first renewal date. We reserve the right to limit transfer amounts among sub-accounts if we determine, in our sole discretion, that the exercise of that right by one or more certificate owners is, or would be, to the disadvantage of other certificate owners. Transfer limitations could be applied to transfers to or from some or all of the sub-accounts and could include but not be limited to: o The requirement of a minimum time period between each transfer; o Not accepting transfer requests of an agent acting under a power-of-attorney on behalf of more than one certificate owner; or, o Limiting the dollar amount that may be transferred between the sub-accounts and the fixed accounts by a certificate owner at any one time Such restrictions may be applied in any manner reasonably designed to prevent any use of the transfer right which is considered by us to be to the disadvantage of other certificate owners. We reserve the right to waive the transfer fees and/or restrictions contained in this Certificate. Charges The charges for this Certificate include taxes as defined below, certificate maintenance charges, administrative expense charges, and mortality and expense risk charges. If withdrawals are made, the Certificate may be subject to early withdrawal charges. Taxes Any premium taxes or other taxes imposed on amounts relating to this Certificate may be deducted from purchase payments or cash values when the tax is incurred or at a later time. Certificate Maintenance Charge The certificate maintenance charge will be deducted each year from your cash value to reimburse us for the expenses of maintaining this Certificate. This charge will never be greater than $35 per certificate year. The certificate maintenance charge of $35 will be waived for the remainder of the life of the certificate when the Cash Value is $40,000 or more on or after the issue date. Prior to the payout start date, the certificate maintenance charge will be deducted from your cash value on each certificate anniversary. The charge will be deducted on a pro-rata basis from each sub-account in the proportion that your investment in each bears to your cash value. The certificate maintenance charge will also be deducted in full if the Certificate is surrendered on any date other than a certificate anniversary. Administrative Expense Charge Both before and after the payout start date, we will deduct an administrative expense charge from the assets in the variable account on a daily basis. The administrative expense charge is to reimburse us for administrative expenses incurred in maintaining this Certificate that are not covered by the certificate maintenance charge. The annualized administrative expense charge will never be greater than 0.10%. (See the calculation under Net Investment Factor). This charge will also be reflected in the net interest rate credited to assets in the Fixed Account Options. Mortality and Expense Risk Charge Both before and after the payout start date, we will deduct a mortality and expense risk charge from the assets in the variable account on a daily basis. The annualized mortality and expense risk charge will never be greater than 1.25%. (See the calculation under Net Investment Factor). This charge will also be reflected in the net interest rate credited to assets in the Fixed Account Options. NLUxxx Page 6 Our expense and mortality experience will not adversely affect the dollar amount of variable benefits or other contractual payments or values under this Certificate. Withdrawal and Surrender You have the right to make a partial withdrawal or full surrender at any time during the accumulation phase. You must specify the investment alternative(s) from which you wish to make a withdrawal. The amount of any withdrawal you request, plus an early withdrawal charge and premium taxes when applicable, will reduce your cash value. Any withdrawal must be at least $500. If a withdrawal would leave a cash value of less than $500, we will treat the request as a full surrender. If you surrender your Certificate, we will pay you its cash value, less any applicable early withdrawal charges and premium taxes, and the Certificate will terminate. Early Withdrawal Charge An early withdrawal charge may be applied to a full surrender or partial withdrawal of cash value in excess of the free withdrawal amount. For the purpose of assessing an early withdrawal charge, withdrawals are assumed to come from purchase payments first, beginning with the oldest payment. Early withdrawal charges will be based on the age(s) of the purchase payment(s) associated with the withdrawal according to the following schedule: Maximum Complete Certificate Withdrawal Years since Purchase Charge Payment was made Percent 0 6% 1 5% 2 5% 3 4% 4 3% 5 2% 6 or more 0% Once all purchase payments have been withdrawn, additional withdrawals will not be assessed an early withdrawal charge. The maximum aggregate early withdrawal charge is 6% of your purchase payments. Free Withdrawal Amount A free withdrawal amount will be available in each certificate year. This free withdrawal amount may be withdrawn over the course of the certificate year without incurring early withdrawal charges. The free withdrawal amount is 15% of the amount of purchase payments as of the issue date or the most recent certificate anniversary, whichever is later. As with all withdrawals, the free withdrawal amount will be assumed to come from the oldest remaining purchase payments first. Free withdrawal amounts not withdrawn in a certificate year are not carried over to increase the free withdrawal amount in a subsequent certificate year. Withdrawal charges will be waived on partial withdrawals taken to satisfy qualified plan required minimum distribution rules as described in the Internal Revenue Code. This waiver is permitted only for withdrawals which satisfy distributions resulting from this Certificate. Death of Owner or Annuitant If you die prior to the payout start date, the new owner will be the surviving owner(s). If there is (are) no surviving owner(s), the new owner will be the beneficiary(ies). The new owner will have the options described in the Options of New Owner subsection below. If you are owner and annuitant and you die, then the new annuitant will be the oldest new owner. However, if the new owner is a corporation, trust, or other non-natural person, the Certificate will terminate, the death benefit as described below will be paid to the new owner, and the new owner will not have the options described below. If any annuitant dies who is not also an owner, the owner must elect an applicable option listed below. If the option selected is 1(a) or 1(b)(ii) below, the new annuitant will be the youngest owner, unless the owner names a different annuitant. 1. If the owner is a natural person: NLUxxx Page 7 a. The owner may choose to continue this Certificate as if the death had not occurred; or 2. If we receive due proof of death within 180 days of the date of the annuitant?s death, then the owner may alternatively choose to: i. Receive the Death Benefit in a lump sum; or ii. Apply the Death Benefit to an Income Plan which may begin within one year of the date of death and must be for a period equal to or less than the life expectancy of the owner. 2. If the owner is a non-natural person: The owner must receive the Death Benefit in a lump sum. Options of New Owner If the sole new owner is your spouse: o Your spouse may elect, within 60 days of the date of your death, to receive the death benefit described below. o If your spouse does not make this election, then the accumulation phase continues as if the death had not occurred. On the date the Certificate is continued, the Cash Value will equal the amount of the Death Benefit as determined as of the Valuation Date on which we received Due Proof of Death (the next Valuation Date, if we received Due Proof of Death after 3 p.m. Central Time). If your Certificate is continued in the Accumulation Phase, the surviving spouse may make a single withdrawal of any amount within one year of the date of death without incurring a Withdrawal Charge. All ownership rights under the Certificate are then available to your spouse as the new owner. If the new owner is not your spouse, then this new owner has the following options: o The new owner may elect, within 60 days of the date of your death, to receive the death benefit described below. o The new owner may elect, within 60 days of the date of your death, to receive the settlement value payable in a lump sum within 5 years of your date of death. o The new owner may elect, within one year of the date of your death, to receive the settlement value paid out under one of the income plans described in the Payout Phase section. The payout start date must be within one year of your date of death. Income payments must be over the life of the new owner or over a period not to exceed the life expectancy of the new owner. o If the new owner does not make one of the above described elections, the settlement value will be paid to the new owner on the mandatory distribution date 5 years after your date of death. Under any of these options, all ownership rights are available to the new owner from the date of your death to the date on which the death benefit or settlement value is paid. Death Benefit The death benefit is the greater of: o the sum of all purchase payments, less any withdrawals, applicable early withdrawal charges and premium tax; or o the cash value on the date we receive due proof of death; or o the cash value on the most recent death benefit anniversary, less any withdrawals, applicable early withdrawal charges and premium tax deducted from the cash value since that anniversary. The death benefit anniversaries are those certificate anniversaries that are multiples of 6 certificate years, beginning with the 6th certificate anniversary. For example, the 6th, 12th and 18th certificate anniversaries are the first three death benefit anniversaries. We will calculate the value of the death benefit at the end of the valuation period coinciding with our receipt of a complete request for payment of the death benefit. A complete request includes due proof of death. Settlement Value The settlement value is the cash value less any applicable early withdrawal charges and premium tax. We will calculate the settlement value at the end of the valuation period coinciding with the receipt of a request for payment or on the mandatory distribution date of 5 years after the date of death. NLUxxx Page 8 PAYOUT PHASE Payout Phase Defined The payout phase is the second of the two phases in the life of your Certificate. During this period the cash value is applied to the income plan you choose and is paid out as provided under that plan. The payout phase begins on the payout start date. It continues until we make the last payment as provided by the income plan chosen. Payout Start Date The anticipated payout start date is shown on the Annuity Data page. You may change the payout start date by writing to us at least 30 days prior to the payout start date. The latest payout start date is the later of: o the annuitant's 90th birthday; or o the 10th anniversary of this Certificate's issue date. Unless changed as described above, we will use the payout start date shown on the Annuity Data page. Generally, you may not make withdrawals after the Payout Start Date. One exception to this rule applies if you are receiving income payments that do not depend on the life of the annuitant. In that case, you may terminate the receipt of income payments at any time and receive a lump sum equal to the present value of the remaining payments due. A withdrawal charge may apply. We also assess applicable premium taxes against all income payments. Income Plans An income plan is an arrangement for disbursing the cash value in installments. The cash value on the payout start date, less any applicable premium tax, will be applied to your choice of income plan from the following list: 1. Life Income with 120 Months Guaranteed We will make monthly payments for as long as the annuitant lives. If the annuitant dies before 120 monthly payments have been made, we will pay the remainder of the 120 guaranteed monthly payments to the owner. 2. Joint and Survivor Life Income We will make monthly payments for as long as either the annuitant or any joint annuitant named by you lives. No income payments will be made after the deaths of both the annuitant and the joint annuitant. 3. Payments for a Specified Period We will make monthly payments beginning on the payout start date for a specified period. These payments do not depend on the annuitant's life. Income payments for less than 120 months may be subject to early withdrawal charges. We reserve the right to accept other income plans. Income Payments Income payments may be based on the variable account, the Fixed Account Options or both. Your initial income payment will be based on the division of your cash value between the investment alternatives on the payout start date. Each income payment represents a sum of payments derived from each investment alternative in which you have an interest. A portion of the certificate maintenance charge will be deducted from each sub-account. Variable Amount Income Payments Income payments attributable to sub-accounts of the variable account will vary in accordance with the investment results of the mutual funds underlying the sub-accounts. The amount of the first income payment from a sub-account of the variable account is calculated by applying the portion of cash value allocated to the sub-account, less any applicable premium tax, to the Income Payment Tables. Subsequent income payments are based on the number of annuity units derived from dividing the first income payment by the sub-account's annuity unit value on the payout start date. The number of annuity units will remain the same unless a transfer is made between sub-accounts or the fixed accounts. Variable Amount Income Payments after the first will be equal to the number of annuity units for each sub-account multiplied by the corresponding annuity unit value on the date of payment. Annuity Unit Value The annuity unit value for each sub-account of the variable account at the end of any valuation period is calculated by: NLUxxx Page 9 o multiplying the prior value by the sub-account's net investment factor during the period; and then o dividing the product by 1.000 plus the assumed investment rate for the period. The assumed investment rate is an effective annual rate of 3%. Fixed Amount Income Payments Income payment amounts derived from the Fixed Account Options are guaranteed for the duration of the income plan. Cash value from the Fixed Account Options, less any applicable premium tax, will be used to purchase a Single Premium Immediate Annuity from us. Income payments from the Fixed Account Options will at least be equal to an amount determined from the Income Payment Tables. Annuity Transfers After the payout start date, no transfers may be made from the Fixed Amount Income Payment. Transfers between sub-accounts of the Variable Amount Income Payment, or from the Variable Amount Income Payment to the Fixed Amount Income Payment may not be made for six months subsequent to the payout start date. Transfers may be made once every six months thereafter. Transfers out of a sub-account of the Variable Amount Income Payment after the payout start date will cancel annuity units from that sub-account. Payout Terms and Conditions The income payments are subject to the following terms and conditions: o Income payments will start on the first day of the calendar month that coincides with or next follows the payout start date. o If we do not receive a written choice of income plan from you at least 30 days before the payout start date, we will use the income plan listed on the Annuity Data page. o If you choose an income plan which depends on any person's life, we may require proof of age and sex before income payments begin. o We may require proof that the annuitant or joint annuitant is still alive before we make any payment that depends on their continued life. o After the cash value has been applied to an income plan on the payout start date, the income plan cannot be changed and no withdrawals can be made. o Should the cash value be less than $2,000, or not be enough to provide an initial payment of at least $20, we reserve the right to: o change the payment frequency to make the payment at least $20, or o terminate the Certificate and pay you the cash value in a lump sum. GENERAL PROVISIONS The Entire Certificate The entire Certificate consists of the Master Policy, the Master Policy application, written enrollments, and any attached endorsements. All statements made in written enrollments are representations and not warranties. No statement will be used by us in defense of a claim or to void a Certificate unless it is included in a written enrollment. Only our officers may change the Master Policy or Certificate or waive a right or requirement. No other individual may do this. The Master Policy may be amended by us, terminated by us, or terminated by the Master Policyholder without the consent of any other person. No termination completed after the issue date of this Certificate will adversely affect your rights under this Certificate. We may not modify this Certificate without your consent, except to make it comply with any changes in the Internal Revenue Code or as required by any other applicable law. Incontestable We will not contest the validity of this Certificate after the issue date. NLUxxx Page 10 Misstatement of Age or Sex If any age or sex has been misstated, we will pay the amounts which would have been provided at the correct age or sex. If we find the misstatement of age or sex after the income payments begin, we will: o pay promptly the sum of all amounts that we underpaid plus due interest; or o stop payments until the total of the omitted payments at the corrected amount plus due interest is equal to the total of the overpayments plus due interest. For purposes of the Misstatement of Age or Sex provision, due interest will be calculated at an effective annual rate of 6%. Annual Statement At least once a year, prior to the payout start date, we will send you a statement containing information required by any applicable law. Settlements We may require that this Certificate be returned to us prior to any settlement. We must receive due proof of death of the owner or annuitant prior to settlement of a death claim. Due proof of death is one of the following: o a copy of a certified death certificate; or o a copy of a certified decree of a court of competent jurisdiction as to a finding of death; or o any other proof acceptable to us. Any cash surrender or death benefit under this Certificate will not be less than the minimum benefits required by any statute of the state in which the Master Policy is issued. Deferment of Payments We will pay any amounts due from the variable account under this Certificate within seven days, unless: o the New York Stock Exchange is closed for other than usual weekends or holidays, or trading on such Exchange is restricted; o an emergency exists as defined by the Securities and Exchange Commission; or o the Securities and Exchange Commission permits delay for the protection of Certificate holders. We reserve the right to postpone payments or transfers from the Fixed Account Options for up to six months. Variable Account Modifications We reserve the right, subject to applicable law, to make additions to, deletions from, or substitutions for the mutual fund shares underlying the sub-accounts of the variable account. We will not substitute any shares attributable to your interest in a sub-account of the variable account without notice to you and prior approval of the Securities and Exchange Commission, to the extent required by the Investment Company Act of 1940. We reserve the right to establish additional sub- accounts of the variable account, each of which would invest in shares of another mutual fund. You may then instruct us to allocate purchase payments to such sub-accounts, subject to any terms set by us or the mutual fund. In the event of any such substitution or change, we may by endorsement, make such changes as may be necessary or appropriate to reflect such substitution or change. If we deem it to be in the best interests of persons having voting rights under the certificates, the variable account may be operated as a management company under the Investment Company Act of 1940 or it may be deregistered under such Act in the event such registration is no longer required. NLUxxx Page 11 INCOME PAYMENT TABLES The Income Payment Tables show the initial monthly income payment per $1,000 of cash value applied for each of the income plans listed in the Payout section. The Income Payment Tables are based on 3% interest and the 1983 Table a Annuity Mortality Tables with the following age adjustment. The age(s) of the annuitant and any joint annuitant at his or her last birthday on or prior to the payout start date will be set back one year for each six full years between January 1, 1983 and the payout start date. Income payments for ages not shown in this section will be determined on a basis consistent with that used to determine those that are shown.
Income Plan 1 - Life with 120 Months Guaranteed - ----------------------------------------------------------------------------------------------------------------------- First Income Payment for Each $1,000 of Cash Value - ----------------------------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------------------------- Annuitant's Age Annuitant's Annuitant's Male Female Age Male Female Age Male Female - ----------------------------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------------------------- 35 $ 3.43 $ 3.25 49 $ 4.15 $ 3.82 63 $5.52 $4.97 36 3.47 3.28 50 4.22 3.88 64 5.66 5.09 37 3.51 3.31 51 4.29 3.94 65 5.80 5.22 38 3.55 3.34 52 4.37 4.01 66 5.95 5.35 39 3.60 3.38 53 4.45 4.07 67 6.11 5.49 40 3.64 3.41 54 4.53 4.14 68 6.27 5.64 41 3.69 3.45 55 4.62 4.22 69 6.44 5.80 42 3.74 3.49 56 4.71 4.29 70 6.61 5.96 43 3.79 3.53 57 4.81 4.38 71 6.78 6.13 44 3.84 3.58 58 4.92 4.46 72 6.96 6.31 45 3.90 3.62 59 5.02 4.55 73 7.13 6.50 46 3.96 3.67 60 5.14 4.65 74 7.31 6.69 47 4.02 3.72 61 5.26 4.75 75 7.49 6.88 48 4.08 3.77 62 5.39 4.86 - -----------------------------------------------------------------------------------------------------------------------
Income Plan 2 - Joint and Survivor - ----------------------------------------------------------------------------------------------------------------------- Male First Income Payment for Each $1,000 of Cash Value Annuitant's Age ------------------------------------------------------------------------------------------------------- ------------------------------------------------------------------------------------------------------- Female Annuitant's Age 35 40 45 50 55 60 65 70 75 - ----------------------------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------------------------- 35 $3.09 3.16 3.23 3.28 3.32 3.36 3.39 3.41 3.42 40 3.13 3.22 3.31 3.39 3.46 3.52 3.56 3.59 3.62 45 3.17 3.28 3.39 3.50 3.60 3.69 3.76 3.82 3.86 50 3.19 3.32 3.45 3.60 3.74 3.87 3.99 4.08 4.14 55 3.21 3.35 3.51 3.68 3.87 4.06 4.23 4.38 4.49 60 3.23 3.37 3.55 3.75 3.98 4.23 4.48 4.71 4.91 65 3.24 3.39 3.58 3.80 4.07 4.38 4.72 5.06 5.38 70 3.24 3.40 3.60 3.84 4.13 4.50 4.92 5.40 5.89 75 3.25 3.41 3.61 3.86 4.18 4.58 5.08 5.68 6.37 - -----------------------------------------------------------------------------------------------------------------------
Income Plan 3 - Payments for a specified Period - ----------------------------------------------------------------------------- First Income Payment for Each Specified Period $1,000 of Cash Value - ----------------------------------------------------------------------------- - ----------------------------------------------------------------------------- 10 Years $9.61 11 Years 8.86 12 Years 8.24 13 Years 7.71 14 Years 7.26 15 Years 6.87 16 Years 6.53 17 Years 6.23 18 Years 5.96 19 Years 5.73 20 Years 5.51 - ----------------------------------------------------------------------------- NLUxxx Page 12 Page 3 NLU919 (2/00) NORTHBROOK LIFE INSURANCE COMPANY (herein called "we" or "us") Income Benefit Combination Rider 2 This rider was issued because you selected the Income Benefit Combination Rider 2. As used in this rider, "Contract" means the Contract or Certificate to which this rider is attached. For purposes of this rider, "Rider Date" is the date this rider was issued as a part of your Contract: xx/xx/xxxx The following changes are made to your Contract. Qualifications On the Payout Start Date, the Owner may choose to receive income payments defined in the Income Benefit Combination provision if all of the following conditions are met. o The Owner elects a Payout Start Date that is on or after the tenth anniversary of the Rider Date; o The Payout Start Date occurs during the 30 day period following a Contract anniversary; o The Income Base is applied to Fixed Amount Income Payments or Variable Amount Income Payments as we may permit from time to time for all owners who choose to receive Income Payments under this rider; and o The selected Income Plan provides payments guaranteed for either single or joint life with a period certain of at least: o 10 years, if the youngest Annuitant's age is 80 or less on the date the amount is applied, or o 5 years, if the youngest Annuitant's age is greater than 80 on the date the amount is applied. Throughout the PAYOUT PHASE section of your Contract, the term "Cash Value" is replaced with "the greater of the Cash Value or the Income Benefit Combination". If the amount applied to an Income Plan is the Cash Value, then the Income Plan may be any plan then offered by us. Income Base The Income Base is the greater of Income Base A or Income Base B. Income Base is used solely for the purpose of calculating the Guaranteed Income Benefit and does not provide a Cash Value or guarantee performance of any investment option. Income Base A. o On the Rider Date, Income Base A is equal to the Cash Value. o After the Rider Date, Income Base A is recalculated as follows on the Contract anniversary and when a purchase payment or withdrawal is made. o For purchase payments, Income Base A is equal to the most recently calculated Income Base A plus the purchase payment. o For withdrawals, Income Base A is equal to the most recently calculated Income Base A reduced by a withdrawal adjustment. o On each Contract anniversary, Income Base A is equal to the greater of the Cash Value or the most recently calculated Income Base A. In the absence of any withdrawals or purchase payments, Income Base A will be the greatest of the Cash Value on the Rider Date and all Contract anniversary Cash Values between the Rider Date and the Payout Start Date. Income Base A will be recalculated for purchase payments, for withdrawals and on Contract anniversaries until the first Contract anniversary after the 85th birthday of the oldest Owner or, if no Owner is a living individual, the oldest Annuitant. After that date, Income Base A will be recalculated only for purchase payments and withdrawals. Income Base B. On the Rider Date, Income Base B is equal to the Cash Value. After the Rider Date, Income Base B plus any subsequent purchase payments and less a withdrawal adjustment for any subsequent withdrawals will accumulate daily at a rate equivalent to 5% per year until the first Contract anniversary after the 85th birthday of the oldest Owner, or, if the Owner is not a living individual, the oldest Annuitant. Withdrawal Adjustment The adjustment is equal to (1) divided by (2), with the result multiplied by (3), where: (1) = the withdrawal amount. (2) = the Cash Value (3) = the most recently calculated Income Base. Guaranteed Income Benefit The Guaranteed Income Benefit amount is determined by applying the Income Base less any applicable taxes to the guaranteed rates for the Income Plan elected by the Owner. The Income Plan selected must satisfy the conditions defined in Qualifications above. The rates are the guaranteed rates defined in the Income Payment Tables section of the Contract for either a single or joint life with a period certain. On the Payout Start Date, the income payment will be the greater of the Guaranteed Income Benefit and the income payment provided in the Payout Phase section of the Contract. Page 3 NLU919 (2/00) Mortality and Expense Risk Charge The Mortality and Expense Risk Charge provision of your Contract is modified as follows: On and after the Rider Date, the maximum annualized Mortality and Expense Risk Charge is increased by 0.30% for this rider. Except as amended, the Contract remains unchanged. Michael J. Velotta Thomas J. Wilson [GRAPHIC OMITTED][GRAPHIC OMITTED] Secretary Chairman and Chief Executive Officer Page 3 NLU922 (2/00) NORTHBROOK LIFE INSURANCE COMPANY (herein called "we" or "us") Income and Death Benefit Combination Rider 2 This rider was issued because you selected the Death Benefit Combination and the Income Benefit Combination. As used in this rider, "Contract" means the Contract or Certificate to which this rider is attached. For purposes of this rider, "Rider Date" is the date this rider was issued as a part of your Contract: xx/xx/xxxx The following changes are made to your Contract. Death Benefit Combination The Death Benefit provision of your Contract is modified as follows: If the Owner is a natural person, the Death Benefit Combination applies only to the death of the Owner. If the Owner is not a natural person, the Death Benefit Combination applies only to the death of the Annuitant. This is unlike the death benefit defined in the Death Benefit provision of your Contract which may apply to the death of the Annuitant even if the Owner is a natural person. The Death Benefit will be the greatest of the values stated in your Contract, or the value of the Death Benefit Combination. The Death Benefit Combination is equal to the greater of two separately calculated death benefits, Death Benefit A and Death Benefit B, as defined below. After the Rider Date, the Death Benefit Combination is recalculated when a purchase payment or withdrawal is made or on a Contract anniversary as follows: Death Benefit A o On the Rider Date, Death Benefit A is equal to the Cash Value. o After the Rider Date, Death Benefit A is recalculated when a purchase payment or a withdrawal is made or on a Contract anniversary as follows: o For purchase payments for all ages, Death Benefit A is equal to the most recently calculated Death Benefit A plus the purchase payment. o For withdrawals for all ages, Death Benefit A is equal to the most recently calculated Death Benefit A reduced by a withdrawal adjustment defined below. o Death Benefit A will be recalculated for purchase payments, for withdrawals and on Contract anniversaries until the first Contract anniversary after the 85th birthday of the oldest Owner or, if the Owner is not a living individual, the oldest Annuitant. In the absence of any withdrawals or purchase payments, Death Benefit A will be the greater of the Cash Value on the Rider Date and all Contract anniversary Cash Values between the Rider Date and the date we calculate the Death Benefit. Death Benefit B On the Rider Date, Death Benefit B is equal to the Cash Value. After the Rider Date, Death Benefit B plus any subsequent purchase payments and less a withdrawal adjustment for any subsequent withdrawals will accumulate daily at a rate equivalent to 5% per year until the first Contract anniversary after the 85th birthday of the oldest Owner or, if the Owner is not a living individual, the oldest Annuitant. Withdrawal Adjustment The withdrawal adjustment is equal to (1) divided by (2) with the result multiplied by (3) where: (1) = the withdrawal amount. (2) = the Cash Value immediately prior to the withdrawal. (3) = the most recently calculated Death Benefit A or B, as applicable Income Benefit Combination The following is added to your Contract: Qualifications On the Payout Start Date, the Owner may choose to receive income payments defined in the Income Benefit Combination provision if all of the following conditions are met. o The Owner elects a Payout Start date that is on or after the Rider Date; o The Payout Start Date occurs during the 30 day period following the Contract anniversary; o The Income Base is applied to Fixed Account Income Payments or Variable Amount Income Payments as we may permit from time to time for all owners who choose to receive Income Payments under this rider; and o The selected Income Plan provides payments guaranteed for either single or joint life with a period certain of at least: o 10 years, if the youngest Annuitant's age is 80 or less on the date the amount is applied, or o 5 years, if the youngest Annuitant's age is greater than 80 on the date the amount is applied. Throughout the PAYOUT PHASE section of your Contract, the term "Cash Value" is replaced with "The greater of the Cash Value or the Income Benefit Combination." If the amount applied to an Income Plan is the Cash Value, then the Income Plan may be any plan then offered by us. Income Base The Income Base is the greater of Income Base A or Income Base B. Income base is used solely for the purpose of calculating the Income Benefit Combination and does not provide a Cash Value or guarantee performance of any investment option. Income Base A. o On the Rider Date, Income Base A is equal to the Cash Value. o After the Rider Date, Income Base A is recalculated as follows on the Contract anniversary and when a purchase payment or withdrawal is made. o For the purchase payments, Income Base A is equal to the most recently calculated Income Base A plus the purchase payment. o For withdrawals, Income Base A is equal to the most recently calculated Income Base A reduced by a withdrawal adjustment. o On each Contract anniversary, Income Base A is equal to the greater of the Cash Value or the most recently calculated Income Base A. In the absence of any withdrawals or purchase payments, Income Base A will be the greatest of the Cash Value on the Rider Date and all Contract anniversary Cash Values between the Rider Date and the Payout Start Date. Income Base A will be recalculated for purchase payments, for withdrawals and on Contract anniversaries until the first Contract anniversary after the 85th birthday of the oldest Owner or, if no Owner is a living individual, the oldest Annuitant. After that date, Income Base A will be recalculated only for purchase payments and withdrawals. Income Base B. On the Rider Date, Income Base B is equal to the Cash Value. After the Rider Date, Income Base B plus any subsequent purchase payments and less a withdrawal adjustment for any subsequent withdrawals will accumulate daily at a rate equivalent to 5% per year until the first Contract anniversary after the 85th birthday of the oldest Owner or, if the Owner is not a living individual, the oldest Annuitant. Withdrawal Adjustment The adjustment is equal to (1) divided by (2), with the result multiplied by (3) where: (1) = the withdrawal amount. (2) = the Cash Value immediately prior to the withdrawal. (3) = the most recently calculated Income Base. Guaranteed Income Benefit The Guaranteed Income Benefit amount is determined by applying the Income Base less any applicable taxes to the guaranteed rates for the Income Plan elected by the Owner. The Income Plan selected must satisfy the conditions defined in Qualifications above. The rates are the guaranteed rates defined in the Income Payment Tables section of the Contract for either a single or joint life with a period certain. On the Payout Start Date, the income payment will be the greater of the Guaranteed Income Benefit and the income payment provided in the Payout Phase section of the Contract. Mortality and Expense Risk Charge The Mortality and Expense Risk Charge provision of your Contract is modified as follows: On and after the Rider Date, the maximum annualized Mortality and Expense Risk Charge is increased by 0.50% for this rider. Except as amended by this rider, the Contract remains unchanged. Michael J. Velotta Thomas J. Wilson [GRAPHIC OMITTED][GRAPHIC OMITTED] Secretary Chairman and Chief Executive Officer EX-5 3 FORM OF APPLICATION MORGAN STANLEY DEAN WITTER VA3 FLEXIBLE PREMIUM DEFERRED VARIABLE ANNUITY ISSUED BY: NORTHBROOK LIFE INSURANCE COMPANY, NORTHBROOK, ILLINOIS PO Box 94040, Palatine, IL 60094-4040 Telephone: 1-800-654-2397 Overnight Address: 3100 Sanders Rd., M4A, Northbrook, IL 60062 OW N E R(S) Name _____________________________ (_)M ( )F Birthdate __/__/___ Address______________________________Soc. Sec. no. ____/___/____ Name _____________________________ (_)M ( )F Birthdate __/__/___ Address______________________________Soc. Sec. no. ____/___/____ AN N U I TA N T Leave blank if Annuitant is the same as sole Owner; otherwise complete. Name _____________________________ (_)M ( )F Birthdate __/__/___ Address______________________________Soc. Sec. no. ____/___/____ Relationship to Owner___________________________________________ BE N E F I C I A R Y(I E S) Name _____________________________ Relationship to Owner _______ Name _____________________________ Relationship to Owner ______ PU R C H A S E PAY M E N T/PL A N OP T I O N S Total Purchase Payment $________________________________________________________ VARIABLE PORTFOLIO SECTION MSDW Universal Funds AIM Variable Ins. Funds (_) Capital Appreciation __% (_) Equity Growth __% (_) Growth __% (_) International Magnum __% (_) Value __% (_) Emerging Markets Equity __% (_) U.S. Real Estate __% Alliance Variable Product Series Funds (_) Mid-Cap Value __% (_) Premier Growth __% (_) Growth __% Putnam Variable Trust (_) Growth & Income __% (_) International Growth __% (_)Growth & Income __% MSDW Variable Investment Series (_) Voyager __% (_) Money Market __% (_) Quality Income Plus __% Van Kampen Life Investment Trust (_) High Yield __% (_) Emerging Growth __% (_) Utilities __% (_) Income Builder __% Fixed Account (if available) (_) Dividend Growth __% (_) DCA Fixed Account __% (_) Capital Growth __% (_) Fixed __% (_) Global Div. Growth __% (_) _____________________ __% (_) European Growth __% Total 100% (_) Pacific Growth __% (_) Equity __% Plan Options (Choose one from options (_) S & P 500 Index __% available in your state. If none is (_) Competitive Edge __% selected, base policy will apply): (_) Strategist __% (_) Agressive Equity __% (_) Performance Death Benefit Option (_) Short-Term Bond __% (Highest Anniversary Value); or (_) Performance Income Benefit 2 Option (GuMBI); or (_) Performance Benefit Combination 2 Option (_) Death Benefit Combination Option Best of the Best) RE P L A C E M E N T Will this annuity replace or change any IN F O R M AT I O N existing annuity or life insurance? (_)Yes (_)No (If Yes, complete the following.) Company_______________________Policy No. ______ Cost basis ammount ___________Policy Date _____ TA X QU A L I F I E D PL A N (_)Yes (_)No (If Yes, complete the following.) (_) Traditional IRA (_) Roth IRA (_)SEP (_)Other (_) Rollover (_)4-1(a)(pension) (_) Transfer (_)403(b)(TSA) (_) Contribution $_______ Contribution Year ____ SP E C I A L IN S T R U C T I O N S _______________________________________ ---------------------------------------- NLR738 41330 MORGAN STANLEY DEAN WITTER VA3 FLEXIBLE PREMIUM DEFERRED VARIABLE ANNUITY ISSUED BY: NORTHBROOK LIFE INSURANCE COMPANY, NORTHBROOK, ILLINOIS PO Box 94040, Palatine, IL 60094-4040 (_) Telephone: 1-800-654-2397 (_)Overnight Address: 3100 Sanders Rd., M4A, Northbrook, IL The following states require insurance applicants to acknowledge a fraud warning/disclosure statement. Please refer to the fraud warning/disclosure statement for your state as indicated below. FOR APPLICANTS IN ARIZONA: Upon your written request we will provide you within a reasonable period of time, reasonable, factual information regarding the benefits and provisions of the annuity contract for which you are applying. If for any reason you are not satisfied with the contract, you may return the contract within twenty days after you receive it. If the contract you are applying for is a variable annuity, you will receive an amount equal to the sum of (i) the difference between the premiums paid and the amounts allocated to any account under the contract and (ii) the contract Value on the date the returned contract is received by our company or our agent. FOR APPLICANTS IN ARKANSAS, KENTUCKY, MAINE, NEW MEXICO, OHIO, OREGON & PENNSYLVANA: Any person who knowingly and with intent to defraud any insurance company or other person files an application for insurance or statement of claim containing any materially false information or conceals, for the purpose of misleading, information concerning any fact material thereto commits a fraudulent insurance act, which may be a crime and subjects such person to criminal and civil penalties. FOR APPLICANTS IN COLORADO: It is unlawful to knowingly provide false, incomplete, or misleading facts or information to an insurance company for the purpose of defrauding or attempting to defraud the company. Penalties may include imprisonment, fines, denial of insurance, and civil damages. Any insurance company or agent of an insurance company who knowingly provides false, incomplete, or misleading facts or information to a policy holder or claimant for the purpose of defrauding or attempting to defraud the policy holder or claimant with regard to a settlement or award payable from insurance proceeds shall be reported to the Colorado Division of Insurance within the Department of Regulatory Agencies. FOR APPLICANTS IN FLORIDA: Any person who knowingly and with intent to injure, defraud, or deceive any insurer files a statement of claim or an application containing any false, incomplete, or misleading information is guilty of a felony of the third degree. FOR APPLICANTS IN LOUISIANA: Any person who knowingly presents a false or fraudulent claim for payment of a loss or benefit or knowingly presents false information in an application for insurance is guilty of a crime and may be subject to fines and confinement in prison. FOR APPLICANTS IN NEW JERSEY: Any person who includes any false or misleading information on an application for an insurance policy is subject to criminal and civil penalties. FOR APPLICANTS IN WASHINGTON, D.C.: WARNING: It is a crime to provide false or misleading information to an insurer for the purpose of defrauding the insurer or any other person. Penalties include imprisonment and/or fines. In addition, an insurer may deny insurance benefits if false information materially related to a claim was provided by the applicant. SIGNATURE(S) (contract applications and certificate enrollments are referred to as applications.) A copy of this application signed by the Representative will be the receipt for the first purchase payment. If Northbrook Life Insurance Company ("Northbrook Life") declines this application, Northbrook Life will have no liability except to return the first purchase payment. I have read the above statements and represent that they are complete and true to the best of my knowledge and belief. I agree that this application shall be a part of the annuity issued by Northbrook Life. By accepting the annuity issued, I agree to any additions or corrections to this application. Northbrook Life will obtain written agreement from me for any change in the benefits, type of plan, or birthdates. I understand that annuity values and income payments based on the investment experience of a separate account are variable and not guaranteed as to dollar amount. I acknowledge receipt of the current prospectus for the Flexible Premium Deferred Variable Annuity. Signed at____________________________________________Date_____/_____/_____ City State Owner(s)__________________________________________________________________ Annuitant_________________________________________________________________ FINANCIAL ADVISOR USE ONLY Will the annuity applied for replace or change any existing annuity or life insurance? (_) Yes (_) No FA Name (Please print)_______________________ Phone No.(___)___-______ FA Signature_________________________________ Branch/FA No. __________ FL License No. _____________________________ EX-10 4 INDEPENDENT AUDITORS CONSENT INDEPENDENT AUDITORS' CONSENT We consent to the use in this Post-Effective Amendment No. 24 to Registration Statement No. 033-35412 of Northbrook Variable Annuity Account II of Northbrook Life Insurance Company on Form N-4 of our report dated February 25, 2000 relating to the financial statements and the related financial statement schedule of Northbrook Life Insurance Company, and our report dated March 27, 2000 relating to the financial statements of Northbrook Variable Annuity Account II, appearing in the Statement of Additional Information (which is incorporated by reference in the Prospectus of Northbrook Variable Annuity Account II of Northbrook Life Insurance Company), which is a part of such Registration Statement, and to the reference to us under the heading "Experts" in such Statement of Additional Information. Chicago, Illinois April 28, 2000 FREEDMAN, LEVY, KROLL & SIMONDS CONSENT OF FREEDMAN, LEVY, KROLL & SIMONDS We hereby consent to the reference to our firm under the caption "Legal Matters" in the prospectus contained in Post-Effective Amendment No. 26 to the Form N-4 Registration Statement of Northbrook Variable Annuity Account II (File No. 033-35412). /s/ Freedman, Levy, Kroll & Simonds FREEDMAN, LEVY, KROLL & SIMONDS Washington, D.C. April 30, 2000 EX-13 5 COMPUTATIONS OF PERFORMANCE NUMBERS
Base Standardized None Base Non-Standarized None Base Adjusted Historical-1 Year 01/00/00 NLIC VAII MONEY MARKET 12/31/98 NO. YEARS 1 TO 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/98 1000 9.673374 103.3765 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 103.3765 1033.765 1 FORMULA: 1000*(1+T)= 1033.765 - (0.85 * 1000 * 0.05) = 991.2654 T = -0.00873 R = -0.00873 NLIC VAII HIGH YIELD 12/31/98 NO. YEARS 1 TO 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/98 1000 10.27271 97.34529 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 97.34529 973.4529 1 FORMULA: 1000*(1+T)= 973.4529 - (0.85 * 1000 * 0.05) = 930.9529 T = -0.06905 R = -0.06905 NLIC VAII EQUITY 12/31/98 NO. YEARS 1 TO 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/98 1000 6.391077 156.4682 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 156.4682 1564.682 1 FORMULA: 1000*(1+T)= 1564.682 - (0.85 * 1000 * 0.05) = 1522.182 T = 0.522182 R = 0.522182 NLIC VAII QUALITY INCOME 12/31/98 NO. YEARS 1 TO 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/98 1000 10.59313 94.40083 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 94.40083 944.0083 1 FORMULA: 1000*(1+T)= 944.0083 - (0.85 * 1000 * 0.05) = 901.5083 T = -0.09849 R = -0.09849 NLIC VAII STRATEGIST 12/31/98 NO. YEARS 1 TO 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/98 1000 8.637208 115.7782 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 115.7782 1157.782 1 FORMULA: 1000*(1+T)= 1157.782 - (0.85 * 1000 * 0.05) = 1115.282 T = 0.115282 R = 0.115282 NLIC VAII DIVIDEND GROWTH 12/31/98 NO. YEARS 1 TO 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/98 1000 10.38422 96.29999 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 96.29999 962.9999 1 FORMULA: 1000*(1+T)= 962.9999 - (0.85 * 1000 * 0.05) = 920.4999 T = -0.0795 R = -0.0795 NLIC VAII UTILITIES 12/31/98 NO. YEARS 1 TO 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/98 1000 8.99245 111.2044 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 111.2044 1112.044 1 FORMULA: 1000*(1+T)= 1112.044 - (0.85 * 1000 * 0.05) = 1069.544 T = 0.069544 R = 0.069544 NLIC VAII EUROPEAN GROWTH 12/31/98 NO. YEARS 1 TO 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/98 1000 7.850323 127.3833 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 127.3833 1273.833 1 FORMULA: 1000*(1+T)= 1273.833 - (0.85 * 1000 * 0.05) = 1231.333 T = 0.231333 R = 0.231333 NLIC VAII CAPITAL GROWTH 12/31/98 NO. YEARS 1 TO 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/98 1000 7.603971 131.5102 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 131.5102 1315.102 1 FORMULA: 1000*(1+T)= 1315.102 - (0.85 * 1000 * 0.05) = 1272.602 T = 0.272602 R = 0.272602 NLIC VAII PACIFIC GROWTH 12/31/98 NO. YEARS 1 TO 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/98 1000 6.102339 163.8716 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 163.8716 1638.716 1 FORMULA: 1000*(1+T)= 1638.716 - (0.85 * 1000 * 0.05) = 1596.216 T = 0.596216 R = 0.596216 NLIC VAII GLOBAL DIVIDEND GROWTH 12/31/98 NO. YEARS 1 TO 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/98 1000 8.840504 113.1157 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 113.1157 1131.157 1 FORMULA: 1000*(1+T)= 1131.157 - (0.85 * 1000 * 0.05) = 1088.657 T = 0.088657 R = 0.088657 NLIC VAII CAPITAL APPRECIATION 12/31/98 NO. YEARS 1 TO 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/98 1000 10.14945 98.52752 FEE 12/31/99 0 10.87141 0 RESULTING VALUE 12/31/99 10.87141 98.52752 1071.133 1 FORMULA: 1000*(1+T)= 1071.133 - (0.85 * 1000 * 0.05) = 1028.633 T = 0.028633 R = 0.028633 NLIC VAII INCOME BUILDER 12/31/98 NO. YEARS 1 TO 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/98 1000 9.467183 105.628 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 105.628 1056.28 1 FORMULA: 1000*(1+T)= 1056.28 - (0.85 * 1000 * 0.05) = 1013.78 T = 0.01378 R = 0.01378 NLIC VAII EQUITY GROWTH 12/31/98 NO. YEARS 1 TO 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/98 1000 7.268459 137.5807 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 137.5807 1375.807 1 FORMULA: 1000*(1+T)= 1375.807 - (0.85 * 1000 * 0.05) = 1333.307 T = 0.333307 R = 0.333307 NLIC VAII INTERNATIONAL MAGNUM 12/31/98 NO. YEARS 1 TO 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/98 1000 8.096178 123.5151 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 123.5151 1235.151 1 FORMULA: 1000*(1+T)= 1235.151 - (0.85 * 1000 * 0.05) = 1192.651 T = 0.192651 R = 0.192651 NLIC VAII EMERGING MARKETS 12/31/98 NO. YEARS 1 TO 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/98 1000 5.205777 192.0943 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 192.0943 1920.943 1 FORMULA: 1000*(1+T)= 1920.943 - (0.85 * 1000 * 0.05) = 1878.443 T = 0.878443 R = 0.878443 NLIC VAII EMERGING GROWTH 12/31/98 NO. YEARS 1 TO 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/98 1000 11.99735 83.35171 FEE 12/31/99 0 24.19191 0 RESULTING VALUE 12/31/99 24.19191 83.35171 2016.437 1 FORMULA: 1000*(1+T)= 2016.437 - (0.85 * 1000 * 0.05) = 1973.937 T = 0.973937 R = 0.973937 NLIC VAII REAL ESTATE 12/31/98 NO. YEARS 1 TO 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/98 1000 10.28734 97.2069 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 97.2069 972.069 1 FORMULA: 1000*(1+T)= 972.069 - (0.85 * 1000 * 0.05) = 929.569 T = -0.07043 R = -0.07043 NLIC VAII COMPETITIVE EDGE 12/31/98 NO. YEARS 1 TO 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/98 1000 8.038149 124.4068 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 124.4068 1244.068 1 FORMULA: 1000*(1+T)= 1244.068 - (0.85 * 1000 * 0.05) = 1201.568 T = 0.201568 R = 0.201568 NLIC VAII S&P 500 INDEX 12/31/98 NO. YEARS 1 TO 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/98 1000 8.467876 118.0934 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 118.0934 1180.934 1 FORMULA: 1000*(1+T)= 1180.934 - (0.85 * 1000 * 0.05) = 1138.434 T = 0.138434 R = 0.138434 NLIC VAII AGGRESSIVE EQUITY 12/31/98 NO. YEARS 1 TO 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/98 1000 #VALUE! #VALUE! FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 #VALUE! #VALUE! 1 FORMULA: 1000*(1+T)= #VALUE! - (0.85 * 1000 * 0.05) = #VALUE! T = N/A R = N/A NLIC VAII SHORT TERM BOND 12/31/98 NO. YEARS 1 TO 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/98 1000 #VALUE! #VALUE! FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 #VALUE! #VALUE! 1 FORMULA: 1000*(1+T)= #VALUE! - (0.85 * 1000 * 0.05) = #VALUE! T = N/A R = N/A Alliance Premier Growth 12/31/98 NO. YEARS 1 TO 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/98 1000 #VALUE! #VALUE! FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 #VALUE! #VALUE! 1 FORMULA: 1000*(1+T)= #VALUE! - (0.85 * 1000 * 0.05) = #VALUE! T = N/A R = N/A Alliance Growth 12/31/98 NO. YEARS 1 TO 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/98 1000 7.537582 132.6685 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 132.6685 1326.685 1 FORMULA: 1000*(1+T)= 1326.685 - (0.85 * 1000 * 0.05) = 1284.185 T = 0.284185 R = 0.284185 Alliance Growth and Income 12/31/98 NO. YEARS 1 TO 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/98 1000 9.101211 109.8755 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 109.8755 1098.755 1 FORMULA: 1000*(1+T)= 1098.755 - (0.85 * 1000 * 0.05) = 1056.255 T = 0.056255 R = 0.056255 Aim Cap App 12/31/98 NO. YEARS 1 TO 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/98 1000 7.008818 142.6774 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 142.6774 1426.774 1 FORMULA: 1000*(1+T)= 1426.774 - (0.85 * 1000 * 0.05) = 1384.274 T = 0.384274 R = 0.384274 Aim Growth 12/31/98 NO. YEARS 1 TO 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/98 1000 7.494916 133.4238 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 133.4238 1334.238 1 FORMULA: 1000*(1+T)= 1334.238 - (0.85 * 1000 * 0.05) = 1291.738 T = 0.291738 R = 0.291738 Aim Value 12/31/98 NO. YEARS 1 TO 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/98 1000 7.802904 128.1574 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 128.1574 1281.574 1 FORMULA: 1000*(1+T)= 1281.574 - (0.85 * 1000 * 0.05) = 1239.074 T = 0.239074 R = 0.239074 Putnam International Growth 12/31/98 NO. YEARS 1 TO 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/98 1000 6.333368 157.8939 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 157.8939 1578.939 1 FORMULA: 1000*(1+T)= 1578.939 - (0.85 * 1000 * 0.05) = 1536.439 T = 0.536439 R = 0.536439 Putnam Voyager 12/31/98 NO. YEARS 1 TO 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/98 1000 6.414311 155.9014 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 155.9014 1559.014 1 FORMULA: 1000*(1+T)= 1559.014 - (0.85 * 1000 * 0.05) = 1516.514 T = 0.516514 R = 0.516514 Putnam Growth & Income 12/31/98 NO. YEARS 1 TO 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/98 1000 9.989813 100.102 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 100.102 1001.02 1 FORMULA: 1000*(1+T)= 1001.02 - (0.85 * 1000 * 0.05) = 958.5198 T = -0.04148 R = -0.04148 MSDW Mid Cap 12/31/98 NO. YEARS 1 TO 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/98 1000 8.404931 118.9778 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 118.9778 1189.778 1 FORMULA: 1000*(1+T)= 1189.778 - (0.85 * 1000 * 0.05) = 1147.278 T = 0.147278 R = 0.147278 Base Adjsuted Historical- 5 Year 01/00/00 NLIC VAII MONEY MARKET 12/30/94 TO NO. YEARS 5 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/94 1000 8.309784 120.3401 FEE 12/31/95 0 8.658322 0 FEE 12/31/96 0 8.978355 0 FEE 12/31/97 0 9.321671 0 FEE 12/31/98 0 9.673374 0 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 120.3401 1203.401 5 FORMULA: 1000*(1+T)= 1203.401 - (0.85 * 1000 * 0.02) = 1186.401 T = 0.034776 R = 0.186401 NLIC VAII HIGH YIELD 12/30/94 TO NO. YEARS 5 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/94 1000 8.045656 124.2907 FEE 12/31/95 0 9.104495 0 FEE 12/31/96 0 10.05786 0 FEE 12/31/97 0 11.10052 0 FEE 12/31/98 0 10.27271 0 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 124.2907 1242.907 5 FORMULA: 1000*(1+T)= 1242.907 - (0.85 * 1000 * 0.02) = 1225.907 T = 0.041577 R = 0.225907 NLIC VAII EQUITY 12/30/94 TO NO. YEARS 5 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/94 1000 2.323816 430.3266 FEE 12/31/95 0 3.303923 0 FEE 12/31/96 0 3.662306 0 FEE 12/31/97 0 4.965798 0 FEE 12/31/98 0 6.391077 0 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 430.3266 4303.266 5 FORMULA: 1000*(1+T)= 4303.266 - (0.85 * 1000 * 0.02) = 4286.266 T = 0.337876 R = 3.286266 NLIC VAII QUALITY INCOME 12/30/94 TO NO. YEARS 5 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/94 1000 7.314494 136.7149 FEE 12/31/95 0 8.996071 0 FEE 12/31/96 0 9.012987 0 FEE 12/31/97 0 9.8804 0 FEE 12/31/98 0 10.59313 0 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 136.7149 1367.149 5 FORMULA: 1000*(1+T)= 1367.149 - (0.85 * 1000 * 0.02) = 1350.149 T = 0.061882 R = 0.350149 NLIC VAII STRATEGIST 12/30/94 TO NO. YEARS 5 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/94 1000 5.038835 198.4586 FEE 12/31/95 0 5.43387 0 FEE 12/31/96 0 6.166024 0 FEE 12/31/97 0 6.91794 0 FEE 12/31/98 0 8.637208 0 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 198.4586 1984.586 5 FORMULA: 1000*(1+T)= 1984.586 - (0.85 * 1000 * 0.02) = 1967.586 T = 0.144951 R = 0.967586 NLIC VAII DIVIDEND GROWTH 12/30/94 TO NO. YEARS 5 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/94 1000 4.541551 220.1891 FEE 12/31/95 0 6.077488 0 FEE 12/31/96 0 7.432281 0 FEE 12/31/97 0 9.210342 0 FEE 12/31/98 0 10.38422 0 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 220.1891 2201.891 5 FORMULA: 1000*(1+T)= 2201.891 - (0.85 * 1000 * 0.02) = 2184.891 T = 0.169192 R = 1.184891 NLIC VAII UTILITIES 12/30/94 TO NO. YEARS 5 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/94 1000 4.317343 231.6239 FEE 12/31/95 0 5.47558 0 FEE 12/31/96 0 5.870685 0 FEE 12/31/97 0 7.364693 0 FEE 12/31/98 0 8.99245 0 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 231.6239 2316.239 5 FORMULA: 1000*(1+T)= 2316.239 - (0.85 * 1000 * 0.02) = 2299.239 T = 0.181182 R = 1.299239 NLIC VAII EUROPEAN GROWTH 12/30/94 TO NO. YEARS 5 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/94 1000 3.523222 283.8311 FEE 12/31/95 0 4.370326 0 FEE 12/31/96 0 5.604557 0 FEE 12/31/97 0 6.418759 0 FEE 12/31/98 0 7.850323 0 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 283.8311 2838.311 5 FORMULA: 1000*(1+T)= 2838.311 - (0.85 * 1000 * 0.02) = 2821.311 T = 0.230524 R = 1.821311 NLIC VAII CAPITAL GROWTH 12/30/94 TO NO. YEARS 5 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/94 1000 3.615471 276.5891 FEE 12/31/95 0 4.764665 0 FEE 12/31/96 0 5.243199 0 FEE 12/31/97 0 6.442403 0 FEE 12/31/98 0 7.603971 0 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 276.5891 2765.891 5 FORMULA: 1000*(1+T)= 2765.891 - (0.85 * 1000 * 0.02) = 2748.891 T = 0.224141 R = 1.748891 NLIC VAII PACIFIC GROWTH 12/30/94 TO NO. YEARS 5 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/94 1000 10.40229 96.13267 FEE 12/31/95 0 10.95865 0 FEE 12/31/96 0 11.23118 0 FEE 12/31/97 0 6.903126 0 FEE 12/31/98 0 6.102339 0 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 96.13267 961.3267 5 FORMULA: 1000*(1+T)= 961.3267 - (0.85 * 1000 * 0.02) = 944.3267 T = -0.01139 R = -0.05567 NLIC VAII GLOBAL DIVIDEND GROWTH 12/30/94 TO NO. YEARS 5 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/94 1000 5.148634 194.2263 FEE 12/31/95 0 6.209886 0 FEE 12/31/96 0 7.203625 0 FEE 12/31/97 0 7.962688 0 FEE 12/31/98 0 8.840504 0 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 194.2263 1942.263 5 FORMULA: 1000*(1+T)= 1942.263 - (0.85 * 1000 * 0.02) = 1925.263 T = 0.139982 R = 0.925263 NLIC VAII CAPITAL APPRECIATION 12/30/94 TO NO. YEARS 5 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/94 1000 #VALUE! #VALUE! FEE 12/31/95 0 #VALUE! #VALUE! FEE 12/31/96 0 #VALUE! #VALUE! FEE 12/31/97 0 11.17696 0 FEE 12/31/98 0 10.14945 0 FEE 12/31/99 0 10.87141 0 RESULTING VALUE 12/31/99 10.87141 #VALUE! #VALUE! 5 FORMULA: 1000*(1+T)= #VALUE! - (0.85 * 1000 * 0.02) = #VALUE! T = N/A R = N/A NLIC VAII INCOME BUILDER 12/30/94 TO NO. YEARS 5 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/94 1000 #VALUE! #VALUE! FEE 12/31/95 0 #VALUE! #VALUE! FEE 12/31/96 0 #VALUE! #VALUE! FEE 12/31/97 0 9.29703 0 FEE 12/31/98 0 9.467183 0 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 #VALUE! #VALUE! 5 FORMULA: 1000*(1+T)= #VALUE! - (0.85 * 1000 * 0.02) = #VALUE! T = N/A R = N/A NLIC VAII EQUITY GROWTH 12/30/94 TO NO. YEARS 5 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/94 1000 #VALUE! #VALUE! FEE 12/31/95 0 #VALUE! #VALUE! FEE 12/31/96 0 #VALUE! #VALUE! FEE 12/31/97 0 6.17583 0 FEE 12/31/98 0 7.268459 0 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 #VALUE! #VALUE! 5 FORMULA: 1000*(1+T)= #VALUE! - (0.85 * 1000 * 0.02) = #VALUE! T = N/A R = N/A NLIC VAII INTERNATIONAL MAGNUM 12/30/94 TO NO. YEARS 5 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/94 1000 #VALUE! #VALUE! FEE 12/31/95 0 #VALUE! #VALUE! FEE 12/31/96 0 #VALUE! #VALUE! FEE 12/31/97 0 7.558202 0 FEE 12/31/98 0 8.096178 0 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 #VALUE! #VALUE! 5 FORMULA: 1000*(1+T)= #VALUE! - (0.85 * 1000 * 0.02) = #VALUE! T = N/A R = N/A NLIC VAII EMERGING MARKETS 12/30/94 TO NO. YEARS 5 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/94 1000 #VALUE! #VALUE! FEE 12/31/95 0 #VALUE! #VALUE! FEE 12/31/96 0 7.068269 0 FEE 12/31/97 0 6.994954 0 FEE 12/31/98 0 5.205777 0 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 #VALUE! #VALUE! 5 FORMULA: 1000*(1+T)= #VALUE! - (0.85 * 1000 * 0.02) = #VALUE! T = N/A R = N/A NLIC VAII EMERGING GROWTH 12/30/94 TO NO. YEARS 5 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/94 1000 #VALUE! #VALUE! FEE 12/31/95 0 6.465775 0 FEE 12/31/96 0 7.440492 0 FEE 12/31/97 0 8.840074 0 FEE 12/31/98 0 11.99735 0 FEE 12/31/99 0 24.19191 0 RESULTING VALUE 12/31/99 24.19191 #VALUE! #VALUE! 5 FORMULA: 1000*(1+T)= #VALUE! - (0.85 * 1000 * 0.02) = #VALUE! T = N/A R = N/A NLIC VAII REAL ESTATE 12/30/94 TO NO. YEARS 5 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/94 1000 #VALUE! #VALUE! FEE 12/31/95 0 #VALUE! #VALUE! FEE 12/31/96 0 #VALUE! #VALUE! FEE 12/31/97 0 11.97718 0 FEE 12/31/98 0 10.28734 0 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 #VALUE! #VALUE! 5 FORMULA: 1000*(1+T)= #VALUE! - (0.85 * 1000 * 0.02) = #VALUE! T = N/A R = N/A NLIC VAII COMPETITIVE EDGE 12/30/94 TO NO. YEARS 5 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/94 1000 #VALUE! #VALUE! FEE 12/31/95 0 #VALUE! #VALUE! FEE 12/31/96 0 #VALUE! #VALUE! FEE 12/31/97 0 #VALUE! #VALUE! FEE 12/31/98 0 8.038149 0 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 #VALUE! #VALUE! 5 FORMULA: 1000*(1+T)= #VALUE! - (0.85 * 1000 * 0.02) = #VALUE! T = N/A R = N/A NLIC VAII S&P 500 INDEX 12/30/94 TO NO. YEARS 5 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/94 1000 #VALUE! #VALUE! FEE 12/31/95 0 #VALUE! #VALUE! FEE 12/31/96 0 #VALUE! #VALUE! FEE 12/31/97 0 #VALUE! #VALUE! FEE 12/31/98 0 8.467876 0 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 #VALUE! #VALUE! 5 FORMULA: 1000*(1+T)= #VALUE! - (0.85 * 1000 * 0.02) = #VALUE! T = N/A R = N/A NLIC VAII AGGRESSIVE EQUITY 12/30/94 TO NO. YEARS 5 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/94 1000 #VALUE! #VALUE! FEE 12/31/95 0 #VALUE! #VALUE! FEE 12/31/96 0 #VALUE! #VALUE! FEE 12/31/97 0 #VALUE! #VALUE! FEE 12/31/98 0 #VALUE! #VALUE! FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 #VALUE! #VALUE! 5 FORMULA: 1000*(1+T)= #VALUE! - (0.85 * 1000 * 0.02) = #VALUE! T = N/A R = N/A NLIC VAII SHORT TERM BOND 12/30/94 TO NO. YEARS 5 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/94 1000 #VALUE! #VALUE! FEE 12/31/95 0 #VALUE! #VALUE! FEE 12/31/96 0 #VALUE! #VALUE! FEE 12/31/97 0 #VALUE! #VALUE! FEE 12/31/98 0 #VALUE! #VALUE! FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 #VALUE! #VALUE! 5 FORMULA: 1000*(1+T)= #VALUE! - (0.85 * 1000 * 0.02) = #VALUE! T = N/A R = N/A Alliance Premier Growth 12/30/94 TO NO. YEARS 5 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/94 1000 #VALUE! #VALUE! FEE 12/31/95 0 #VALUE! #VALUE! FEE 12/31/96 0 #VALUE! #VALUE! FEE 12/31/97 0 #VALUE! #VALUE! FEE 12/31/98 0 #VALUE! #VALUE! FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 #VALUE! #VALUE! 5 FORMULA: 1000*(1+T)= #VALUE! - (0.85 * 1000 * 0.02) = #VALUE! T = N/A R = N/A Alliance Growth 12/30/94 TO NO. YEARS 5 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/94 1000 2.735042 365.6251 FEE 12/31/95 0 3.649857 0 FEE 12/31/96 0 4.626742 0 FEE 12/31/97 0 5.935071 0 FEE 12/31/98 0 7.537582 0 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 365.6251 3656.251 5 FORMULA: 1000*(1+T)= 3656.251 - (0.85 * 1000 * 0.02) = 3639.251 T = 0.294799 R = 2.639251 Alliance Growth and Income 12/30/94 TO NO. YEARS 5 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/94 1000 3.661297 273.1273 FEE 12/31/95 0 4.905209 0 FEE 12/31/96 0 6.005241 0 FEE 12/31/97 0 7.630825 0 FEE 12/31/98 0 9.101211 0 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 273.1273 2731.273 5 FORMULA: 1000*(1+T)= 2731.273 - (0.85 * 1000 * 0.02) = 2714.273 T = 0.221042 R = 1.714273 Aim Cap App 12/30/94 TO NO. YEARS 5 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/94 1000 3.525933 283.6128 FEE 12/31/95 0 4.720264 0 FEE 12/31/96 0 5.475334 0 FEE 12/31/97 0 6.131454 0 FEE 12/31/98 0 7.008818 0 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 283.6128 2836.128 5 FORMULA: 1000*(1+T)= 2836.128 - (0.85 * 1000 * 0.02) = 2819.128 T = 0.230334 R = 1.819128 Aim Growth 12/30/94 TO NO. YEARS 5 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/94 1000 3.132831 319.2001 FEE 12/31/95 0 4.165636 0 FEE 12/31/96 0 4.8529 0 FEE 12/31/97 0 6.074281 0 FEE 12/31/98 0 7.494916 0 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 319.2001 3192.001 5 FORMULA: 1000*(1+T)= 3192.001 - (0.85 * 1000 * 0.02) = 3175.001 T = 0.259937 R = 2.175001 Aim Value 12/30/94 TO NO. YEARS 5 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/94 1000 3.371506 296.6033 FEE 12/31/95 0 4.532231 0 FEE 12/31/96 0 5.142854 0 FEE 12/31/97 0 6.275869 0 FEE 12/31/98 0 7.802904 0 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 296.6033 2966.033 5 FORMULA: 1000*(1+T)= 2966.033 - (0.85 * 1000 * 0.02) = 2949.033 T = 0.241469 R = 1.949033 Putnam International Growth 12/30/94 TO NO. YEARS 5 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/94 1000 #VALUE! #VALUE! FEE 12/31/95 0 #VALUE! #VALUE! FEE 12/31/96 0 #VALUE! #VALUE! FEE 12/31/97 0 5.418389 0 FEE 12/31/98 0 6.333368 0 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 #VALUE! #VALUE! 5 FORMULA: 1000*(1+T)= #VALUE! - (0.85 * 1000 * 0.02) = #VALUE! T = N/A R = N/A Putnam Voyager 12/30/94 TO NO. YEARS 5 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/94 1000 2.723599 367.1613 FEE 12/31/95 0 3.77433 0 FEE 12/31/96 0 4.200343 0 FEE 12/31/97 0 5.234983 0 FEE 12/31/98 0 6.414311 0 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 367.1613 3671.613 5 FORMULA: 1000*(1+T)= 3671.613 - (0.85 * 1000 * 0.02) = 3654.613 T = 0.29589 R = 2.654613 Putnam Growth & Income 12/30/94 TO NO. YEARS 5 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/94 1000 4.439453 225.253 FEE 12/31/95 0 5.979007 0 FEE 12/31/96 0 7.180996 0 FEE 12/31/97 0 8.78246 0 FEE 12/31/98 0 9.989813 0 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 225.253 2252.53 5 FORMULA: 1000*(1+T)= 2252.53 - (0.85 * 1000 * 0.02) = 2235.53 T = 0.174562 R = 1.23553 MSDW Mid Cap 12/30/94 TO NO. YEARS 5 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/94 1000 #VALUE! #VALUE! FEE 12/31/95 0 #VALUE! #VALUE! FEE 12/31/96 0 #VALUE! #VALUE! FEE 12/31/97 0 7.54933 0 FEE 12/31/98 0 8.404931 0 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 #VALUE! #VALUE! 5 FORMULA: 1000*(1+T)= #VALUE! - (0.85 * 1000 * 0.02) = #VALUE! T = N/A R = N/A Base Adjsuted Historical-10 Years/Since Inception - NLIC VAII MONEY MARKET 12/30/89 TO NO. YEARS 10 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/89 1000 7.054811 141.7473 FEE 12/31/90 0 7.512784 0 FEE 12/31/91 0 7.838373 0 FEE 12/31/92 0 7.998876 0 FEE 12/31/93 0 8.108578 0 FEE 12/31/94 0 8.309784 0 FEE 12/31/95 0 8.658322 0 FEE 12/31/96 0 8.978355 0 FEE 12/31/97 0 9.321671 0 FEE 12/31/98 0 9.673374 0 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 141.7473 1417.473 10 FORMULA: 1000*(1+T)= 1417.473 - (0.85 * 1000 * 0) = 1417.473 T = 0.035503 R = 0.417473 NLIC VAII HIGH YIELD 12/30/89 TO NO. YEARS 10 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/89 1000 5.154329 194.0117 FEE 12/31/90 0 3.721788 0 FEE 12/31/91 0 5.825588 0 FEE 12/31/92 0 6.806661 0 FEE 12/31/93 0 8.339327 0 FEE 12/31/94 0 8.045656 0 FEE 12/31/95 0 9.104495 0 FEE 12/31/96 0 10.05786 0 FEE 12/31/97 0 11.10052 0 FEE 12/31/98 0 10.27271 0 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 194.0117 1940.117 10 FORMULA: 1000*(1+T)= 1940.117 - (0.85 * 1000 * 0) = 1940.117 T = 0.06852 R = 0.940117 NLIC VAII EQUITY 12/30/89 TO NO. YEARS 10 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/89 1000 1.438263 695.283 FEE 12/31/90 0 1.367541 0 FEE 12/31/91 0 2.145893 0 FEE 12/31/92 0 2.120425 0 FEE 12/31/93 0 2.504321 0 FEE 12/31/94 0 2.323816 0 FEE 12/31/95 0 3.303923 0 FEE 12/31/96 0 3.662306 0 FEE 12/31/97 0 4.965798 0 FEE 12/31/98 0 6.391077 0 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 695.283 6952.83 10 FORMULA: 1000*(1+T)= 6952.83 - (0.85 * 1000 * 0) = 6952.83 T = 0.213993 R = 5.95283 NLIC VAII QUALITY INCOME 12/30/89 TO NO. YEARS 10 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/89 1000 5.422388 184.4206 FEE 12/31/90 0 5.71669 0 FEE 12/31/91 0 6.683856 0 FEE 12/31/92 0 7.140105 0 FEE 12/31/93 0 7.959681 0 FEE 12/31/94 0 7.314494 0 FEE 12/31/95 0 8.996071 0 FEE 12/31/96 0 9.012987 0 FEE 12/31/97 0 9.8804 0 FEE 12/31/98 0 10.59313 0 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 184.4206 1844.206 10 FORMULA: 1000*(1+T)= 1844.206 - (0.85 * 1000 * 0) = 1844.206 T = 0.063117 R = 0.844206 NLIC VAII STRATEGIST 12/30/89 TO NO. YEARS 10 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/89 1000 3.360562 297.5693 FEE 12/31/90 0 3.36683 0 FEE 12/31/91 0 4.260486 0 FEE 12/31/92 0 4.507529 0 FEE 12/31/93 0 4.909342 0 FEE 12/31/94 0 5.038835 0 FEE 12/31/95 0 5.43387 0 FEE 12/31/96 0 6.166024 0 FEE 12/31/97 0 6.91794 0 FEE 12/31/98 0 8.637208 0 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 297.5693 2975.693 10 FORMULA: 1000*(1+T)= 2975.693 - (0.85 * 1000 * 0) = 2975.693 T = 0.115216 R = 1.975693 NLIC VAII DIVIDEND GROWTH 03/01/90 TO NO. YEARS 9.83436 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES - INIT DEPOSIT 03/01/90 1000 3.421456 292.2732 1 FEE 03/01/91 0 3.522859 0 0.06 2 FEE 03/01/92 0 3.952604 0 0.05 3 FEE 03/01/93 0 4.341348 0 0.05 4 03/01/94 0 4.669664 0 0.04 5 03/01/95 0 4.808548 0 0.03 6 03/01/96 0 6.444548 0 0.02 7 03/01/97 0 7.710324 0 0 8 03/01/98 0 9.786353 0 0 9 03/01/99 0 10.15988 0 0 10 12/31/99 0 10 0 0 11 N/A 0 N/A 0 0 12 N/A 0 N/A 0 0 13 N/A 0 N/A 0 0 14 FEE N/A 0 N/A 0 0 15 FEE N/A 0 N/A 0 0 RESULTING VALUE 12/31/99 10 292.2732 2922.732 9.83436 FORMULA: 1000*(1+T)= 2922.732 = 2922.732 T = 0.115227 R = 1.922732 NLIC VAII UTILITIES 03/01/90 TO NO. YEARS 9.83436 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES - INIT DEPOSIT 03/01/90 1000 3.082022 324.4623 1 FEE 03/01/91 0 3.288945 0 0.06 2 FEE 03/01/92 0 3.651659 0 0.05 3 FEE 03/01/93 0 4.526527 0 0.05 4 03/01/94 0 4.564409 0 0.04 5 03/01/95 0 4.483748 0 0.03 6 03/01/96 0 5.511244 0 0.02 7 03/01/97 0 5.926628 0 0 8 03/01/98 0 7.570309 0 0 9 03/01/99 0 8.664296 0 0 10 12/31/99 0 10 0 0 11 N/A 0 N/A 0 0 12 N/A 0 N/A 0 0 13 N/A 0 N/A 0 0 14 FEE N/A 0 N/A 0 0 15 FEE N/A 0 N/A 0 0 RESULTING VALUE 12/31/99 10 324.4623 3244.623 9.83436 FORMULA: 1000*(1+T)= 3244.623 = 3244.623 T = 0.127139 R = 2.244623 NLIC VAII EUROPEAN GROWTH 03/01/91 TO NO. YEARS 8.835044 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES - INIT DEPOSIT 03/01/91 1000 2.303021 434.2124 1 FEE 03/01/92 0 2.373605 0 0.06 2 FEE 03/01/93 0 2.474512 0 0.05 3 FEE 03/01/94 0 3.403191 0 0.05 4 03/01/95 0 3.608588 0 0.04 5 03/01/96 0 4.591504 0 0.03 6 03/01/97 0 5.626067 0 0.02 7 03/01/98 0 7.248539 0 0 8 03/01/99 0 7.714787 0 0 9 12/31/99 0 10 0 0 10 N/A 0 N/A 0 0 11 N/A 0 N/A 0 0 12 N/A 0 N/A 0 0 13 N/A 0 N/A 0 0 14 FEE N/A 0 N/A 0 0 15 FEE N/A 0 N/A 0 0 RESULTING VALUE 12/31/99 10 434.2124 4342.124 8.835044 FORMULA: 1000*(1+T)= 4342.124 = 4342.124 T = 0.180806 R = 3.342124 NLIC VAII CAPITAL GROWTH 03/01/91 TO NO. YEARS 8.835044 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES - INIT DEPOSIT 03/01/91 1000 3.192763 313.2083 1 FEE 03/01/92 0 3.876597 0 0.06 2 FEE 03/01/93 0 3.781572 0 0.05 3 FEE 03/01/94 0 3.750293 0 0.05 4 03/01/95 0 3.880011 0 0.04 5 03/01/96 0 5.025342 0 0.03 6 03/01/97 0 5.392023 0 0.02 7 03/01/98 0 6.96641 0 0 8 03/01/99 0 7.5499 0 0 9 12/31/99 0 10 0 0 10 N/A 0 N/A 0 0 11 N/A 0 N/A 0 0 12 N/A 0 N/A 0 0 13 N/A 0 N/A 0 0 14 FEE N/A 0 N/A 0 0 15 FEE N/A 0 N/A 0 0 RESULTING VALUE 12/31/99 10 313.2083 3132.083 8.835044 FORMULA: 1000*(1+T)= 3132.083 = 3132.083 T = 0.137945 R = 2.132083 NLIC VAII PACIFIC GROWTH 02/22/94 TO NO. YEARS 5.853525 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES - INIT DEPOSIT 02/22/94 1000 11.39269 87.77557 1 FEE 02/22/95 0 9.82895 0 0.06 2 FEE 02/22/96 0 11.84974 0 0.05 3 FEE 02/22/97 0 11.34465 0 0.05 4 02/22/98 0 6.935174 0 0.04 5 02/22/99 0 5.877509 0 0.03 6 12/31/99 0 10 0 0.02 7 N/A 0 N/A 0 0 8 N/A 0 N/A 0 0 9 N/A 0 N/A 0 0 10 N/A 0 N/A 0 0 11 N/A 0 N/A 0 0 12 N/A 0 N/A 0 0 13 N/A 0 N/A 0 0 14 FEE N/A 0 N/A 0 0 15 FEE N/A 0 N/A 0 0 RESULTING VALUE 12/31/99 10 87.77557 877.7557 5.853525 FORMULA: 1000*(1+T)= 877.7557 = 860.7557 T = -0.02529 R = -0.13924 NLIC VAII GLOBAL DIVIDEND GROWTH 02/22/94 TO NO. YEARS 5.853525 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES - INIT DEPOSIT 02/22/94 1000 5.203155 192.1911 1 FEE 02/22/95 0 5.191095 0 0.06 2 FEE 02/22/96 0 6.388321 0 0.05 3 FEE 02/22/97 0 7.228117 0 0.05 4 02/22/98 0 8.302465 0 0.04 5 02/22/99 0 8.593527 0 0.03 6 12/31/99 0 10 0 0.02 7 N/A 0 N/A 0 0 8 N/A 0 N/A 0 0 9 N/A 0 N/A 0 0 10 N/A 0 N/A 0 0 11 N/A 0 N/A 0 0 12 N/A 0 N/A 0 0 13 N/A 0 N/A 0 0 14 FEE N/A 0 N/A 0 0 15 FEE N/A 0 N/A 0 0 RESULTING VALUE 12/31/99 10 192.1911 1921.911 5.853525 FORMULA: 1000*(1+T)= 1921.911 = 1904.911 T = 0.116382 R = 0.904911 NLIC VAII CAPITAL APPRECIATION 01/21/97 TO NO. YEARS 2.940452 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES - INIT DEPOSIT 01/21/97 1000 10 100 1 FEE 01/21/98 0 10.95123 0 0.06 2 FEE 01/21/99 0 10.56254 0 0.05 3 FEE 12/31/99 0 10.87141 0 0.05 4 N/A 0 N/A 0 0.04 5 N/A 0 N/A 0 0.03 6 N/A 0 N/A 0 0.02 7 N/A 0 N/A 0 0 8 N/A 0 N/A 0 0 9 N/A 0 N/A 0 0 10 N/A 0 N/A 0 0 11 N/A 0 N/A 0 0 12 N/A 0 N/A 0 0 13 N/A 0 N/A 0 0 14 FEE N/A 0 N/A 0 0 15 FEE N/A 0 N/A 0 0 RESULTING VALUE 12/31/99 10.87141 100 1087.141 2.940452 FORMULA: 1000*(1+T)= 1087.141 = 1044.641 T = 0.014963 R = 0.044641 NLIC VAII INCOME BUILDER 01/21/97 TO NO. YEARS 2.940452 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES - INIT DEPOSIT 01/21/97 1000 7.693837 129.9742 1 FEE 01/21/98 0 9.274021 0 0.06 2 FEE 01/21/99 0 9.550645 0 0.05 3 FEE 12/31/99 0 10 0 0.05 4 N/A 0 N/A 0 0.04 5 N/A 0 N/A 0 0.03 6 N/A 0 N/A 0 0.02 7 N/A 0 N/A 0 0 8 N/A 0 N/A 0 0 9 N/A 0 N/A 0 0 10 N/A 0 N/A 0 0 11 N/A 0 N/A 0 0 12 N/A 0 N/A 0 0 13 N/A 0 N/A 0 0 14 FEE N/A 0 N/A 0 0 15 FEE N/A 0 N/A 0 0 RESULTING VALUE 12/31/99 10 129.9742 1299.742 2.940452 FORMULA: 1000*(1+T)= 1299.742 = 1257.242 T = 0.080963 R = 0.257242 NLIC VAII EQUITY GROWTH 01/02/97 TO NO. YEARS 2.992471 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES - INIT DEPOSIT 01/02/97 1000 4.704345 212.5695 1 FEE 01/02/98 0 6.160831 0 0.06 2 FEE 01/02/99 0 7.234495 0 0.05 3 FEE 12/31/99 0 10 0 0.05 4 N/A 0 N/A 0 0.04 5 N/A 0 N/A 0 0.03 6 N/A 0 N/A 0 0.02 7 N/A 0 N/A 0 0 8 N/A 0 N/A 0 0 9 N/A 0 N/A 0 0 10 N/A 0 N/A 0 0 11 N/A 0 N/A 0 0 12 N/A 0 N/A 0 0 13 N/A 0 N/A 0 0 14 FEE N/A 0 N/A 0 0 15 FEE N/A 0 N/A 0 0 RESULTING VALUE 12/31/99 10 212.5695 2125.695 2.992471 FORMULA: 1000*(1+T)= 2125.695 = 2083.195 T = 0.27794 R = 1.083195 NLIC VAII INTERNATIONAL MAGNUM 01/02/97 TO NO. YEARS 2.992471 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES - INIT DEPOSIT 01/02/97 1000 7.138321 140.089 1 FEE 01/02/98 0 7.586769 0 0.06 2 FEE 01/02/99 0 8.211229 0 0.05 3 FEE 12/31/99 0 10 0 0.05 4 N/A 0 N/A 0 0.04 5 N/A 0 N/A 0 0.03 6 N/A 0 N/A 0 0.02 7 N/A 0 N/A 0 0 8 N/A 0 N/A 0 0 9 N/A 0 N/A 0 0 10 N/A 0 N/A 0 0 11 N/A 0 N/A 0 0 12 N/A 0 N/A 0 0 13 N/A 0 N/A 0 0 14 FEE N/A 0 N/A 0 0 15 FEE N/A 0 N/A 0 0 RESULTING VALUE 12/31/99 10 140.089 1400.89 2.992471 FORMULA: 1000*(1+T)= 1400.89 = 1358.39 T = 0.107779 R = 0.35839 NLIC VAII EMERGING MARKETS 10/01/96 TO NO. YEARS 3.247091 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES - INIT DEPOSIT 10/01/96 1000 7.251586 137.9009 1 FEE 10/01/97 0 8.642599 0 0.06 2 FEE 10/01/98 0 4.400484 0 0.05 3 FEE 10/01/99 0 6.7059 0 0.05 4 12/31/99 0 10 0 0.04 5 N/A 0 N/A 0 0.03 6 N/A 0 N/A 0 0.02 7 N/A 0 N/A 0 0 8 N/A 0 N/A 0 0 9 N/A 0 N/A 0 0 10 N/A 0 N/A 0 0 11 N/A 0 N/A 0 0 12 N/A 0 N/A 0 0 13 N/A 0 N/A 0 0 14 FEE N/A 0 N/A 0 0 15 FEE N/A 0 N/A 0 0 RESULTING VALUE 12/31/99 10 137.9009 1379.009 3.247091 FORMULA: 1000*(1+T)= 1379.009 = 1345.009 T = 0.095578 R = 0.345009 NLIC VAII EMERGING GROWTH 07/03/95 TO NO. YEARS 4.495551 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES - INIT DEPOSIT 07/03/95 1000 5.558229 179.9134 1 FEE 07/03/96 0 7.528935 0 0.06 2 FEE 07/03/97 0 8.228578 0 0.05 3 FEE 07/03/98 0 10.7807 0 0.05 4 07/03/99 0 14.89841 0 0.04 5 12/31/99 0 24.19191 0 0.03 6 N/A 0 N/A 0 0.02 7 N/A 0 N/A 0 0 8 N/A 0 N/A 0 0 9 N/A 0 N/A 0 0 10 N/A 0 N/A 0 0 11 N/A 0 N/A 0 0 12 N/A 0 N/A 0 0 13 N/A 0 N/A 0 0 14 FEE N/A 0 N/A 0 0 15 FEE N/A 0 N/A 0 0 RESULTING VALUE 12/31/99 24.19191 179.9134 4352.448 4.495551 FORMULA: 1000*(1+T)= 4352.448 = 4326.948 T = 0.385204 R = 3.326948 NLIC VAII REAL ESTATE 03/04/97 TO NO. YEARS 2.825462 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES - INIT DEPOSIT 03/04/97 1000 10.26541 97.41455 1 FEE 03/04/98 0 11.69795 0 0.06 2 FEE 03/04/99 0 9.907322 0 0.05 3 FEE 12/31/99 0 10 0 0.05 4 N/A 0 N/A 0 0.04 5 N/A 0 N/A 0 0.03 6 N/A 0 N/A 0 0.02 7 N/A 0 N/A 0 0 8 N/A 0 N/A 0 0 9 N/A 0 N/A 0 0 10 N/A 0 N/A 0 0 11 N/A 0 N/A 0 0 12 N/A 0 N/A 0 0 13 N/A 0 N/A 0 0 14 FEE N/A 0 N/A 0 0 15 FEE N/A 0 N/A 0 0 RESULTING VALUE 12/31/99 10 97.41455 974.1455 2.825462 FORMULA: 1000*(1+T)= 974.1455 = 931.6455 T = -0.02475 R = -0.06835 NLIC VAII COMPETITIVE EDGE 05/18/98 TO NO. YEARS 1.620808 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES - INIT DEPOSIT 05/18/98 1000 8.262886 121.0231 1 FEE 05/18/99 0 8.364128 0 0.06 2 FEE 12/31/99 0 10 0 0.05 3 FEE N/A 0 N/A 0 0.05 4 N/A 0 N/A 0 0.04 5 N/A 0 N/A 0 0.03 6 N/A 0 N/A 0 0.02 7 N/A 0 N/A 0 0 8 N/A 0 N/A 0 0 9 N/A 0 N/A 0 0 10 N/A 0 N/A 0 0 11 N/A 0 N/A 0 0 12 N/A 0 N/A 0 0 13 N/A 0 N/A 0 0 14 FEE N/A 0 N/A 0 0 15 FEE N/A 0 N/A 0 0 RESULTING VALUE 12/31/99 10 121.0231 1210.231 1.620808 FORMULA: 1000*(1+T)= 1210.231 = 1167.731 T = 0.100396 R = 0.167731 NLIC VAII S&P 500 INDEX 05/18/98 TO NO. YEARS 1.620808 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES - INIT DEPOSIT 05/18/98 1000 7.610709 131.3938 1 FEE 05/18/99 0 9.160729 0 0.06 2 FEE 12/31/99 0 10 0 0.05 3 FEE N/A 0 N/A 0 0.05 4 N/A 0 N/A 0 0.04 5 N/A 0 N/A 0 0.03 6 N/A 0 N/A 0 0.02 7 N/A 0 N/A 0 0 8 N/A 0 N/A 0 0 9 N/A 0 N/A 0 0 10 N/A 0 N/A 0 0 11 N/A 0 N/A 0 0 12 N/A 0 N/A 0 0 13 N/A 0 N/A 0 0 14 FEE N/A 0 N/A 0 0 15 FEE N/A 0 N/A 0 0 RESULTING VALUE 12/31/99 10 131.3938 1313.938 1.620808 FORMULA: 1000*(1+T)= 1313.938 = 1271.438 T = 0.159705 R = 0.271438 NLIC VAII AGGRESSIVE EQUITY 05/03/99 TO NO. YEARS 0.66256 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES - INIT DEPOSIT 05/03/99 1000 6.907141 144.7777 1 FEE 12/31/99 0 10 0 0.06 2 FEE N/A 0 N/A 0 0.05 3 FEE N/A 0 N/A 0 0.05 4 N/A 0 N/A 0 0.04 5 N/A 0 N/A 0 0.03 6 N/A 0 N/A 0 0.02 7 N/A 0 N/A 0 0 8 N/A 0 N/A 0 0 9 N/A 0 N/A 0 0 10 N/A 0 N/A 0 0 11 N/A 0 N/A 0 0 12 N/A 0 N/A 0 0 13 N/A 0 N/A 0 0 14 FEE N/A 0 N/A 0 0 15 FEE N/A 0 N/A 0 0 RESULTING VALUE 12/31/99 10 144.7777 1447.777 0.66256 FORMULA: 1000*(1+T)= 1447.777 = 1396.777 T = 0.655922 R = 0.396777 NLIC VAII SHORT TERM BOND 05/03/99 TO NO. YEARS 0.66256 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES - INIT DEPOSIT 05/03/99 1000 9.935313 100.6511 1 FEE 12/31/99 0 10 0 0.06 2 FEE N/A 0 N/A 0 0.05 3 FEE N/A 0 N/A 0 0.05 4 N/A 0 N/A 0 0.04 5 N/A 0 N/A 0 0.03 6 N/A 0 N/A 0 0.02 7 N/A 0 N/A 0 0 8 N/A 0 N/A 0 0 9 N/A 0 N/A 0 0 10 N/A 0 N/A 0 0 11 N/A 0 N/A 0 0 12 N/A 0 N/A 0 0 13 N/A 0 N/A 0 0 14 FEE N/A 0 N/A 0 0 15 FEE N/A 0 N/A 0 0 RESULTING VALUE 12/31/99 10 100.6511 1006.511 0.66256 FORMULA: 1000*(1+T)= 1006.511 = 955.5109 T = -0.06638 R = -0.04449 Alliance Premier Growth 07/14/99 TO NO. YEARS 0.465435 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES - INIT DEPOSIT 07/14/99 1000 8.897316 112.3934 1 FEE 12/31/99 0 10 0 0.06 2 FEE N/A 0 N/A 0 0.05 3 FEE N/A 0 N/A 0 0.05 4 N/A 0 N/A 0 0.04 5 N/A 0 N/A 0 0.03 6 N/A 0 N/A 0 0.02 7 N/A 0 N/A 0 0 8 N/A 0 N/A 0 0 9 N/A 0 N/A 0 0 10 N/A 0 N/A 0 0 11 N/A 0 N/A 0 0 12 N/A 0 N/A 0 0 13 N/A 0 N/A 0 0 14 FEE N/A 0 N/A 0 0 15 FEE N/A 0 N/A 0 0 RESULTING VALUE 12/31/99 10 112.3934 1123.934 0.465435 FORMULA: 1000*(1+T)= 1123.934 = 1072.934 T = 0.163288 R = 0.072934 Alliance Growth 09/15/94 TO NO. YEARS 5.292266 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES - INIT DEPOSIT 09/15/94 1000 2.607539 383.5034 1 FEE 09/15/95 0 3.511686 0 0.06 2 FEE 09/15/96 0 4.090311 0 0.05 3 FEE 09/15/97 0 5.581198 0 0.05 4 09/15/98 0 5.884525 0 0.04 5 09/15/99 0 8.15062 0 0.03 6 12/31/99 0 10 0 0.02 7 N/A 0 N/A 0 0 8 N/A 0 N/A 0 0 9 N/A 0 N/A 0 0 10 N/A 0 N/A 0 0 11 N/A 0 N/A 0 0 12 N/A 0 N/A 0 0 13 N/A 0 N/A 0 0 14 FEE N/A 0 N/A 0 0 15 FEE N/A 0 N/A 0 0 RESULTING VALUE 12/31/99 10 383.5034 3835.034 5.292266 FORMULA: 1000*(1+T)= 3835.034 = 3818.034 T = 0.288076 R = 2.818034 Alliance Growth and Income 01/14/91 TO NO. YEARS 8.960986 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES - INIT DEPOSIT 01/14/91 1000 3.105882 321.9697 1 FEE 01/14/92 0 3.173224 0 0.06 2 FEE 01/14/93 0 3.379247 0 0.05 3 FEE 01/14/94 0 3.724153 0 0.05 4 01/14/95 0 3.661297 0 0.04 5 01/14/96 0 4.75674 0 0.03 6 01/14/97 0 6.148531 0 0.02 7 01/14/98 0 7.45466 0 0 8 01/14/99 0 8.959047 0 0 9 12/31/99 0 10 0 0 10 N/A 0 N/A 0 0 11 N/A 0 N/A 0 0 12 N/A 0 N/A 0 0 13 N/A 0 N/A 0 0 14 FEE N/A 0 N/A 0 0 15 FEE N/A 0 N/A 0 0 RESULTING VALUE 12/31/99 10 321.9697 3219.697 8.960986 FORMULA: 1000*(1+T)= 3219.697 = 3219.697 T = 0.139383 R = 2.219697 Aim Cap App 05/05/93 TO NO. YEARS 6.655715 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES - INIT DEPOSIT 05/05/93 1000 2.943899 339.6855 1 FEE 05/05/94 0 3.473488 0 0.06 2 FEE 05/05/95 0 3.874886 0 0.05 3 FEE 05/05/96 0 5.246309 0 0.05 4 05/05/97 0 5.503351 0 0.04 5 05/05/98 0 6.950632 0 0.03 6 05/05/99 0 7.198017 0 0.02 7 12/31/99 0 10 0 0 8 N/A 0 N/A 0 0 9 N/A 0 N/A 0 0 10 N/A 0 N/A 0 0 11 N/A 0 N/A 0 0 12 N/A 0 N/A 0 0 13 N/A 0 N/A 0 0 14 FEE N/A 0 N/A 0 0 15 FEE N/A 0 N/A 0 0 RESULTING VALUE 12/31/99 10 339.6855 3396.855 6.655715 FORMULA: 1000*(1+T)= 3396.855 = 3396.855 T = 0.201691 R = 2.396855 Aim Growth 05/05/93 TO NO. YEARS 6.655715 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES - INIT DEPOSIT 05/05/93 1000 2.9685 336.8705 1 FEE 05/05/94 0 3.120758 0 0.06 2 FEE 05/05/95 0 3.490607 0 0.05 3 FEE 05/05/96 0 4.410503 0 0.05 4 05/05/97 0 5.196157 0 0.04 5 05/05/98 0 7.000663 0 0.03 6 05/05/99 0 7.995896 0 0.02 7 12/31/99 0 10 0 0 8 N/A 0 N/A 0 0 9 N/A 0 N/A 0 0 10 N/A 0 N/A 0 0 11 N/A 0 N/A 0 0 12 N/A 0 N/A 0 0 13 N/A 0 N/A 0 0 14 FEE N/A 0 N/A 0 0 15 FEE N/A 0 N/A 0 0 RESULTING VALUE 12/31/99 10 336.8705 3368.705 6.655715 FORMULA: 1000*(1+T)= 3368.705 = 3368.705 T = 0.200189 R = 2.368705 Aim Value 05/05/93 TO NO. YEARS 6.655715 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES - INIT DEPOSIT 05/05/93 1000 2.886151 346.4822 1 FEE 05/05/94 0 3.35508 0 0.06 2 FEE 05/05/95 0 3.79554 0 0.05 3 FEE 05/05/96 0 4.575624 0 0.05 4 05/05/97 0 5.508646 0 0.04 5 05/05/98 0 7.089681 0 0.03 6 05/05/99 0 8.488974 0 0.02 7 12/31/99 0 10 0 0 8 N/A 0 N/A 0 0 9 N/A 0 N/A 0 0 10 N/A 0 N/A 0 0 11 N/A 0 N/A 0 0 12 N/A 0 N/A 0 0 13 N/A 0 N/A 0 0 14 FEE N/A 0 N/A 0 0 15 FEE N/A 0 N/A 0 0 RESULTING VALUE 12/31/99 10 346.4822 3464.822 6.655715 FORMULA: 1000*(1+T)= 3464.822 = 3464.822 T = 0.205273 R = 2.464822 Putnam International Growth 01/02/97 TO NO. YEARS 2.992471 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES - INIT DEPOSIT 01/02/97 1000 4.736101 211.1442 1 FEE 01/02/98 0 5.446386 0 0.06 2 FEE 01/02/99 0 6.333368 0 0.05 3 FEE 12/31/99 0 10 0 0.05 4 N/A 0 N/A 0 0.04 5 N/A 0 N/A 0 0.03 6 N/A 0 N/A 0 0.02 7 N/A 0 N/A 0 0 8 N/A 0 N/A 0 0 9 N/A 0 N/A 0 0 10 N/A 0 N/A 0 0 11 N/A 0 N/A 0 0 12 N/A 0 N/A 0 0 13 N/A 0 N/A 0 0 14 FEE N/A 0 N/A 0 0 15 FEE N/A 0 N/A 0 0 RESULTING VALUE 12/31/99 10 211.1442 2111.442 2.992471 FORMULA: 1000*(1+T)= 2111.442 = 2068.942 T = 0.275012 R = 1.068942 Putnam Voyager 12/30/89 TO NO. YEARS 10 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/89 1000 1.549706 645.2836 FEE 12/31/90 0 1.495642 0 FEE 12/31/91 0 2.152468 0 FEE 12/31/92 0 2.340089 0 FEE 12/31/93 0 2.736351 0 FEE 12/31/94 0 2.723599 0 FEE 12/31/95 0 3.77433 0 FEE 12/31/96 0 4.200343 0 FEE 12/31/97 0 5.234983 0 FEE 12/31/98 0 6.414311 0 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 645.2836 6452.836 10 FORMULA: 1000*(1+T)= 6452.836 - (0.85 * 1000 * 0) = 6452.836 T = 0.204967 R = 5.452836 Putnam Growth & Income 12/30/89 TO NO. YEARS 10 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/89 1000 3.132603 319.2233 FEE 12/31/90 0 3.146496 0 FEE 12/31/91 0 3.690022 0 FEE 12/31/92 0 3.989614 0 FEE 12/31/93 0 4.490887 0 FEE 12/31/94 0 4.439453 0 FEE 12/31/95 0 5.979007 0 FEE 12/31/96 0 7.180996 0 FEE 12/31/97 0 8.78246 0 FEE 12/31/98 0 9.989813 0 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 319.2233 3192.233 10 FORMULA: 1000*(1+T)= 3192.233 - (0.85 * 1000 * 0) = 3192.233 T = 0.123077 R = 2.192233 MSDW Mid Cap 01/02/97 TO NO. YEARS 2.992471 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES - INIT DEPOSIT 01/02/97 1000 5.429128 184.1916 1 FEE 01/02/98 0 7.514766 0 0.06 2 FEE 01/02/99 0 8.365055 0 0.05 3 FEE 12/31/99 0 10 0 0.05 4 N/A 0 N/A 0 0.04 5 N/A 0 N/A 0 0.03 6 N/A 0 N/A 0 0.02 7 N/A 0 N/A 0 0 8 N/A 0 N/A 0 0 9 N/A 0 N/A 0 0 10 N/A 0 N/A 0 0 11 N/A 0 N/A 0 0 12 N/A 0 N/A 0 0 13 N/A 0 N/A 0 0 14 FEE N/A 0 N/A 0 0 15 FEE N/A 0 N/A 0 0 RESULTING VALUE 12/31/99 10 184.1916 1841.916 2.992471 FORMULA: 1000*(1+T)= 1841.916 = 1799.416 T = 0.216908 R = 0.799416 Performance Death Benefit Standardized None Performance Death Benefit Non-Standardized None Performance Death Benefit Adjusted Historical - 1 Year VA 3 - Enhanced DB NLIC VAII MONEY MARKET 12/31/98 NO. YEARS 1 TO 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/98 1000 9.685956 103.2423 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 103.2423 1032.423 1 FORMULA: 1000*(1+T)= 1032.423 - (0.85 * 1000 * 0.05) = 989.9227 T = -0.01008 R = -0.01008 NLIC VAII HIGH YIELD 12/31/98 NO. YEARS 1 TO 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/98 1000 10.28607 97.21883 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 97.21883 972.1883 1 FORMULA: 1000*(1+T)= 972.1883 - (0.85 * 1000 * 0.05) = 929.6883 T = -0.07031 R = -0.07031 NLIC VAII EQUITY 12/31/98 NO. YEARS 1 TO 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/98 1000 6.399371 156.2653 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 156.2653 1562.653 1 FORMULA: 1000*(1+T)= 1562.653 - (0.85 * 1000 * 0.05) = 1520.153 T = 0.520153 R = 0.520153 NLIC VAII QUALITY INCOME 12/31/98 NO. YEARS 1 TO 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/98 1000 10.60691 94.27815 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 94.27815 942.7815 1 FORMULA: 1000*(1+T)= 942.7815 - (0.85 * 1000 * 0.05) = 900.2815 T = -0.09972 R = -0.09972 NLIC VAII STRATEGIST 12/31/98 NO. YEARS 1 TO 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/98 1000 8.648435 115.6279 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 115.6279 1156.279 1 FORMULA: 1000*(1+T)= 1156.279 - (0.85 * 1000 * 0.05) = 1113.779 T = 0.113779 R = 0.113779 NLIC VAII DIVIDEND GROWTH 12/31/98 NO. YEARS 1 TO 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/98 1000 10.39773 96.17488 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 96.17488 961.7488 1 FORMULA: 1000*(1+T)= 961.7488 - (0.85 * 1000 * 0.05) = 919.2488 T = -0.08075 R = -0.08075 NLIC VAII UTILITIES 12/31/98 NO. YEARS 1 TO 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/98 1000 9.004142 111.06 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 111.06 1110.6 1 FORMULA: 1000*(1+T)= 1110.6 - (0.85 * 1000 * 0.05) = 1068.1 T = 0.0681 R = 0.0681 NLIC VAII EUROPEAN GROWTH 12/31/98 NO. YEARS 1 TO 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/98 1000 7.86052 127.2181 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 127.2181 1272.181 1 FORMULA: 1000*(1+T)= 1272.181 - (0.85 * 1000 * 0.05) = 1229.681 T = 0.229681 R = 0.229681 NLIC VAII CAPITAL GROWTH 12/31/98 NO. YEARS 1 TO 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/98 1000 7.613847 131.3396 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 131.3396 1313.396 1 FORMULA: 1000*(1+T)= 1313.396 - (0.85 * 1000 * 0.05) = 1270.896 T = 0.270896 R = 0.270896 NLIC VAII PACIFIC GROWTH 12/31/98 NO. YEARS 1 TO 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/98 1000 6.110261 163.6591 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 163.6591 1636.591 1 FORMULA: 1000*(1+T)= 1636.591 - (0.85 * 1000 * 0.05) = 1594.091 T = 0.594091 R = 0.594091 NLIC VAII GLOBAL DIVIDEND GROWTH 12/31/98 NO. YEARS 1 TO 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/98 1000 8.851996 112.9689 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 112.9689 1129.689 1 FORMULA: 1000*(1+T)= 1129.689 - (0.85 * 1000 * 0.05) = 1087.189 T = 0.087189 R = 0.087189 NLIC VAII CAPITAL APPRECIATION 12/31/98 NO. YEARS 1 TO 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/98 1000 10.12384 98.77672 FEE 12/31/99 0 10.84099 0 RESULTING VALUE 12/31/99 10.84099 98.77672 1070.837 1 FORMULA: 1000*(1+T)= 1070.837 - (0.85 * 1000 * 0.05) = 1028.337 T = 0.028337 R = 0.028337 NLIC VAII INCOME BUILDER 12/31/98 NO. YEARS 1 TO 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/98 1000 9.479495 105.4909 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 105.4909 1054.909 1 FORMULA: 1000*(1+T)= 1054.909 - (0.85 * 1000 * 0.05) = 1012.409 T = 0.012409 R = 0.012409 NLIC VAII EQUITY GROWTH 12/31/98 NO. YEARS 1 TO 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/98 1000 7.277901 137.4023 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 137.4023 1374.023 1 FORMULA: 1000*(1+T)= 1374.023 - (0.85 * 1000 * 0.05) = 1331.523 T = 0.331523 R = 0.331523 NLIC VAII INTERNATIONAL MAGNUM 12/31/98 NO. YEARS 1 TO 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/98 1000 8.1067 123.3548 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 123.3548 1233.548 1 FORMULA: 1000*(1+T)= 1233.548 - (0.85 * 1000 * 0.05) = 1191.048 T = 0.191048 R = 0.191048 NLIC VAII EMERGING MARKETS 12/31/98 NO. YEARS 1 TO 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/98 1000 5.212526 191.8456 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 191.8456 1918.456 1 FORMULA: 1000*(1+T)= 1918.456 - (0.85 * 1000 * 0.05) = 1875.956 T = 0.875956 R = 0.875956 NLIC VAII EMERGING GROWTH 12/31/98 NO. YEARS 1 TO 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/98 1000 11.98498 83.43778 FEE 12/31/99 0 24.13563 0 RESULTING VALUE 12/31/99 24.13563 83.43778 2013.823 1 FORMULA: 1000*(1+T)= 2013.823 - (0.85 * 1000 * 0.05) = 1971.323 T = 0.971323 R = 0.971323 NLIC VAII REAL ESTATE 12/31/98 NO. YEARS 1 TO 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/98 1000 10.30072 97.08061 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 97.08061 970.8061 1 FORMULA: 1000*(1+T)= 970.8061 - (0.85 * 1000 * 0.05) = 928.3061 T = -0.07169 R = -0.07169 NLIC VAII COMPETITIVE EDGE 12/31/98 NO. YEARS 1 TO 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/98 1000 8.048594 124.2453 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 124.2453 1242.453 1 FORMULA: 1000*(1+T)= 1242.453 - (0.85 * 1000 * 0.05) = 1199.953 T = 0.199953 R = 0.199953 NLIC VAII S&P 500 INDEX 12/31/98 NO. YEARS 1 TO 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/98 1000 8.478882 117.9401 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 117.9401 1179.401 1 FORMULA: 1000*(1+T)= 1179.401 - (0.85 * 1000 * 0.05) = 1136.901 T = 0.136901 R = 0.136901 NLIC VAII AGGRESSIVE EQUITY 12/31/98 NO. YEARS 1 TO 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/98 1000 #VALUE! #VALUE! FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 #NAME? #VALUE! #NAME? 1 FORMULA: 1000*(1+T)= #NAME? - (0.85 * 1000 * 0.05) = #NAME? T = N/A R = N/A NLIC VAII SHORT TERM BOND 12/31/98 NO. YEARS 1 TO 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/98 1000 #VALUE! #VALUE! FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 #VALUE! #VALUE! 1 FORMULA: 1000*(1+T)= #VALUE! - (0.85 * 1000 * 0.05) = #VALUE! T = N/A R = N/A Alliance Premier Growth 12/31/98 NO. YEARS 1 TO 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/98 1000 #VALUE! #VALUE! FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 #VALUE! #VALUE! 1 FORMULA: 1000*(1+T)= #VALUE! - (0.85 * 1000 * 0.05) = #VALUE! T = N/A R = N/A Alliance Growth 12/31/98 NO. YEARS 1 TO 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/98 1000 7.54738 132.4963 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 132.4963 1324.963 1 FORMULA: 1000*(1+T)= 1324.963 - (0.85 * 1000 * 0.05) = 1282.463 T = 0.282463 R = 0.282463 Alliance Growth and Income 12/31/98 NO. YEARS 1 TO 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/98 1000 9.113047 109.7328 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 109.7328 1097.328 1 FORMULA: 1000*(1+T)= 1097.328 - (0.85 * 1000 * 0.05) = 1054.828 T = 0.054828 R = 0.054828 Aim Cap App 12/31/98 NO. YEARS 1 TO 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/98 1000 7.017924 142.4923 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 142.4923 1424.923 1 FORMULA: 1000*(1+T)= 1424.923 - (0.85 * 1000 * 0.05) = 1382.423 T = 0.382423 R = 0.382423 Aim Growth 12/31/98 NO. YEARS 1 TO 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/98 1000 7.504654 133.2506 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 133.2506 1332.506 1 FORMULA: 1000*(1+T)= 1332.506 - (0.85 * 1000 * 0.05) = 1290.006 T = 0.290006 R = 0.290006 Aim Value 12/31/98 NO. YEARS 1 TO 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/98 1000 7.813043 127.9911 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 127.9911 1279.911 1 FORMULA: 1000*(1+T)= 1279.911 - (0.85 * 1000 * 0.05) = 1237.411 T = 0.237411 R = 0.237411 Putnam International Growth 12/31/98 NO. YEARS 1 TO 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/98 1000 6.341568 157.6897 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 157.6897 1576.897 1 FORMULA: 1000*(1+T)= 1576.897 - (0.85 * 1000 * 0.05) = 1534.397 T = 0.534397 R = 0.534397 Putnam Voyager 12/31/98 NO. YEARS 1 TO 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/98 1000 6.422629 155.6995 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 155.6995 1556.995 1 FORMULA: 1000*(1+T)= 1556.995 - (0.85 * 1000 * 0.05) = 1514.495 T = 0.514495 R = 0.514495 Putnam Growth & Income 12/31/98 NO. YEARS 1 TO 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/98 1000 10.00282 99.97185 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 99.97185 999.7185 1 FORMULA: 1000*(1+T)= 999.7185 - (0.85 * 1000 * 0.05) = 957.2185 T = -0.04278 R = -0.04278 MSDW Mid Cap 12/31/98 NO. YEARS 1 TO 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/98 1000 8.415862 118.8232 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 118.8232 1188.232 1 FORMULA: 1000*(1+T)= 1188.232 - (0.85 * 1000 * 0.05) = 1145.732 T = 0.145732 R = 0.145732 Performance Death Benefit- 5 Year VA 3 - Enhanced DB NLIC VAII MONEY MARKET 12/30/94 TO NO. YEARS 5 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/94 1000 8.363963 119.5606 FEE 12/31/95 0 8.703516 0 FEE 12/31/96 0 9.013432 0 FEE 12/31/97 0 9.345934 0 FEE 12/31/98 0 9.685956 0 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 119.5606 1195.606 5 FORMULA: 1000*(1+T)= 1195.606 - (0.85 * 1000 * 0.02) = 1178.606 T = 0.033412 R = 0.178606 NLIC VAII HIGH YIELD 12/30/94 TO NO. YEARS 5 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/94 1000 8.098111 123.4856 FEE 12/31/95 0 9.152018 0 FEE 12/31/96 0 10.09716 0 FEE 12/31/97 0 11.12941 0 FEE 12/31/98 0 10.28607 0 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 123.4856 1234.856 5 FORMULA: 1000*(1+T)= 1234.856 - (0.85 * 1000 * 0.02) = 1217.856 T = 0.040206 R = 0.217856 NLIC VAII EQUITY 12/30/94 TO NO. YEARS 5 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/94 1000 2.338954 427.5415 FEE 12/31/95 0 3.321153 0 FEE 12/31/96 0 3.676595 0 FEE 12/31/97 0 4.978704 0 FEE 12/31/98 0 6.399371 0 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 427.5415 4275.415 5 FORMULA: 1000*(1+T)= 4275.415 - (0.85 * 1000 * 0.02) = 4258.415 T = 0.336133 R = 3.258415 NLIC VAII QUALITY INCOME 12/30/94 TO NO. YEARS 5 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/94 1000 7.362182 135.8293 FEE 12/31/95 0 9.043034 0 FEE 12/31/96 0 9.048202 0 FEE 12/31/97 0 9.906124 0 FEE 12/31/98 0 10.60691 0 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 135.8293 1358.293 5 FORMULA: 1000*(1+T)= 1358.293 - (0.85 * 1000 * 0.02) = 1341.293 T = 0.060485 R = 0.341293 NLIC VAII STRATEGIST 12/30/94 TO NO. YEARS 5 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/94 1000 5.071674 197.1736 FEE 12/31/95 0 5.462219 0 FEE 12/31/96 0 6.190099 0 FEE 12/31/97 0 6.935933 0 FEE 12/31/98 0 8.648435 0 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 197.1736 1971.736 5 FORMULA: 1000*(1+T)= 1971.736 - (0.85 * 1000 * 0.02) = 1954.736 T = 0.143451 R = 0.954736 NLIC VAII DIVIDEND GROWTH 12/30/94 TO NO. YEARS 5 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/94 1000 4.571145 218.7636 FEE 12/31/95 0 6.109197 0 FEE 12/31/96 0 7.461306 0 FEE 12/31/97 0 9.234313 0 FEE 12/31/98 0 10.39773 0 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 218.7636 2187.636 5 FORMULA: 1000*(1+T)= 2187.636 - (0.85 * 1000 * 0.02) = 2170.636 T = 0.167663 R = 1.170636 NLIC VAII UTILITIES 12/30/94 TO NO. YEARS 5 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/94 1000 4.345479 230.1242 FEE 12/31/95 0 5.504149 0 FEE 12/31/96 0 5.893607 0 FEE 12/31/97 0 7.383854 0 FEE 12/31/98 0 9.004142 0 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 230.1242 2301.242 5 FORMULA: 1000*(1+T)= 2301.242 - (0.85 * 1000 * 0.02) = 2284.242 T = 0.179637 R = 1.284242 NLIC VAII EUROPEAN GROWTH 12/30/94 TO NO. YEARS 5 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/94 1000 3.546174 281.9941 FEE 12/31/95 0 4.393116 0 FEE 12/31/96 0 5.626431 0 FEE 12/31/97 0 6.435444 0 FEE 12/31/98 0 7.86052 0 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 281.9941 2819.941 5 FORMULA: 1000*(1+T)= 2819.941 - (0.85 * 1000 * 0.02) = 2802.941 T = 0.228918 R = 1.802941 NLIC VAII CAPITAL GROWTH 12/30/94 TO NO. YEARS 5 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/94 1000 3.639029 274.7986 FEE 12/31/95 0 4.78952 0 FEE 12/31/96 0 5.263668 0 FEE 12/31/97 0 6.459155 0 FEE 12/31/98 0 7.613847 0 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 274.7986 2747.986 5 FORMULA: 1000*(1+T)= 2747.986 - (0.85 * 1000 * 0.02) = 2730.986 T = 0.222542 R = 1.730986 NLIC VAII PACIFIC GROWTH 12/30/94 TO NO. YEARS 5 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/94 1000 10.47016 95.50957 FEE 12/31/95 0 11.01589 0 FEE 12/31/96 0 11.27509 0 FEE 12/31/97 0 6.921091 0 FEE 12/31/98 0 6.110261 0 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 95.50957 955.0957 5 FORMULA: 1000*(1+T)= 955.0957 - (0.85 * 1000 * 0.02) = 938.0957 T = -0.0127 R = -0.0619 NLIC VAII GLOBAL DIVIDEND GROWTH 12/30/94 TO NO. YEARS 5 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/94 1000 5.182191 192.9686 FEE 12/31/95 0 6.24229 0 FEE 12/31/96 0 7.23176 0 FEE 12/31/97 0 7.983406 0 FEE 12/31/98 0 8.851996 0 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 192.9686 1929.686 5 FORMULA: 1000*(1+T)= 1929.686 - (0.85 * 1000 * 0.02) = 1912.686 T = 0.138489 R = 0.912686 NLIC VAII CAPITAL APPRECIATION 12/30/94 TO NO. YEARS 5 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/94 1000 #VALUE! #VALUE! FEE 12/31/95 0 #VALUE! #VALUE! FEE 12/31/96 0 #VALUE! #VALUE! FEE 12/31/97 0 11.16327 0 FEE 12/31/98 0 10.12384 0 FEE 12/31/99 0 10.84099 0 RESULTING VALUE 12/31/99 10.84099 #VALUE! #VALUE! 5 FORMULA: 1000*(1+T)= #VALUE! - (0.85 * 1000 * 0.02) = #VALUE! T = N/A R = N/A NLIC VAII INCOME BUILDER 12/30/94 TO NO. YEARS 5 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/94 1000 #VALUE! #VALUE! FEE 12/31/95 0 #VALUE! #VALUE! FEE 12/31/96 0 #VALUE! #VALUE! FEE 12/31/97 0 9.321229 0 FEE 12/31/98 0 9.479495 0 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 #VALUE! #VALUE! 5 FORMULA: 1000*(1+T)= #VALUE! - (0.85 * 1000 * 0.02) = #VALUE! T = N/A R = N/A NLIC VAII EQUITY GROWTH 12/30/94 TO NO. YEARS 5 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/94 1000 #VALUE! #VALUE! FEE 12/31/95 0 #VALUE! #VALUE! FEE 12/31/96 0 #VALUE! #VALUE! FEE 12/31/97 0 6.191889 0 FEE 12/31/98 0 7.277901 0 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 #VALUE! #VALUE! 5 FORMULA: 1000*(1+T)= #VALUE! - (0.85 * 1000 * 0.02) = #VALUE! T = N/A R = N/A NLIC VAII INTERNATIONAL MAGNUM 12/30/94 TO NO. YEARS 5 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/94 1000 #VALUE! #VALUE! FEE 12/31/95 0 #VALUE! #VALUE! FEE 12/31/96 0 #VALUE! #VALUE! FEE 12/31/97 0 7.577862 0 FEE 12/31/98 0 8.1067 0 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 #VALUE! #VALUE! 5 FORMULA: 1000*(1+T)= #VALUE! - (0.85 * 1000 * 0.02) = #VALUE! T = N/A R = N/A NLIC VAII EMERGING MARKETS 12/30/94 TO NO. YEARS 5 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/94 1000 #VALUE! #VALUE! FEE 12/31/95 0 #VALUE! #VALUE! FEE 12/31/96 0 7.095871 0 FEE 12/31/97 0 7.013146 0 FEE 12/31/98 0 5.212526 0 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 #VALUE! #VALUE! 5 FORMULA: 1000*(1+T)= #VALUE! - (0.85 * 1000 * 0.02) = #VALUE! T = N/A R = N/A NLIC VAII EMERGING GROWTH 12/30/94 TO NO. YEARS 5 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/94 1000 #VALUE! #VALUE! FEE 12/31/95 0 6.484405 0 FEE 12/31/96 0 7.452153 0 FEE 12/31/97 0 8.842429 0 FEE 12/31/98 0 11.98498 0 FEE 12/31/99 0 24.13563 0 RESULTING VALUE 12/31/99 24.13563 #VALUE! #VALUE! 5 FORMULA: 1000*(1+T)= #VALUE! - (0.85 * 1000 * 0.02) = #VALUE! T = N/A R = N/A NLIC VAII REAL ESTATE 12/30/94 TO NO. YEARS 5 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/94 1000 #VALUE! #VALUE! FEE 12/31/95 0 #VALUE! #VALUE! FEE 12/31/96 0 #VALUE! #VALUE! FEE 12/31/97 0 12.00838 0 FEE 12/31/98 0 10.30072 0 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 #VALUE! #VALUE! 5 FORMULA: 1000*(1+T)= #VALUE! - (0.85 * 1000 * 0.02) = #VALUE! T = N/A R = N/A NLIC VAII COMPETITIVE EDGE 12/30/94 TO NO. YEARS 5 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/94 1000 #VALUE! #VALUE! FEE 12/31/95 0 #VALUE! #VALUE! FEE 12/31/96 0 #VALUE! #VALUE! FEE 12/31/97 0 #VALUE! #VALUE! FEE 12/31/98 0 8.048594 0 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 #VALUE! #VALUE! 5 FORMULA: 1000*(1+T)= #VALUE! - (0.85 * 1000 * 0.02) = #VALUE! T = N/A R = N/A NLIC VAII S&P 500 INDEX 12/30/94 TO NO. YEARS 5 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/94 1000 #VALUE! #VALUE! FEE 12/31/95 0 #VALUE! #VALUE! FEE 12/31/96 0 #VALUE! #VALUE! FEE 12/31/97 0 #VALUE! #VALUE! FEE 12/31/98 0 8.478882 0 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 #VALUE! #VALUE! 5 FORMULA: 1000*(1+T)= #VALUE! - (0.85 * 1000 * 0.02) = #VALUE! T = N/A R = N/A NLIC VAII AGGRESSIVE EQUITY 12/30/94 TO NO. YEARS 5 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/94 1000 #VALUE! #VALUE! FEE 12/31/95 0 #VALUE! #VALUE! FEE 12/31/96 0 #VALUE! #VALUE! FEE 12/31/97 0 #VALUE! #VALUE! FEE 12/31/98 0 #VALUE! #VALUE! FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 #VALUE! #VALUE! 5 FORMULA: 1000*(1+T)= #VALUE! - (0.85 * 1000 * 0.02) = #VALUE! T = N/A R = N/A NLIC VAII SHORT TERM BOND 12/30/94 TO NO. YEARS 5 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/94 1000 #VALUE! #VALUE! FEE 12/31/95 0 #VALUE! #VALUE! FEE 12/31/96 0 #VALUE! #VALUE! FEE 12/31/97 0 #VALUE! #VALUE! FEE 12/31/98 0 #VALUE! #VALUE! FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 #VALUE! #VALUE! 5 FORMULA: 1000*(1+T)= #VALUE! - (0.85 * 1000 * 0.02) = #VALUE! T = N/A R = N/A Alliance Premier Growth 12/30/94 TO NO. YEARS 5 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/94 1000 #VALUE! #VALUE! FEE 12/31/95 0 #VALUE! #VALUE! FEE 12/31/96 0 #VALUE! #VALUE! FEE 12/31/97 0 #VALUE! #VALUE! FEE 12/31/98 0 #VALUE! #VALUE! FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 #VALUE! #VALUE! 5 FORMULA: 1000*(1+T)= #VALUE! - (0.85 * 1000 * 0.02) = #VALUE! T = N/A R = N/A Alliance Growth 12/30/94 TO NO. YEARS 5 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/94 1000 2.752797 363.2669 FEE 12/31/95 0 3.668873 0 FEE 12/31/96 0 4.64481 0 FEE 12/31/97 0 5.950512 0 FEE 12/31/98 0 7.54738 0 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 363.2669 3632.669 5 FORMULA: 1000*(1+T)= 3632.669 - (0.85 * 1000 * 0.02) = 3615.669 T = 0.293117 R = 2.615669 Alliance Growth and Income 12/30/94 TO NO. YEARS 5 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/94 1000 3.68506 271.366 FEE 12/31/95 0 4.930771 0 FEE 12/31/96 0 6.028697 0 FEE 12/31/97 0 7.650684 0 FEE 12/31/98 0 9.113047 0 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 271.366 2713.66 5 FORMULA: 1000*(1+T)= 2713.66 - (0.85 * 1000 * 0.02) = 2696.66 T = 0.219454 R = 1.69666 Aim Cap App 12/30/94 TO NO. YEARS 5 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/94 1000 3.548928 281.7752 FEE 12/31/95 0 4.744896 0 FEE 12/31/96 0 5.496716 0 FEE 12/31/97 0 6.147403 0 FEE 12/31/98 0 7.017924 0 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 281.7752 2817.752 5 FORMULA: 1000*(1+T)= 2817.752 - (0.85 * 1000 * 0.02) = 2800.752 T = 0.228726 R = 1.800752 Aim Growth 12/30/94 TO NO. YEARS 5 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/94 1000 3.153257 317.1324 FEE 12/31/95 0 4.187367 0 FEE 12/31/96 0 4.871845 0 FEE 12/31/97 0 6.090078 0 FEE 12/31/98 0 7.504654 0 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 317.1324 3171.324 5 FORMULA: 1000*(1+T)= 3171.324 - (0.85 * 1000 * 0.02) = 3154.324 T = 0.258292 R = 2.154324 Aim Value 12/30/94 TO NO. YEARS 5 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/94 1000 3.393488 294.6821 FEE 12/31/95 0 4.555875 0 FEE 12/31/96 0 5.162932 0 FEE 12/31/97 0 6.292192 0 FEE 12/31/98 0 7.813043 0 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 294.6821 2946.821 5 FORMULA: 1000*(1+T)= 2946.821 - (0.85 * 1000 * 0.02) = 2929.821 T = 0.239847 R = 1.929821 Putnam International Growth 12/30/94 TO NO. YEARS 5 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/94 1000 #VALUE! #VALUE! FEE 12/31/95 0 #VALUE! #VALUE! FEE 12/31/96 0 #VALUE! #VALUE! FEE 12/31/97 0 5.432455 0 FEE 12/31/98 0 6.341568 0 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 #VALUE! #VALUE! 5 FORMULA: 1000*(1+T)= #VALUE! - (0.85 * 1000 * 0.02) = #VALUE! T = N/A R = N/A Putnam Voyager 12/30/94 TO NO. YEARS 5 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/94 1000 2.741342 364.7848 FEE 12/31/95 0 3.793988 0 FEE 12/31/96 0 4.216733 0 FEE 12/31/97 0 5.248587 0 FEE 12/31/98 0 6.422629 0 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 364.7848 3647.848 5 FORMULA: 1000*(1+T)= 3647.848 - (0.85 * 1000 * 0.02) = 3630.848 T = 0.294201 R = 2.630848 Putnam Growth & Income 12/30/94 TO NO. YEARS 5 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/94 1000 4.468389 223.7943 FEE 12/31/95 0 6.010169 0 FEE 12/31/96 0 7.20905 0 FEE 12/31/97 0 8.805326 0 FEE 12/31/98 0 10.00282 0 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 223.7943 2237.943 5 FORMULA: 1000*(1+T)= 2237.943 - (0.85 * 1000 * 0.02) = 2220.943 T = 0.173026 R = 1.220943 MSDW Mid Cap 12/30/94 TO NO. YEARS 5 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/94 1000 #VALUE! #VALUE! FEE 12/31/95 0 #VALUE! #VALUE! FEE 12/31/96 0 #VALUE! #VALUE! FEE 12/31/97 0 7.568979 0 FEE 12/31/98 0 8.415862 0 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 #VALUE! #VALUE! 5 FORMULA: 1000*(1+T)= #VALUE! - (0.85 * 1000 * 0.02) = #VALUE! T = N/A R = N/A Performance Death Benefit- 10 Years/Since Inception VA 3 - Enhanced DB NLIC VAII MONEY MARKET 12/30/89 TO NO. YEARS 10 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/89 1000 7.147156 139.9158 FEE 12/31/90 0 7.601185 0 FEE 12/31/91 0 7.920304 0 FEE 12/31/92 0 8.071986 0 FEE 12/31/93 0 8.17206 0 FEE 12/31/94 0 8.363963 0 FEE 12/31/95 0 8.703516 0 FEE 12/31/96 0 9.013432 0 FEE 12/31/97 0 9.345934 0 FEE 12/31/98 0 9.685956 0 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 139.9158 1399.158 10 FORMULA: 1000*(1+T)= 1399.158 - (0.85 * 1000 * 0) = 1399.158 T = 0.034157 R = 0.399158 NLIC VAII HIGH YIELD 12/30/89 TO NO. YEARS 10 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/89 1000 5.221788 191.5053 FEE 12/31/90 0 3.765568 0 FEE 12/31/91 0 5.88647 0 FEE 12/31/92 0 6.868867 0 FEE 12/31/93 0 8.404616 0 FEE 12/31/94 0 8.098111 0 FEE 12/31/95 0 9.152018 0 FEE 12/31/96 0 10.09716 0 FEE 12/31/97 0 11.12941 0 FEE 12/31/98 0 10.28607 0 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 191.5053 1915.053 10 FORMULA: 1000*(1+T)= 1915.053 - (0.85 * 1000 * 0) = 1915.053 T = 0.067132 R = 0.915053 NLIC VAII EQUITY 12/30/89 TO NO. YEARS 10 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/89 1000 1.457082 686.3033 FEE 12/31/90 0 1.383624 0 FEE 12/31/91 0 2.168314 0 FEE 12/31/92 0 2.139795 0 FEE 12/31/93 0 2.523914 0 FEE 12/31/94 0 2.338954 0 FEE 12/31/95 0 3.321153 0 FEE 12/31/96 0 3.676595 0 FEE 12/31/97 0 4.978704 0 FEE 12/31/98 0 6.399371 0 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 686.3033 6863.033 10 FORMULA: 1000*(1+T)= 6863.033 - (0.85 * 1000 * 0) = 6863.033 T = 0.212416 R = 5.863033 NLIC VAII QUALITY INCOME 12/30/89 TO NO. YEARS 10 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/89 1000 5.493365 182.0378 FEE 12/31/90 0 5.783954 0 FEE 12/31/91 0 6.75372 0 FEE 12/31/92 0 7.205366 0 FEE 12/31/93 0 8.022003 0 FEE 12/31/94 0 7.362182 0 FEE 12/31/95 0 9.043034 0 FEE 12/31/96 0 9.048202 0 FEE 12/31/97 0 9.906124 0 FEE 12/31/98 0 10.60691 0 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 182.0378 1820.378 10 FORMULA: 1000*(1+T)= 1820.378 - (0.85 * 1000 * 0) = 1820.378 T = 0.061735 R = 0.820378 NLIC VAII STRATEGIST 12/30/89 TO NO. YEARS 10 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/89 1000 3.404538 293.7256 FEE 12/31/90 0 3.406433 0 FEE 12/31/91 0 4.305005 0 FEE 12/31/92 0 4.548715 0 FEE 12/31/93 0 4.947764 0 FEE 12/31/94 0 5.071674 0 FEE 12/31/95 0 5.462219 0 FEE 12/31/96 0 6.190099 0 FEE 12/31/97 0 6.935933 0 FEE 12/31/98 0 8.648435 0 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 293.7256 2937.256 10 FORMULA: 1000*(1+T)= 2937.256 - (0.85 * 1000 * 0) = 2937.256 T = 0.113767 R = 1.937256 NLIC VAII DIVIDEND GROWTH 03/01/90 TO NO. YEARS 9.83436 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES - INIT DEPOSIT 03/01/90 1000 3.465458 288.5621 1 FEE 03/01/91 0 3.563532 0 0.06 2 FEE 03/01/92 0 3.993064 0 0.05 3 FEE 03/01/93 0 4.380074 0 0.05 4 03/01/94 0 4.705202 0 0.04 5 03/01/95 0 4.838849 0 0.03 6 03/01/96 0 6.476724 0 0.02 7 03/01/97 0 7.738811 0 0 8 03/01/98 0 9.809802 0 0 9 03/01/99 0 10.17092 0 0 10 12/31/99 0 10 0 0 11 N/A 0 N/A 0 0 12 N/A 0 N/A 0 0 13 N/A 0 N/A 0 0 14 FEE N/A 0 N/A 0 0 15 FEE N/A 0 N/A 0 0 RESULTING VALUE 12/31/99 10 288.5621 2885.621 9.83436 FORMULA: 1000*(1+T)= 2885.621 = 2885.621 T = 0.113779 R = 1.885621 NLIC VAII UTILITIES 03/01/90 TO NO. YEARS 9.83436 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES - INIT DEPOSIT 03/01/90 1000 3.121664 320.3419 1 FEE 03/01/91 0 3.326923 0 0.06 2 FEE 03/01/92 0 3.689043 0 0.05 3 FEE 03/01/93 0 4.566913 0 0.05 4 03/01/94 0 4.599152 0 0.04 5 03/01/95 0 4.512005 0 0.03 6 03/01/96 0 5.538759 0 0.02 7 03/01/97 0 5.948518 0 0 8 03/01/98 0 7.588438 0 0 9 03/01/99 0 8.673709 0 0 10 12/31/99 0 10 0 0 11 N/A 0 N/A 0 0 12 N/A 0 N/A 0 0 13 N/A 0 N/A 0 0 14 FEE N/A 0 N/A 0 0 15 FEE N/A 0 N/A 0 0 RESULTING VALUE 12/31/99 10 320.3419 3203.419 9.83436 FORMULA: 1000*(1+T)= 3203.419 = 3203.419 T = 0.125675 R = 2.203419 NLIC VAII EUROPEAN GROWTH 03/01/91 TO NO. YEARS 8.835044 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES - INIT DEPOSIT 03/01/91 1000 2.329609 429.2566 1 FEE 03/01/92 0 2.397898 0 0.06 2 FEE 03/01/93 0 2.496579 0 0.05 3 FEE 03/01/94 0 3.429083 0 0.05 4 03/01/95 0 3.63132 0 0.04 5 03/01/96 0 4.614415 0 0.03 6 03/01/97 0 5.646839 0 0.02 7 03/01/98 0 7.265885 0 0 8 03/01/99 0 7.72316 0 0 9 12/31/99 0 10 0 0 10 N/A 0 N/A 0 0 11 N/A 0 N/A 0 0 12 N/A 0 N/A 0 0 13 N/A 0 N/A 0 0 14 FEE N/A 0 N/A 0 0 15 FEE N/A 0 N/A 0 0 RESULTING VALUE 12/31/99 10 429.2566 4292.566 8.835044 FORMULA: 1000*(1+T)= 4292.566 = 4292.566 T = 0.179273 R = 3.292566 NLIC VAII CAPITAL GROWTH 03/01/91 TO NO. YEARS 8.835044 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES - INIT DEPOSIT 03/01/91 1000 3.22963 309.633 1 FEE 03/01/92 0 3.916284 0 0.06 2 FEE 03/01/93 0 3.815304 0 0.05 3 FEE 03/01/94 0 3.778833 0 0.05 4 03/01/95 0 3.904459 0 0.04 5 03/01/96 0 5.050428 0 0.03 6 03/01/97 0 5.411935 0 0.02 7 03/01/98 0 6.983087 0 0 8 03/01/99 0 7.558095 0 0 9 12/31/99 0 10 0 0 10 N/A 0 N/A 0 0 11 N/A 0 N/A 0 0 12 N/A 0 N/A 0 0 13 N/A 0 N/A 0 0 14 FEE N/A 0 N/A 0 0 15 FEE N/A 0 N/A 0 0 RESULTING VALUE 12/31/99 10 309.633 3096.33 8.835044 FORMULA: 1000*(1+T)= 3096.33 = 3096.33 T = 0.136467 R = 2.09633 NLIC VAII PACIFIC GROWTH 02/22/94 TO NO. YEARS 5.853525 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES - INIT DEPOSIT 02/22/94 1000 11.47977 87.10974 1 FEE 02/22/95 0 9.891203 0 0.06 2 FEE 02/22/96 0 11.90931 0 0.05 3 FEE 02/22/97 0 11.38689 0 0.05 4 02/22/98 0 6.951961 0 0.04 5 02/22/99 0 5.884027 0 0.03 6 12/31/99 0 10 0 0.02 7 N/A 0 N/A 0 0 8 N/A 0 N/A 0 0 9 N/A 0 N/A 0 0 10 N/A 0 N/A 0 0 11 N/A 0 N/A 0 0 12 N/A 0 N/A 0 0 13 N/A 0 N/A 0 0 14 FEE N/A 0 N/A 0 0 15 FEE N/A 0 N/A 0 0 RESULTING VALUE 12/31/99 10 87.10974 871.0974 5.853525 FORMULA: 1000*(1+T)= 871.0974 = 854.0974 T = -0.02658 R = -0.1459 NLIC VAII GLOBAL DIVIDEND GROWTH 02/22/94 TO NO. YEARS 5.853525 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES - INIT DEPOSIT 02/22/94 1000 5.242891 190.7345 1 FEE 02/22/95 0 5.223943 0 0.06 2 FEE 02/22/96 0 6.420402 0 0.05 3 FEE 02/22/97 0 7.255003 0 0.05 4 02/22/98 0 8.322558 0 0.04 5 02/22/99 0 8.603075 0 0.03 6 12/31/99 0 10 0 0.02 7 N/A 0 N/A 0 0 8 N/A 0 N/A 0 0 9 N/A 0 N/A 0 0 10 N/A 0 N/A 0 0 11 N/A 0 N/A 0 0 12 N/A 0 N/A 0 0 13 N/A 0 N/A 0 0 14 FEE N/A 0 N/A 0 0 15 FEE N/A 0 N/A 0 0 RESULTING VALUE 12/31/99 10 190.7345 1907.345 5.853525 FORMULA: 1000*(1+T)= 1907.345 = 1890.345 T = 0.114919 R = 0.890345 NLIC VAII CAPITAL APPRECIATION 01/21/97 TO NO. YEARS 2.940452 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES - INIT DEPOSIT 01/21/97 1000 10 100 1 FEE 01/21/98 0 10.937 0 0.06 2 FEE 01/21/99 0 10.5351 0 0.05 3 FEE 12/31/99 0 10.84099 0 0.05 4 N/A 0 N/A 0 0.04 5 N/A 0 N/A 0 0.03 6 N/A 0 N/A 0 0.02 7 N/A 0 N/A 0 0 8 N/A 0 N/A 0 0 9 N/A 0 N/A 0 0 10 N/A 0 N/A 0 0 11 N/A 0 N/A 0 0 12 N/A 0 N/A 0 0 13 N/A 0 N/A 0 0 14 FEE N/A 0 N/A 0 0 15 FEE N/A 0 N/A 0 0 RESULTING VALUE 12/31/99 10.84099 100 1084.099 2.940452 FORMULA: 1000*(1+T)= 1084.099 = 1041.599 T = 0.013957 R = 0.041599 NLIC VAII INCOME BUILDER 01/21/97 TO NO. YEARS 2.940452 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES - INIT DEPOSIT 01/21/97 1000 7.723311 129.4781 1 FEE 01/21/98 0 9.297465 0 0.06 2 FEE 01/21/99 0 9.562351 0 0.05 3 FEE 12/31/99 0 10 0 0.05 4 N/A 0 N/A 0 0.04 5 N/A 0 N/A 0 0.03 6 N/A 0 N/A 0 0.02 7 N/A 0 N/A 0 0 8 N/A 0 N/A 0 0 9 N/A 0 N/A 0 0 10 N/A 0 N/A 0 0 11 N/A 0 N/A 0 0 12 N/A 0 N/A 0 0 13 N/A 0 N/A 0 0 14 FEE N/A 0 N/A 0 0 15 FEE N/A 0 N/A 0 0 RESULTING VALUE 12/31/99 10 129.4781 1294.781 2.940452 FORMULA: 1000*(1+T)= 1294.781 = 1252.281 T = 0.07951 R = 0.252281 NLIC VAII EQUITY GROWTH 01/02/97 TO NO. YEARS 2.992471 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES - INIT DEPOSIT 01/02/97 1000 4.72267 211.7446 1 FEE 01/02/98 0 6.176806 0 0.06 2 FEE 01/02/99 0 7.243867 0 0.05 3 FEE 12/31/99 0 10 0 0.05 4 N/A 0 N/A 0 0.04 5 N/A 0 N/A 0 0.03 6 N/A 0 N/A 0 0.02 7 N/A 0 N/A 0 0 8 N/A 0 N/A 0 0 9 N/A 0 N/A 0 0 10 N/A 0 N/A 0 0 11 N/A 0 N/A 0 0 12 N/A 0 N/A 0 0 13 N/A 0 N/A 0 0 14 FEE N/A 0 N/A 0 0 15 FEE N/A 0 N/A 0 0 RESULTING VALUE 12/31/99 10 211.7446 2117.446 2.992471 FORMULA: 1000*(1+T)= 2117.446 = 2074.946 T = 0.276247 R = 1.074946 NLIC VAII INTERNATIONAL MAGNUM 01/02/97 TO NO. YEARS 2.992471 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES - INIT DEPOSIT 01/02/97 1000 7.166148 139.545 1 FEE 01/02/98 0 7.60645 0 0.06 2 FEE 01/02/99 0 8.221872 0 0.05 3 FEE 12/31/99 0 10 0 0.05 4 N/A 0 N/A 0 0.04 5 N/A 0 N/A 0 0.03 6 N/A 0 N/A 0 0.02 7 N/A 0 N/A 0 0 8 N/A 0 N/A 0 0 9 N/A 0 N/A 0 0 10 N/A 0 N/A 0 0 11 N/A 0 N/A 0 0 12 N/A 0 N/A 0 0 13 N/A 0 N/A 0 0 14 FEE N/A 0 N/A 0 0 15 FEE N/A 0 N/A 0 0 RESULTING VALUE 12/31/99 10 139.545 1395.45 2.992471 FORMULA: 1000*(1+T)= 1395.45 = 1352.95 T = 0.106294 R = 0.35295 NLIC VAII EMERGING MARKETS 10/01/96 TO NO. YEARS 3.247091 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES - INIT DEPOSIT 10/01/96 1000 7.282259 137.32 1 FEE 10/01/97 0 8.667894 0 0.06 2 FEE 10/01/98 0 4.407614 0 0.05 3 FEE 10/01/99 0 6.708058 0 0.05 4 12/31/99 0 10 0 0.04 5 N/A 0 N/A 0 0.03 6 N/A 0 N/A 0 0.02 7 N/A 0 N/A 0 0 8 N/A 0 N/A 0 0 9 N/A 0 N/A 0 0 10 N/A 0 N/A 0 0 11 N/A 0 N/A 0 0 12 N/A 0 N/A 0 0 13 N/A 0 N/A 0 0 14 FEE N/A 0 N/A 0 0 15 FEE N/A 0 N/A 0 0 RESULTING VALUE 12/31/99 10 137.32 1373.2 3.247091 FORMULA: 1000*(1+T)= 1373.2 = 1339.2 T = 0.094118 R = 0.3392 NLIC VAII EMERGING GROWTH 07/03/95 TO NO. YEARS 4.495551 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES - INIT DEPOSIT 07/03/95 1000 5.577796 179.2823 1 FEE 07/03/96 0 7.545606 0 0.06 2 FEE 07/03/97 0 8.236076 0 0.05 3 FEE 07/03/98 0 10.77655 0 0.05 4 07/03/99 0 14.87337 0 0.04 5 12/31/99 0 24.13563 0 0.03 6 N/A 0 N/A 0 0.02 7 N/A 0 N/A 0 0 8 N/A 0 N/A 0 0 9 N/A 0 N/A 0 0 10 N/A 0 N/A 0 0 11 N/A 0 N/A 0 0 12 N/A 0 N/A 0 0 13 N/A 0 N/A 0 0 14 FEE N/A 0 N/A 0 0 15 FEE N/A 0 N/A 0 0 RESULTING VALUE 12/31/99 24.13563 179.2823 4327.091 4.495551 FORMULA: 1000*(1+T)= 4327.091 = 4301.591 T = 0.383394 R = 3.301591 NLIC VAII REAL ESTATE 03/04/97 TO NO. YEARS 2.825462 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES - INIT DEPOSIT 03/04/97 1000 10.30321 97.05708 1 FEE 03/04/98 0 11.72579 0 0.06 2 FEE 03/04/99 0 9.917985 0 0.05 3 FEE 12/31/99 0 10 0 0.05 4 N/A 0 N/A 0 0.04 5 N/A 0 N/A 0 0.03 6 N/A 0 N/A 0 0.02 7 N/A 0 N/A 0 0 8 N/A 0 N/A 0 0 9 N/A 0 N/A 0 0 10 N/A 0 N/A 0 0 11 N/A 0 N/A 0 0 12 N/A 0 N/A 0 0 13 N/A 0 N/A 0 0 14 FEE N/A 0 N/A 0 0 15 FEE N/A 0 N/A 0 0 RESULTING VALUE 12/31/99 10 97.05708 970.5708 2.825462 FORMULA: 1000*(1+T)= 970.5708 = 928.0708 T = -0.02607 R = -0.07193 NLIC VAII COMPETITIVE EDGE 05/18/98 TO NO. YEARS 1.620808 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES - INIT DEPOSIT 05/18/98 1000 8.280313 120.7684 1 FEE 05/18/99 0 8.370888 0 0.06 2 FEE 12/31/99 0 10 0 0.05 3 FEE N/A 0 N/A 0 0.05 4 N/A 0 N/A 0 0.04 5 N/A 0 N/A 0 0.03 6 N/A 0 N/A 0 0.02 7 N/A 0 N/A 0 0 8 N/A 0 N/A 0 0 9 N/A 0 N/A 0 0 10 N/A 0 N/A 0 0 11 N/A 0 N/A 0 0 12 N/A 0 N/A 0 0 13 N/A 0 N/A 0 0 14 FEE N/A 0 N/A 0 0 15 FEE N/A 0 N/A 0 0 RESULTING VALUE 12/31/99 10 120.7684 1207.684 1.620808 FORMULA: 1000*(1+T)= 1207.684 = 1165.184 T = 0.098914 R = 0.165184 NLIC VAII S&P 500 INDEX 05/18/98 TO NO. YEARS 1.620808 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES - INIT DEPOSIT 05/18/98 1000 7.62676 131.1173 1 FEE 05/18/99 0 9.168138 0 0.06 2 FEE 12/31/99 0 10 0 0.05 3 FEE N/A 0 N/A 0 0.05 4 N/A 0 N/A 0 0.04 5 N/A 0 N/A 0 0.03 6 N/A 0 N/A 0 0.02 7 N/A 0 N/A 0 0 8 N/A 0 N/A 0 0 9 N/A 0 N/A 0 0 10 N/A 0 N/A 0 0 11 N/A 0 N/A 0 0 12 N/A 0 N/A 0 0 13 N/A 0 N/A 0 0 14 FEE N/A 0 N/A 0 0 15 FEE N/A 0 N/A 0 0 RESULTING VALUE 12/31/99 10 131.1173 1311.173 1.620808 FORMULA: 1000*(1+T)= 1311.173 = 1268.673 T = 0.158149 R = 0.268673 NLIC VAII AGGRESSIVE EQUITY 05/03/99 TO NO. YEARS 0.66256 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES - INIT DEPOSIT 05/03/99 1000 6.913085 144.6532 1 FEE 12/31/99 0 10 0 0.06 2 FEE N/A 0 N/A 0 0.05 3 FEE N/A 0 N/A 0 0.05 4 N/A 0 N/A 0 0.04 5 N/A 0 N/A 0 0.03 6 N/A 0 N/A 0 0.02 7 N/A 0 N/A 0 0 8 N/A 0 N/A 0 0 9 N/A 0 N/A 0 0 10 N/A 0 N/A 0 0 11 N/A 0 N/A 0 0 12 N/A 0 N/A 0 0 13 N/A 0 N/A 0 0 14 FEE N/A 0 N/A 0 0 15 FEE N/A 0 N/A 0 0 RESULTING VALUE 12/31/99 10 144.6532 1446.532 0.66256 FORMULA: 1000*(1+T)= 1446.532 = 1395.532 T = 0.653695 R = 0.395532 NLIC VAII SHORT TERM BOND 05/03/99 TO NO. YEARS 0.66256 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES - INIT DEPOSIT 05/03/99 1000 9.94388 100.5644 1 FEE 12/31/99 0 10 0 0.06 2 FEE N/A 0 N/A 0 0.05 3 FEE N/A 0 N/A 0 0.05 4 N/A 0 N/A 0 0.04 5 N/A 0 N/A 0 0.03 6 N/A 0 N/A 0 0.02 7 N/A 0 N/A 0 0 8 N/A 0 N/A 0 0 9 N/A 0 N/A 0 0 10 N/A 0 N/A 0 0 11 N/A 0 N/A 0 0 12 N/A 0 N/A 0 0 13 N/A 0 N/A 0 0 14 FEE N/A 0 N/A 0 0 15 FEE N/A 0 N/A 0 0 RESULTING VALUE 12/31/99 10 100.5644 1005.644 0.66256 FORMULA: 1000*(1+T)= 1005.644 = 954.6437 T = -0.06766 R = -0.04536 Alliance Premier Growth 07/14/99 TO NO. YEARS 0.465435 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES - INIT DEPOSIT 07/14/99 1000 8.902702 112.3255 1 FEE 12/31/99 0 10 0 0.06 2 FEE N/A 0 N/A 0 0.05 3 FEE N/A 0 N/A 0 0.05 4 N/A 0 N/A 0 0.04 5 N/A 0 N/A 0 0.03 6 N/A 0 N/A 0 0.02 7 N/A 0 N/A 0 0 8 N/A 0 N/A 0 0 9 N/A 0 N/A 0 0 10 N/A 0 N/A 0 0 11 N/A 0 N/A 0 0 12 N/A 0 N/A 0 0 13 N/A 0 N/A 0 0 14 FEE N/A 0 N/A 0 0 15 FEE N/A 0 N/A 0 0 RESULTING VALUE 12/31/99 10 112.3255 1123.255 0.465435 FORMULA: 1000*(1+T)= 1123.255 = 1072.255 T = 0.161705 R= 0.072255 Alliance Growth 09/15/94 TO NO. YEARS 5.292266 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES - INIT DEPOSIT 09/15/94 1000 2.625453 380.8866 1 FEE 09/15/95 0 2.752797 0 0.06 2 FEE 09/15/96 0 3.668873 0 0.05 3 FEE 09/15/97 0 4.64481 0 0.05 4 09/15/98 0 5.950512 0 0.04 5 09/15/99 0 7.54738 0 0.03 6 12/31/99 0 10 0 0.02 7 N/A 0 N/A 0 0 8 N/A 0 N/A 0 0 9 N/A 0 N/A 0 0 10 N/A 0 N/A 0 0 11 N/A 0 N/A 0 0 12 N/A 0 N/A 0 0 13 N/A 0 N/A 0 0 14 FEE N/A 0 N/A 0 0 15 FEE N/A 0 N/A 0 0 RESULTING VALUE 12/31/99 10 380.8866 3808.866 5.292266 FORMULA: 1000*(1+T)= 3808.866 = 3791.866 T = 0.286403 R = 2.791866 Alliance Growth and Income 01/14/91 TO NO. YEARS 8.960986 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES - INIT DEPOSIT 01/14/91 1000 3.142133 318.2551 1 FEE 01/14/92 0 3.206258 0 0.06 2 FEE 01/14/93 0 3.410009 0 0.05 3 FEE 01/14/94 0 3.753203 0 0.05 4 01/14/95 0 3.68506 0 0.04 5 01/14/96 0 4.930771 0 0.03 6 01/14/97 0 6.028697 0 0.02 7 01/14/98 0 7.650684 0 0 8 01/14/99 0 9.113047 0 0 9 12/31/99 0 10 0 0 10 N/A 0 N/A 0 0 11 N/A 0 N/A 0 0 12 N/A 0 N/A 0 0 13 N/A 0 N/A 0 0 14 FEE N/A 0 N/A 0 0 15 FEE N/A 0 N/A 0 0 RESULTING VALUE 12/31/99 10 318.2551 3182.551 8.960986 FORMULA: 1000*(1+T)= 3182.551 = 3182.551 T = 0.137908 R = 2.182551 Aim Cap App 05/05/93 TO NO. YEARS 6.655715 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES - INIT DEPOSIT 05/05/93 1000 2.969478 336.7596 1 FEE 05/05/94 0 3.499119 0 0.06 2 FEE 05/05/95 0 3.898408 0 0.05 3 FEE 05/05/96 0 5.271329 0 0.05 4 05/05/97 0 5.522381 0 0.04 5 05/05/98 0 6.965613 0 0.03 6 05/05/99 0 7.204166 0 0.02 7 12/31/99 0 10 0 0 8 N/A 0 N/A 0 0 9 N/A 0 N/A 0 0 10 N/A 0 N/A 0 0 11 N/A 0 N/A 0 0 12 N/A 0 N/A 0 0 13 N/A 0 N/A 0 0 14 FEE N/A 0 N/A 0 0 15 FEE N/A 0 N/A 0 0 RESULTING VALUE 12/31/99 10 336.7596 3367.596 6.655715 FORMULA: 1000*(1+T)= 3367.596 = 3367.596 T = 0.20013 R = 2.367596 Aim Growth 05/05/93 TO NO. YEARS 6.655715 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES - INIT DEPOSIT 05/05/93 1000 2.994287 333.9693 1 FEE 05/05/94 0 3.14378 0 0.06 2 FEE 05/05/95 0 3.511791 0 0.05 3 FEE 05/05/96 0 4.43153 0 0.05 4 05/05/97 0 5.214121 0 0.04 5 05/05/98 0 7.015749 0 0.03 6 05/05/99 0 8.00273 0 0.02 7 12/31/99 0 10 0 0 8 N/A 0 N/A 0 0 9 N/A 0 N/A 0 0 10 N/A 0 N/A 0 0 11 N/A 0 N/A 0 0 12 N/A 0 N/A 0 0 13 N/A 0 N/A 0 0 14 FEE N/A 0 N/A 0 0 15 FEE N/A 0 N/A 0 0 RESULTING VALUE 12/31/99 10 333.9693 3339.693 6.655715 FORMULA: 1000*(1+T)= 3339.693 = 3339.693 T = 0.19863 R = 2.339693 Aim Value 05/05/93 TO NO. YEARS 6.655715 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES - INIT DEPOSIT 05/05/93 1000 2.911222 343.4984 1 FEE 05/05/94 0 3.37983 0 0.06 2 FEE 05/05/95 0 3.818574 0 0.05 3 FEE 05/05/96 0 4.597437 0 0.05 4 05/05/97 0 5.527692 0 0.04 5 05/05/98 0 7.10496 0 0.03 6 05/05/99 0 8.496232 0 0.02 7 12/31/99 0 10 0 0 8 N/A 0 N/A 0 0 9 N/A 0 N/A 0 0 10 N/A 0 N/A 0 0 11 N/A 0 N/A 0 0 12 N/A 0 N/A 0 0 13 N/A 0 N/A 0 0 14 FEE N/A 0 N/A 0 0 15 FEE N/A 0 N/A 0 0 RESULTING VALUE 12/31/99 10 343.4984 3434.984 6.655715 FORMULA: 1000*(1+T)= 3434.984 = 3434.984 T = 0.203708 R = 2.434984 Putnam International Growth 01/02/97 TO NO. YEARS 2.992471 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES - INIT DEPOSIT 01/02/97 1000 4.754537 210.3254 1 FEE 01/02/98 0 5.460487 0 0.06 2 FEE 01/02/99 0 6.341568 0 0.05 3 FEE 12/31/99 0 10 0 0.05 4 N/A 0 N/A 0 0.04 5 N/A 0 N/A 0 0.03 6 N/A 0 N/A 0 0.02 7 N/A 0 N/A 0 0 8 N/A 0 N/A 0 0 9 N/A 0 N/A 0 0 10 N/A 0 N/A 0 0 11 N/A 0 N/A 0 0 12 N/A 0 N/A 0 0 13 N/A 0 N/A 0 0 14 FEE N/A 0 N/A 0 0 15 FEE N/A 0 N/A 0 0 RESULTING VALUE 12/31/99 10 210.3254 2103.254 2.992471 FORMULA: 1000*(1+T)= 2103.254 = 2060.754 T = 0.273324 R = 1.060754 Putnam Voyager 12/30/89 TO NO. YEARS 10 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/89 1000 1.569972 636.9541 FEE 12/31/90 0 1.513232 0 FEE 12/31/91 0 2.174958 0 FEE 12/31/92 0 2.361466 0 FEE 12/31/93 0 2.757761 0 FEE 12/31/94 0 2.741342 0 FEE 12/31/95 0 3.793988 0 FEE 12/31/96 0 4.216733 0 FEE 12/31/97 0 5.248587 0 FEE 12/31/98 0 6.422629 0 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 636.9541 6369.541 10 FORMULA: 1000*(1+T)= 6369.541 - (0.85 * 1000 * 0) = 6369.541 T = 0.203402 R = 5.369541 Putnam Growth & Income 12/30/89 TO NO. YEARS 10 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/89 1000 3.173577 315.1018 FEE 12/31/90 0 3.183511 0 FEE 12/31/91 0 3.728584 0 FEE 12/31/92 0 4.026071 0 FEE 12/31/93 0 4.526038 0 FEE 12/31/94 0 4.468389 0 FEE 12/31/95 0 6.010169 0 FEE 12/31/96 0 7.20905 0 FEE 12/31/97 0 8.805326 0 FEE 12/31/98 0 10.00282 0 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 315.1018 3151.018 10 FORMULA: 1000*(1+T)= 3151.018 - (0.85 * 1000 * 0) = 3151.018 T = 0.121618 R = 2.151018 MSDW Mid Cap 01/02/97 TO NO. YEARS 2.992471 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES - INIT DEPOSIT 01/02/97 1000 5.450293 183.4764 1 FEE 01/02/98 0.546 7.534271 0.072469 0.06 2 FEE 01/02/99 0.546 8.375903 0.065187 0.05 3 FEE 12/31/99 0.546 10 0.0546 0.04 4 N/A 0 N/A 0 0.03 5 N/A 0 N/A 0 0.02 6 N/A 0 N/A 0 0.01 7 N/A 0 N/A 0 0 8 N/A 0 N/A 0 0 9 N/A 0 N/A 0 0 10 N/A 0 N/A 0 0 11 N/A 0 N/A 0 0 12 N/A 0 N/A 0 0 13 N/A 0 N/A 0 0 14 FEE N/A 0 N/A 0 0 15 FEE N/A 0 N/A 0 0 RESULTING VALUE 12/31/99 10 183.2841 1832.841 2.992471 FORMULA: 1000*(1+T)= 1832.841 = 1798.841 T = 0.216778 R = 0.798841 Performance Death Benefit Combination None Performance Death Benefit Combination None Performance Death Benefit Combination - 1 Year VA 3 - Combo NLIC VAII MONEY MARKET 12/31/98 NO. YEARS 1 TO 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/98 1000 9.696614 103.1288 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 103.1288 1031.288 1 FORMULA: 1000*(1+T)= 1031.288 - (0.85 * 1000 * 0.05) = 988.7878 T = -0.01121 R = -0.01121 NLIC VAII HIGH YIELD 12/31/98 NO. YEARS 1 TO 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/98 1000 10.29739 97.11196 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 97.11196 971.1196 1 FORMULA: 1000*(1+T)= 971.1196 - (0.85 * 1000 * 0.05) = 928.6196 T = -0.07138 R = -0.07138 NLIC VAII EQUITY 12/31/98 NO. YEARS 1 TO 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/98 1000 6.406398 156.0939 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 156.0939 1560.939 1 FORMULA: 1000*(1+T)= 1560.939 - (0.85 * 1000 * 0.05) = 1518.439 T = 0.518439 R = 0.518439 NLIC VAII QUALITY INCOME 12/31/98 NO. YEARS 1 TO 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/98 1000 10.61859 94.17446 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 94.17446 941.7446 1 FORMULA: 1000*(1+T)= 941.7446 - (0.85 * 1000 * 0.05) = 899.2446 T = -0.10076 R = -0.10076 NLIC VAII STRATEGIST 12/31/98 NO. YEARS 1 TO 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/98 1000 8.657947 115.5008 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 115.5008 1155.008 1 FORMULA: 1000*(1+T)= 1155.008 - (0.85 * 1000 * 0.05) = 1112.508 T = 0.112508 R = 0.112508 NLIC VAII DIVIDEND GROWTH 12/31/98 NO. YEARS 1 TO 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/98 1000 10.40917 96.06914 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 96.06914 960.6914 1 FORMULA: 1000*(1+T)= 960.6914 - (0.85 * 1000 * 0.05) = 918.1914 T = -0.08181 R = -0.08181 NLIC VAII UTILITIES 12/31/98 NO. YEARS 1 TO 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/98 1000 9.014047 110.938 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 110.938 1109.38 1 FORMULA: 1000*(1+T)= 1109.38 - (0.85 * 1000 * 0.05) = 1066.88 T = 0.06688 R = 0.06688 NLIC VAII EUROPEAN GROWTH 12/31/98 NO. YEARS 1 TO 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/98 1000 7.869158 127.0784 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 127.0784 1270.784 1 FORMULA: 1000*(1+T)= 1270.784 - (0.85 * 1000 * 0.05) = 1228.284 T = 0.228284 R = 0.228284 NLIC VAII CAPITAL GROWTH 12/31/98 NO. YEARS 1 TO 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/98 1000 7.622214 131.1955 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 131.1955 1311.955 1 FORMULA: 1000*(1+T)= 1311.955 - (0.85 * 1000 * 0.05) = 1269.455 T = 0.269455 R = 0.269455 NLIC VAII PACIFIC GROWTH 12/31/98 NO. YEARS 1 TO 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/98 1000 6.116972 163.4796 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 163.4796 1634.796 1 FORMULA: 1000*(1+T)= 1634.796 - (0.85 * 1000 * 0.05) = 1592.296 T = 0.592296 R = 0.592296 NLIC VAII GLOBAL DIVIDEND GROWTH 12/31/98 NO. YEARS 1 TO 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/98 1000 8.861732 112.8448 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 112.8448 1128.448 1 FORMULA: 1000*(1+T)= 1128.448 - (0.85 * 1000 * 0.05) = 1085.948 T = 0.085948 R = 0.085948 NLIC VAII CAPITAL APPRECIATION 12/31/98 NO. YEARS 1 TO 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/98 1000 10.10222 98.9881 FEE 12/31/99 0 10.8153 0 RESULTING VALUE 12/31/99 10.8153 98.9881 1070.586 1 FORMULA: 1000*(1+T)= 1070.586 - (0.85 * 1000 * 0.05) = 1028.086 T = 0.028086 R = 0.028086 NLIC VAII INCOME BUILDER 12/31/98 NO. YEARS 1 TO 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/98 1000 9.489925 105.3749 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 105.3749 1053.749 1 FORMULA: 1000*(1+T)= 1053.749 - (0.85 * 1000 * 0.05) = 1011.249 T = 0.011249 R = 0.011249 NLIC VAII EQUITY GROWTH 12/31/98 NO. YEARS 1 TO 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/98 1000 7.2859 137.2514 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 137.2514 1372.514 1 FORMULA: 1000*(1+T)= 1372.514 - (0.85 * 1000 * 0.05) = 1330.014 T = 0.330014 R = 0.330014 NLIC VAII INTERNATIONAL MAGNUM 12/31/98 NO. YEARS 1 TO 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/98 1000 8.115614 123.2193 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 123.2193 1232.193 1 FORMULA: 1000*(1+T)= 1232.193 - (0.85 * 1000 * 0.05) = 1189.693 T = 0.189693 R = 0.189693 NLIC VAII EMERGING MARKETS 12/31/98 NO. YEARS 1 TO 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/98 1000 5.218244 191.6354 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 191.6354 1916.354 1 FORMULA: 1000*(1+T)= 1916.354 - (0.85 * 1000 * 0.05) = 1873.854 T = 0.873854 R = 0.873854 NLIC VAII EMERGING GROWTH 12/31/98 NO. YEARS 1 TO 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/98 1000 11.97452 83.51063 FEE 12/31/99 0 24.08814 0 RESULTING VALUE 12/31/99 24.08814 83.51063 2011.616 1 FORMULA: 1000*(1+T)= 2011.616 - (0.85 * 1000 * 0.05) = 1969.116 T = 0.969116 R = 0.969116 NLIC VAII REAL ESTATE 12/31/98 NO. YEARS 1 TO 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/98 1000 10.31206 96.97387 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 96.97387 969.7387 1 FORMULA: 1000*(1+T)= 969.7387 - (0.85 * 1000 * 0.05) = 927.2387 T = -0.07276 R = -0.07276 NLIC VAII COMPETITIVE EDGE 12/31/98 NO. YEARS 1 TO 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/98 1000 8.057444 124.1088 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 124.1088 1241.088 1 FORMULA: 1000*(1+T)= 1241.088 - (0.85 * 1000 * 0.05) = 1198.588 T = 0.198588 R = 0.198588 NLIC VAII S&P 500 INDEX 12/31/98 NO. YEARS 1 TO 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/98 1000 8.488206 117.8105 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 117.8105 1178.105 1 FORMULA: 1000*(1+T)= 1178.105 - (0.85 * 1000 * 0.05) = 1135.605 T = 0.135605 R = 0.135605 NLIC VAII AGGRESSIVE EQUITY 12/31/98 NO. YEARS 1 TO 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/98 1000 #VALUE! #VALUE! FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 #VALUE! #VALUE! 1 FORMULA: 1000*(1+T)= #VALUE! - (0.85 * 1000 * 0.05) = #VALUE! T = N/A R = N/A NLIC VAII SHORT TERM BOND 12/31/98 NO. YEARS 1 TO 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/98 1000 #VALUE! #VALUE! FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 #VALUE! #VALUE! 1 FORMULA: 1000*(1+T)= #VALUE! - (0.85 * 1000 * 0.05) = #VALUE! T = N/A R = N/A Alliance Premier Growth 12/31/98 NO. YEARS 1 TO 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/98 1000 #VALUE! #VALUE! FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 #VALUE! #VALUE! 1 FORMULA: 1000*(1+T)= #VALUE! - (0.85 * 1000 * 0.05) = #VALUE! T = N/A R = N/A Alliance Growth 12/31/98 NO. YEARS 1 TO 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/98 1000 7.555681 132.3507 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 132.3507 1323.507 1 FORMULA: 1000*(1+T)= 1323.507 - (0.85 * 1000 * 0.05) = 1281.007 T = 0.281007 R = 0.281007 Alliance Growth and Income 12/31/98 NO. YEARS 1 TO 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/98 1000 9.123075 109.6122 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 109.6122 1096.122 1 FORMULA: 1000*(1+T)= 1096.122 - (0.85 * 1000 * 0.05) = 1053.622 T = 0.053622 R = 0.053622 Aim Cap App 12/31/98 NO. YEARS 1 TO 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/98 1000 7.025639 142.3358 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 142.3358 1423.358 1 FORMULA: 1000*(1+T)= 1423.358 - (0.85 * 1000 * 0.05) = 1380.858 T = 0.380858 R = 0.380858 Aim Growth 12/31/98 NO. YEARS 1 TO 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/98 1000 7.512904 133.1043 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 133.1043 1331.043 1 FORMULA: 1000*(1+T)= 1331.043 - (0.85 * 1000 * 0.05) = 1288.543 T = 0.288543 R = 0.288543 Aim Value 12/31/98 NO. YEARS 1 TO 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/98 1000 7.821632 127.8506 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 127.8506 1278.506 1 FORMULA: 1000*(1+T)= 1278.506 - (0.85 * 1000 * 0.05) = 1236.006 T = 0.236006 R = 0.236006 Putnam International Growth 12/31/98 NO. YEARS 1 TO 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/98 1000 6.348516 157.5171 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 157.5171 1575.171 1 FORMULA: 1000*(1+T)= 1575.171 - (0.85 * 1000 * 0.05) = 1532.671 T = 0.532671 R = 0.532671 Putnam Voyager 12/31/98 NO. YEARS 1 TO 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/98 1000 6.429676 155.5288 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 155.5288 1555.288 1 FORMULA: 1000*(1+T)= 1555.288 - (0.85 * 1000 * 0.05) = 1512.788 T = 0.512788 R = 0.512788 Putnam Growth & Income 12/31/98 NO. YEARS 1 TO 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/98 1000 10.01383 99.86187 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 99.86187 998.6187 1 FORMULA: 1000*(1+T)= 998.6187 - (0.85 * 1000 * 0.05) = 956.1187 T = -0.04388 R = -0.04388 MSDW Mid Cap 12/31/98 NO. YEARS 1 TO 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/98 1000 8.425122 118.6926 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 118.6926 1186.926 1 FORMULA: 1000*(1+T)= 1186.926 - (0.85 * 1000 * 0.05) = 1144.426 T = 0.144426 R = 0.144426 Performance Death Benefit Combination - 5 Years VA 3 - Combo NLIC VAII MONEY MARKET 12/30/94 TO NO. YEARS 5 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/94 1000 8.410082 118.9049 FEE 12/31/95 0 8.741942 0 FEE 12/31/96 0 9.04322 0 FEE 12/31/97 0 9.366514 0 FEE 12/31/98 0 9.696614 0 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 118.9049 1189.049 5 FORMULA: 1000*(1+T)= 1189.049 - (0.85 * 1000 * 0.02) = 1172.049 T = 0.03226 R = 0.172049 NLIC VAII HIGH YIELD 12/30/94 TO NO. YEARS 5 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/94 1000 8.142763 122.8084 FEE 12/31/95 0 9.192424 0 FEE 12/31/96 0 10.13053 0 FEE 12/31/97 0 11.15393 0 FEE 12/31/98 0 10.29739 0 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 122.8084 1228.084 5 FORMULA: 1000*(1+T)= 1228.084 - (0.85 * 1000 * 0.02) = 1211.084 T = 0.039046 R = 0.211084 NLIC VAII EQUITY 12/30/94 TO NO. YEARS 5 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/94 1000 2.35184 425.1989 FEE 12/31/95 0 3.335802 0 FEE 12/31/96 0 3.68873 0 FEE 12/31/97 0 4.98965 0 FEE 12/31/98 0 6.406398 0 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 425.1989 4251.989 5 FORMULA: 1000*(1+T)= 4251.989 - (0.85 * 1000 * 0.02) = 4234.989 T = 0.334659 R = 3.234989 NLIC VAII QUALITY INCOME 12/30/94 TO NO. YEARS 5 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/94 1000 7.402777 135.0844 FEE 12/31/95 0 9.082965 0 FEE 12/31/96 0 9.078108 0 FEE 12/31/97 0 9.927942 0 FEE 12/31/98 0 10.61859 0 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 135.0844 1350.844 5 FORMULA: 1000*(1+T)= 1350.844 - (0.85 * 1000 * 0.02) = 1333.844 T = 0.059305 R = 0.333844 NLIC VAII STRATEGIST 12/30/94 TO NO. YEARS 5 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/94 1000 5.099628 196.0927 FEE 12/31/95 0 5.486322 0 FEE 12/31/96 0 6.210543 0 FEE 12/31/97 0 6.951195 0 FEE 12/31/98 0 8.657947 0 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 196.0927 1960.927 5 FORMULA: 1000*(1+T)= 1960.927 - (0.85 * 1000 * 0.02) = 1943.927 T = 0.142184 R = 0.943927 NLIC VAII DIVIDEND GROWTH 12/30/94 TO NO. YEARS 5 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/94 1000 4.596337 217.5645 FEE 12/31/95 0 6.136156 0 FEE 12/31/96 0 7.485954 0 FEE 12/31/97 0 9.254645 0 FEE 12/31/98 0 10.40917 0 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 217.5645 2175.645 5 FORMULA: 1000*(1+T)= 2175.645 - (0.85 * 1000 * 0.02) = 2158.645 T = 0.16637 R = 1.158645 NLIC VAII UTILITIES 12/30/94 TO NO. YEARS 5 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/94 1000 4.369429 228.8628 FEE 12/31/95 0 5.528439 0 FEE 12/31/96 0 5.913072 0 FEE 12/31/97 0 7.400105 0 FEE 12/31/98 0 9.014047 0 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 228.8628 2288.628 5 FORMULA: 1000*(1+T)= 2288.628 - (0.85 * 1000 * 0.02) = 2271.628 T = 0.178331 R = 1.271628 NLIC VAII EUROPEAN GROWTH 12/30/94 TO NO. YEARS 5 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/94 1000 3.565711 280.449 FEE 12/31/95 0 4.412493 0 FEE 12/31/96 0 5.645006 0 FEE 12/31/97 0 6.449596 0 FEE 12/31/98 0 7.869158 0 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 280.449 2804.49 5 FORMULA: 1000*(1+T)= 2804.49 - (0.85 * 1000 * 0.02) = 2787.49 T = 0.22756 R = 1.78749 NLIC VAII CAPITAL GROWTH 12/30/94 TO NO. YEARS 5 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/94 1000 3.659082 273.2926 FEE 12/31/95 0 4.810653 0 FEE 12/31/96 0 5.281049 0 FEE 12/31/97 0 6.473365 0 FEE 12/31/98 0 7.622214 0 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 273.2926 2732.926 5 FORMULA: 1000*(1+T)= 2732.926 - (0.85 * 1000 * 0.02) = 2715.926 T = 0.221191 R = 1.715926 NLIC VAII PACIFIC GROWTH 12/30/94 TO NO. YEARS 5 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/94 1000 10.52792 94.98549 FEE 12/31/95 0 11.06455 0 FEE 12/31/96 0 11.31237 0 FEE 12/31/97 0 6.936329 0 FEE 12/31/98 0 6.116972 0 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 94.98549 949.8549 5 FORMULA: 1000*(1+T)= 949.8549 - (0.85 * 1000 * 0.02) = 932.8549 T = -0.0138 R = -0.06715 NLIC VAII GLOBAL DIVIDEND GROWTH 12/30/94 TO NO. YEARS 5 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/94 1000 5.210757 191.9107 FEE 12/31/95 0 6.26984 0 FEE 12/31/96 0 7.255652 0 FEE 12/31/97 0 8.000979 0 FEE 12/31/98 0 8.861732 0 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 191.9107 1919.107 5 FORMULA: 1000*(1+T)= 1919.107 - (0.85 * 1000 * 0.02) = 1902.107 T = 0.137227 R = 0.902107 NLIC VAII CAPITAL APPRECIATION 12/30/94 TO NO. YEARS 5 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/94 1000 #VALUE! #VALUE! FEE 12/31/95 0 #VALUE! #VALUE! FEE 12/31/96 0 #VALUE! #VALUE! FEE 12/31/97 0 11.1517 0 FEE 12/31/98 0 10.10222 0 FEE 12/31/99 0 10.8153 0 RESULTING VALUE 12/31/99 10.8153 #VALUE! #VALUE! 5 FORMULA: 1000*(1+T)= #VALUE! - (0.85 * 1000 * 0.02) = #VALUE! T = N/A R = N/A NLIC VAII INCOME BUILDER 12/30/94 TO NO. YEARS 5 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/94 1000 #VALUE! #VALUE! FEE 12/31/95 0 #VALUE! #VALUE! FEE 12/31/96 0 #VALUE! #VALUE! FEE 12/31/97 0 9.341755 0 FEE 12/31/98 0 9.489925 0 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 #VALUE! #VALUE! 5 FORMULA: 1000*(1+T)= #VALUE! - (0.85 * 1000 * 0.02) = #VALUE! T = N/A R = N/A NLIC VAII EQUITY GROWTH 12/30/94 TO NO. YEARS 5 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/94 1000 #VALUE! #VALUE! FEE 12/31/95 0 #VALUE! #VALUE! FEE 12/31/96 0 #VALUE! #VALUE! FEE 12/31/97 0 6.20551 0 FEE 12/31/98 0 7.2859 0 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 #VALUE! #VALUE! 5 FORMULA: 1000*(1+T)= #VALUE! - (0.85 * 1000 * 0.02) = #VALUE! T = N/A R = N/A NLIC VAII INTERNATIONAL MAGNUM 12/30/94 TO NO. YEARS 5 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/94 1000 #VALUE! #VALUE! FEE 12/31/95 0 #VALUE! #VALUE! FEE 12/31/96 0 #VALUE! #VALUE! FEE 12/31/97 0 7.594538 0 FEE 12/31/98 0 8.115614 0 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 #VALUE! #VALUE! 5 FORMULA: 1000*(1+T)= #VALUE! - (0.85 * 1000 * 0.02) = #VALUE! T = N/A R = N/A NLIC VAII EMERGING MARKETS 12/30/94 TO NO. YEARS 5 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/94 1000 #VALUE! #VALUE! FEE 12/31/95 0 #VALUE! #VALUE! FEE 12/31/96 0 7.119311 0 FEE 12/31/97 0 7.028576 0 FEE 12/31/98 0 5.218244 0 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 #VALUE! #VALUE! 5 FORMULA: 1000*(1+T)= #VALUE! - (0.85 * 1000 * 0.02) = #VALUE! T = N/A R = N/A NLIC VAII EMERGING GROWTH 12/30/94 TO NO. YEARS 5 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/94 1000 #VALUE! #VALUE! FEE 12/31/95 0 6.50021 0 FEE 12/31/96 0 7.462035 0 FEE 12/31/97 0 8.844423 0 FEE 12/31/98 0 11.97452 0 FEE 12/31/99 0 24.08814 0 RESULTING VALUE 12/31/99 24.08814 #VALUE! #VALUE! 5 FORMULA: 1000*(1+T)= #VALUE! - (0.85 * 1000 * 0.02) = #VALUE! T = N/A R = N/A NLIC VAII REAL ESTATE 12/30/94 TO NO. YEARS 5 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/94 1000 #VALUE! #VALUE! FEE 12/31/95 0 #VALUE! #VALUE! FEE 12/31/96 0 #VALUE! #VALUE! FEE 12/31/97 0 12.03484 0 FEE 12/31/98 0 10.31206 0 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 #VALUE! #VALUE! 5 FORMULA: 1000*(1+T)= #VALUE! - (0.85 * 1000 * 0.02) = #VALUE! T = N/A R = N/A NLIC VAII COMPETITIVE EDGE 12/30/94 TO NO. YEARS 5 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/94 1000 #VALUE! #VALUE! FEE 12/31/95 0 #VALUE! #VALUE! FEE 12/31/96 0 #VALUE! #VALUE! FEE 12/31/97 0 #VALUE! #VALUE! FEE 12/31/98 0 8.057444 0 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 #VALUE! #VALUE! 5 FORMULA: 1000*(1+T)= #VALUE! - (0.85 * 1000 * 0.02) = #VALUE! T = N/A R = N/A NLIC VAII S&P 500 INDEX 12/30/94 TO NO. YEARS 5 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/94 1000 #VALUE! #VALUE! FEE 12/31/95 0 #VALUE! #VALUE! FEE 12/31/96 0 #VALUE! #VALUE! FEE 12/31/97 0 #VALUE! #VALUE! FEE 12/31/98 0 8.488206 0 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 #VALUE! #VALUE! 5 FORMULA: 1000*(1+T)= #VALUE! - (0.85 * 1000 * 0.02) = #VALUE! T = N/A R = N/A NLIC VAII AGGRESSIVE EQUITY 12/30/94 TO NO. YEARS 5 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/94 1000 #VALUE! #VALUE! FEE 12/31/95 0 #VALUE! #VALUE! FEE 12/31/96 0 #VALUE! #VALUE! FEE 12/31/97 0 #VALUE! #VALUE! FEE 12/31/98 0 #VALUE! #VALUE! FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 #VALUE! #VALUE! 5 FORMULA: 1000*(1+T)= #VALUE! - (0.85 * 1000 * 0.02) = #VALUE! T = N/A R = N/A NLIC VAII SHORT TERM BOND 12/30/94 TO NO. YEARS 5 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/94 1000 #VALUE! #VALUE! FEE 12/31/95 0 #VALUE! #VALUE! FEE 12/31/96 0 #VALUE! #VALUE! FEE 12/31/97 0 #VALUE! #VALUE! FEE 12/31/98 0 #VALUE! #VALUE! FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 #VALUE! #VALUE! 5 FORMULA: 1000*(1+T)= #VALUE! - (0.85 * 1000 * 0.02) = #VALUE! T = N/A R = N/A Alliance Premier Growth 12/30/94 TO NO. YEARS 5 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/94 1000 #VALUE! #VALUE! FEE 12/31/95 0 #VALUE! #VALUE! FEE 12/31/96 0 #VALUE! #VALUE! FEE 12/31/97 0 #VALUE! #VALUE! FEE 12/31/98 0 #VALUE! #VALUE! FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 #VALUE! #VALUE! 5 FORMULA: 1000*(1+T)= #VALUE! - (0.85 * 1000 * 0.02) = #VALUE! T = N/A R = N/A Alliance Growth 12/30/94 TO NO. YEARS 5 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/94 1000 2.767911 361.2833 FEE 12/31/95 0 3.685042 0 FEE 12/31/96 0 4.660153 0 FEE 12/31/97 0 5.96361 0 FEE 12/31/98 0 7.555681 0 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 361.2833 3612.833 5 FORMULA: 1000*(1+T)= 3612.833 - (0.85 * 1000 * 0.02) = 3595.833 T = 0.291695 R = 2.595833 Alliance Growth and Income 12/30/94 TO NO. YEARS 5 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/94 1000 3.705287 269.8846 FEE 12/31/95 0 4.952505 0 FEE 12/31/96 0 6.048616 0 FEE 12/31/97 0 7.667529 0 FEE 12/31/98 0 9.123075 0 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 269.8846 2698.846 5 FORMULA: 1000*(1+T)= 2698.846 - (0.85 * 1000 * 0.02) = 2681.846 T = 0.218111 R = 1.681846 Aim Cap App 12/30/94 TO NO. YEARS 5 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/94 1000 3.568503 280.2296 FEE 12/31/95 0 4.765839 0 FEE 12/31/96 0 5.514873 0 FEE 12/31/97 0 6.160931 0 FEE 12/31/98 0 7.025639 0 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 280.2296 2802.296 5 FORMULA: 1000*(1+T)= 2802.296 - (0.85 * 1000 * 0.02) = 2785.296 T = 0.227366 R = 1.785296 Aim Growth 12/30/94 TO NO. YEARS 5 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/94 1000 3.170644 315.3933 FEE 12/31/95 0 4.205844 0 FEE 12/31/96 0 4.887933 0 FEE 12/31/97 0 6.103476 0 FEE 12/31/98 0 7.512904 0 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 315.3933 3153.933 5 FORMULA: 1000*(1+T)= 3153.933 - (0.85 * 1000 * 0.02) = 3136.933 T = 0.256901 R = 2.136933 Aim Value 12/30/94 TO NO. YEARS 5 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/94 1000 3.4122 293.0661 FEE 12/31/95 0 4.575979 0 FEE 12/31/96 0 5.179983 0 FEE 12/31/97 0 6.306036 0 FEE 12/31/98 0 7.821632 0 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 293.0661 2930.661 5 FORMULA: 1000*(1+T)= 2930.661 - (0.85 * 1000 * 0.02) = 2913.661 T = 0.238477 R = 1.913661 Putnam International Growth 12/30/94 TO NO. YEARS 5 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/94 1000 #VALUE! #VALUE! FEE 12/31/95 0 #VALUE! #VALUE! FEE 12/31/96 0 #VALUE! #VALUE! FEE 12/31/97 0 5.444387 0 FEE 12/31/98 0 6.348516 0 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 #VALUE! #VALUE! 5 FORMULA: 1000*(1+T)= #VALUE! - (0.85 * 1000 * 0.02) = #VALUE! T = N/A R = N/A Putnam Voyager 12/30/94 TO NO. YEARS 5 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/94 1000 2.756446 362.786 FEE 12/31/95 0 3.810702 0 FEE 12/31/96 0 4.230652 0 FEE 12/31/97 0 5.260125 0 FEE 12/31/98 0 6.429676 0 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 362.786 3627.86 5 FORMULA: 1000*(1+T)= 3627.86 - (0.85 * 1000 * 0.02) = 3610.86 T = 0.292773 R = 2.61086 Putnam Growth & Income 12/30/94 TO NO. YEARS 5 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/94 1000 4.493022 222.5674 FEE 12/31/95 0 6.036663 0 FEE 12/31/96 0 7.232874 0 FEE 12/31/97 0 8.824721 0 FEE 12/31/98 0 10.01383 0 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 222.5674 2225.674 5 FORMULA: 1000*(1+T)= 2225.674 - (0.85 * 1000 * 0.02) = 2208.674 T = 0.171727 R = 1.208674 MSDW Mid Cap 12/30/94 TO NO. YEARS 5 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/94 1000 #VALUE! #VALUE! FEE 12/31/95 0 #VALUE! #VALUE! FEE 12/31/96 0 #VALUE! #VALUE! FEE 12/31/97 0 7.585646 0 FEE 12/31/98 0 8.425122 0 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 #VALUE! #VALUE! 5 FORMULA: 1000*(1+T)= #VALUE! - (0.85 * 1000 * 0.02) = #VALUE! T = N/A R = N/A Performance Death Benefit Combination - 10 Years/ Since Inception VA 3 - Combo NLIC VAII MONEY MARKET 12/30/89 TO NO. YEARS 10 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/89 1000 7.226238 138.3846 FEE 12/31/90 0 7.676798 0 FEE 12/31/91 0 7.990299 0 FEE 12/31/92 0 8.13437 0 FEE 12/31/93 0 8.226164 0 FEE 12/31/94 0 8.410082 0 FEE 12/31/95 0 8.741942 0 FEE 12/31/96 0 9.04322 0 FEE 12/31/97 0 9.366514 0 FEE 12/31/98 0 9.696614 0 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 138.3846 1383.846 10 FORMULA: 1000*(1+T)= 1383.846 - (0.85 * 1000 * 0) = 1383.846 T = 0.03302 R = 0.383846 NLIC VAII HIGH YIELD 12/30/89 TO NO. YEARS 10 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/89 1000 5.279559 189.4097 FEE 12/31/90 0 3.803014 0 FEE 12/31/91 0 5.938483 0 FEE 12/31/92 0 6.921947 0 FEE 12/31/93 0 8.46026 0 FEE 12/31/94 0 8.142763 0 FEE 12/31/95 0 9.192424 0 FEE 12/31/96 0 10.13053 0 FEE 12/31/97 0 11.15393 0 FEE 12/31/98 0 10.29739 0 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 189.4097 1894.097 10 FORMULA: 1000*(1+T)= 1894.097 - (0.85 * 1000 * 0) = 1894.097 T = 0.065958 R = 0.894097 NLIC VAII EQUITY 12/30/89 TO NO. YEARS 10 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/89 1000 1.473198 678.7956 FEE 12/31/90 0 1.397381 0 FEE 12/31/91 0 2.187469 0 FEE 12/31/92 0 2.156324 0 FEE 12/31/93 0 2.540612 0 FEE 12/31/94 0 2.35184 0 FEE 12/31/95 0 3.335802 0 FEE 12/31/96 0 3.68873 0 FEE 12/31/97 0 4.98965 0 FEE 12/31/98 0 6.406398 0 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 678.7956 6787.956 10 FORMULA: 1000*(1+T)= 6787.956 - (0.85 * 1000 * 0) = 6787.956 T = 0.211083 R = 5.787956 NLIC VAII QUALITY INCOME 12/30/89 TO NO. YEARS 10 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/89 1000 5.554148 180.0456 FEE 12/31/90 0 5.841488 0 FEE 12/31/91 0 6.813406 0 FEE 12/31/92 0 7.261052 0 FEE 12/31/93 0 8.075119 0 FEE 12/31/94 0 7.402777 0 FEE 12/31/95 0 9.082965 0 FEE 12/31/96 0 9.078108 0 FEE 12/31/97 0 9.927942 0 FEE 12/31/98 0 10.61859 0 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 180.0456 1800.456 10 FORMULA: 1000*(1+T)= 1800.456 - (0.85 * 1000 * 0) = 1800.456 T = 0.060567 R = 0.800456 NLIC VAII STRATEGIST 12/30/89 TO NO. YEARS 10 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/89 1000 3.442197 290.5121 FEE 12/31/90 0 3.440307 0 FEE 12/31/91 0 4.343039 0 FEE 12/31/92 0 4.583858 0 FEE 12/31/93 0 4.980509 0 FEE 12/31/94 0 5.099628 0 FEE 12/31/95 0 5.486322 0 FEE 12/31/96 0 6.210543 0 FEE 12/31/97 0 6.951195 0 FEE 12/31/98 0 8.657947 0 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 290.5121 2905.121 10 FORMULA: 1000*(1+T)= 2905.121 - (0.85 * 1000 * 0) = 2905.121 T = 0.112542 R = 1.905121 NLIC VAII DIVIDEND GROWTH 03/01/90 TO NO. YEARS 9.83436 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES - INIT DEPOSIT 03/01/90 1000 3.503133 285.4588 1 FEE 03/01/91 0 3.598315 0 0.06 2 FEE 03/01/92 0 4.027622 0 0.05 3 FEE 03/01/93 0 4.413112 0 0.05 4 03/01/94 0 4.735485 0 0.04 5 03/01/95 0 4.864638 0 0.03 6 03/01/96 0 6.504076 0 0.02 7 03/01/97 0 7.762997 0 0 8 03/01/98 0 9.829687 0 0 9 03/01/99 0 10.18027 0 0 10 12/31/99 0 10 0 0 11 N/A 0 N/A 0 0 12 N/A 0 N/A 0 0 13 N/A 0 N/A 0 0 14 FEE N/A 0 N/A 0 0 15 FEE N/A 0 N/A 0 0 RESULTING VALUE 12/31/99 10 285.4588 2854.588 9.83436 FORMULA: 1000*(1+T)= 2854.588 = 2854.588 T = 0.112555 R = 1.854588 NLIC VAII UTILITIES 03/01/90 TO NO. YEARS 9.83436 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES - INIT DEPOSIT 03/01/90 1000 3.155606 316.8963 1 FEE 03/01/91 0 3.3594 0 0.06 2 FEE 03/01/92 0 3.720975 0 0.05 3 FEE 03/01/93 0 4.601367 0 0.05 4 03/01/94 0 4.628756 0 0.04 5 03/01/95 0 4.536054 0 0.03 6 03/01/96 0 5.562148 0 0.02 7 03/01/97 0 5.967103 0 0 8 03/01/98 0 7.603813 0 0 9 03/01/99 0 8.681681 0 0 10 12/31/99 0 10 0 0 11 N/A 0 N/A 0 0 12 N/A 0 N/A 0 0 13 N/A 0 N/A 0 0 14 FEE N/A 0 N/A 0 0 15 FEE N/A 0 N/A 0 0 RESULTING VALUE 12/31/99 10 316.8963 3168.963 9.83436 FORMULA: 1000*(1+T)= 3168.963 = 3168.963 T = 0.124438 R = 2.168963 NLIC VAII EUROPEAN GROWTH 03/01/91 TO NO. YEARS 8.835044 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES - INIT DEPOSIT 03/01/91 1000 2.352347 425.1074 1 FEE 03/01/92 0 2.418649 0 0.06 2 FEE 03/01/93 0 2.515406 0 0.05 3 FEE 03/01/94 0 3.451146 0 0.05 4 03/01/95 0 3.650666 0 0.04 5 03/01/96 0 4.63389 0 0.03 6 03/01/97 0 5.664474 0 0.02 7 03/01/98 0 7.280595 0 0 8 03/01/99 0 7.730251 0 0 9 12/31/99 0 10 0 0 10 N/A 0 N/A 0 0 11 N/A 0 N/A 0 0 12 N/A 0 N/A 0 0 13 N/A 0 N/A 0 0 14 FEE N/A 0 N/A 0 0 15 FEE N/A 0 N/A 0 0 RESULTING VALUE 12/31/99 10 425.1074 4251.074 8.835044 FORMULA: 1000*(1+T)= 4251.074 = 4251.074 T = 0.177978 R = 3.251074 NLIC VAII CAPITAL GROWTH 03/01/91 TO NO. YEARS 8.835044 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES - INIT DEPOSIT 03/01/91 1000 3.261157 306.6396 1 FEE 03/01/92 0 3.950183 0 0.06 2 FEE 03/01/93 0 3.844083 0 0.05 3 FEE 03/01/94 0 3.803151 0 0.05 4 03/01/95 0 3.925266 0 0.04 5 03/01/96 0 5.071752 0 0.03 6 03/01/97 0 5.428841 0 0.02 7 03/01/98 0 6.997229 0 0 8 03/01/99 0 7.565036 0 0 9 12/31/99 0 10 0 0 10 N/A 0 N/A 0 0 11 N/A 0 N/A 0 0 12 N/A 0 N/A 0 0 13 N/A 0 N/A 0 0 14 FEE N/A 0 N/A 0 0 15 FEE N/A 0 N/A 0 0 RESULTING VALUE 12/31/99 10 306.6396 3066.396 8.835044 FORMULA: 1000*(1+T)= 3066.396 = 3066.396 T = 0.135218 R = 2.066396 NLIC VAII PACIFIC GROWTH 02/22/94 TO NO. YEARS 5.853525 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES - INIT DEPOSIT 02/22/94 1000 11.55398 86.55028 1 FEE 02/22/95 0 9.944187 0 0.06 2 FEE 02/22/96 0 11.95995 0 0.05 3 FEE 02/22/97 0 11.42276 0 0.05 4 02/22/98 0 6.966198 0 0.04 5 02/22/99 0 5.889547 0 0.03 6 12/31/99 0 10 0 0.02 7 N/A 0 N/A 0 0 8 N/A 0 N/A 0 0 9 N/A 0 N/A 0 0 10 N/A 0 N/A 0 0 11 N/A 0 N/A 0 0 12 N/A 0 N/A 0 0 13 N/A 0 N/A 0 0 14 FEE N/A 0 N/A 0 0 15 FEE N/A 0 N/A 0 0 RESULTING VALUE 12/31/99 10 86.55028 865.5028 5.853525 FORMULA: 1000*(1+T)= 865.5028 = 848.5028 T = -0.02768 R = -0.1515 NLIC VAII GLOBAL DIVIDEND GROWTH 02/22/94 TO NO. YEARS 5.853525 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES - INIT DEPOSIT 02/22/94 1000 5.27675 189.5106 1 FEE 02/22/95 0 5.2519 0 0.06 2 FEE 02/22/96 0 6.447673 0 0.05 3 FEE 02/22/97 0 7.277832 0 0.05 4 02/22/98 0 8.339597 0 0.04 5 02/22/99 0 8.611162 0 0.03 6 12/31/99 0 10 0 0.02 7 N/A 0 N/A 0 0 8 N/A 0 N/A 0 0 9 N/A 0 N/A 0 0 10 N/A 0 N/A 0 0 11 N/A 0 N/A 0 0 12 N/A 0 N/A 0 0 13 N/A 0 N/A 0 0 14 FEE N/A 0 N/A 0 0 15 FEE N/A 0 N/A 0 0 RESULTING VALUE 12/31/99 10 189.5106 1895.106 5.853525 FORMULA: 1000*(1+T)= 1895.106 = 1878.106 T = 0.113683 R = 0.878106 NLIC VAII CAPITAL APPRECIATION 01/21/97 TO NO. YEARS 2.940452 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES - INIT DEPOSIT 01/21/97 1000 10 100 1 FEE 01/21/98 0 10.92498 0 0.06 2 FEE 01/21/99 0 10.51194 0 0.05 3 FEE 12/31/99 0 10.8153 0 0.05 4 N/A 0 N/A 0 0.04 5 N/A 0 N/A 0 0.03 6 N/A 0 N/A 0 0.02 7 N/A 0 N/A 0 0 8 N/A 0 N/A 0 0 9 N/A 0 N/A 0 0 10 N/A 0 N/A 0 0 11 N/A 0 N/A 0 0 12 N/A 0 N/A 0 0 13 N/A 0 N/A 0 0 14 FEE N/A 0 N/A 0 0 15 FEE N/A 0 N/A 0 0 RESULTING VALUE 12/31/99 10.8153 100 1081.53 2.940452 FORMULA: 1000*(1+T)= 1081.53 = 1039.03 T = 0.013106 R = 0.03903 NLIC VAII INCOME BUILDER 01/21/97 TO NO. YEARS 2.940452 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES - INIT DEPOSIT 01/21/97 1000 7.74834 129.0599 1 FEE 01/21/98 0 9.317349 0 0.06 2 FEE 01/21/99 0 9.572268 0 0.05 3 FEE 12/31/99 0 10 0 0.05 4 N/A 0 N/A 0 0.04 5 N/A 0 N/A 0 0.03 6 N/A 0 N/A 0 0.02 7 N/A 0 N/A 0 0 8 N/A 0 N/A 0 0 9 N/A 0 N/A 0 0 10 N/A 0 N/A 0 0 11 N/A 0 N/A 0 0 12 N/A 0 N/A 0 0 13 N/A 0 N/A 0 0 14 FEE N/A 0 N/A 0 0 15 FEE N/A 0 N/A 0 0 RESULTING VALUE 12/31/99 10 129.0599 1290.599 2.940452 FORMULA: 1000*(1+T)= 1290.599 = 1248.099 T = 0.078283 R = 0.248099 NLIC VAII EQUITY GROWTH 01/02/97 TO NO. YEARS 2.992471 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES - INIT DEPOSIT 01/02/97 1000 4.738233 211.0492 1 FEE 01/02/98 0 6.190357 0 0.06 2 FEE 01/02/99 0 7.251807 0 0.05 3 FEE 12/31/99 0 10 0 0.05 4 N/A 0 N/A 0 0.04 5 N/A 0 N/A 0 0.03 6 N/A 0 N/A 0 0.02 7 N/A 0 N/A 0 0 8 N/A 0 N/A 0 0 9 N/A 0 N/A 0 0 10 N/A 0 N/A 0 0 11 N/A 0 N/A 0 0 12 N/A 0 N/A 0 0 13 N/A 0 N/A 0 0 14 FEE N/A 0 N/A 0 0 15 FEE N/A 0 N/A 0 0 RESULTING VALUE 12/31/99 10 211.0492 2110.492 2.992471 FORMULA: 1000*(1+T)= 2110.492 = 2067.992 T = 0.274816 R = 1.067992 NLIC VAII INTERNATIONAL MAGNUM 01/02/97 TO NO. YEARS 2.992471 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES - INIT DEPOSIT 01/02/97 1000 7.189779 139.0863 1 FEE 01/02/98 0 7.623143 0 0.06 2 FEE 01/02/99 0 8.230888 0 0.05 3 FEE 12/31/99 0 10 0 0.05 4 N/A 0 N/A 0 0.04 5 N/A 0 N/A 0 0.03 6 N/A 0 N/A 0 0.02 7 N/A 0 N/A 0 0 8 N/A 0 N/A 0 0 9 N/A 0 N/A 0 0 10 N/A 0 N/A 0 0 11 N/A 0 N/A 0 0 12 N/A 0 N/A 0 0 13 N/A 0 N/A 0 0 14 FEE N/A 0 N/A 0 0 15 FEE N/A 0 N/A 0 0 RESULTING VALUE 12/31/99 10 139.0863 1390.863 2.992471 FORMULA: 1000*(1+T)= 1390.863 = 1348.363 T = 0.10504 R = 0.348363 NLIC VAII EMERGING MARKETS 10/01/96 TO NO. YEARS 3.247091 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES - INIT DEPOSIT 10/01/96 1000 7.308314 136.8305 1 FEE 10/01/97 0 8.689355 0 0.06 2 FEE 10/01/98 0 4.413656 0 0.05 3 FEE 10/01/99 0 6.709885 0 0.05 4 12/31/99 0 10 0 0.04 5 N/A 0 N/A 0 0.03 6 N/A 0 N/A 0 0.02 7 N/A 0 N/A 0 0 8 N/A 0 N/A 0 0 9 N/A 0 N/A 0 0 10 N/A 0 N/A 0 0 11 N/A 0 N/A 0 0 12 N/A 0 N/A 0 0 13 N/A 0 N/A 0 0 14 FEE N/A 0 N/A 0 0 15 FEE N/A 0 N/A 0 0 RESULTING VALUE 12/31/99 10 136.8305 1368.305 3.247091 FORMULA: 1000*(1+T)= 1368.305 = 1334.305 T = 0.092885 R = 0.334305 NLIC VAII EMERGING GROWTH 07/03/95 TO NO. YEARS 4.495551 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES - INIT DEPOSIT 07/03/95 1000 5.594407 178.75 1 FEE 07/03/96 0 7.559741 0 0.06 2 FEE 07/03/97 0 8.242425 0 0.05 3 FEE 07/03/98 0 10.77304 0 0.05 4 07/03/99 0 14.85222 0 0.04 5 12/31/99 0 24.08814 0 0.03 6 N/A 0 N/A 0 0.02 7 N/A 0 N/A 0 0 8 N/A 0 N/A 0 0 9 N/A 0 N/A 0 0 10 N/A 0 N/A 0 0 11 N/A 0 N/A 0 0 12 N/A 0 N/A 0 0 13 N/A 0 N/A 0 0 14 FEE N/A 0 N/A 0 0 15 FEE N/A 0 N/A 0 0 RESULTING VALUE 12/31/99 24.08814 178.75 4305.754 4.495551 FORMULA: 1000*(1+T)= 4305.754 = 4280.254 T = 0.381864 R = 3.280254 NLIC VAII REAL ESTATE 03/04/97 TO NO. YEARS 2.825462 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES - INIT DEPOSIT 03/04/97 1000 10.33532 96.75564 1 FEE 03/04/98 0 11.74939 0 0.06 2 FEE 03/04/99 0 9.927017 0 0.05 3 FEE 12/31/99 0 10 0 0.05 4 N/A 0 N/A 0 0.04 5 N/A 0 N/A 0 0.03 6 N/A 0 N/A 0 0.02 7 N/A 0 N/A 0 0 8 N/A 0 N/A 0 0 9 N/A 0 N/A 0 0 10 N/A 0 N/A 0 0 11 N/A 0 N/A 0 0 12 N/A 0 N/A 0 0 13 N/A 0 N/A 0 0 14 FEE N/A 0 N/A 0 0 15 FEE N/A 0 N/A 0 0 RESULTING VALUE 12/31/99 10 96.75564 967.5564 2.825462 FORMULA: 1000*(1+T)= 967.5564 = 925.0564 T = -0.02719 R = -0.07494 NLIC VAII COMPETITIVE EDGE 05/18/98 TO NO. YEARS 1.620808 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES - INIT DEPOSIT 05/18/98 1000 8.295088 120.5533 1 FEE 05/18/99 0 8.376611 0 0.06 2 FEE 12/31/99 0 10 0 0.05 3 FEE N/A 0 N/A 0 0.05 4 N/A 0 N/A 0 0.04 5 N/A 0 N/A 0 0.03 6 N/A 0 N/A 0 0.02 7 N/A 0 N/A 0 0 8 N/A 0 N/A 0 0 9 N/A 0 N/A 0 0 10 N/A 0 N/A 0 0 11 N/A 0 N/A 0 0 12 N/A 0 N/A 0 0 13 N/A 0 N/A 0 0 14 FEE N/A 0 N/A 0 0 15 FEE N/A 0 N/A 0 0 RESULTING VALUE 12/31/99 10 120.5533 1205.533 1.620808 FORMULA: 1000*(1+T)= 1205.533 = 1163.033 T = 0.097662 R = 0.163033 NLIC VAII S&P 500 INDEX 05/18/98 TO NO. YEARS 1.620808 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES - INIT DEPOSIT 05/18/98 1000 7.640368 130.8837 1 FEE 05/18/99 0 9.174412 0 0.06 2 FEE 12/31/99 0 10 0 0.05 3 FEE N/A 0 N/A 0 0.05 4 N/A 0 N/A 0 0.04 5 N/A 0 N/A 0 0.03 6 N/A 0 N/A 0 0.02 7 N/A 0 N/A 0 0 8 N/A 0 N/A 0 0 9 N/A 0 N/A 0 0 10 N/A 0 N/A 0 0 11 N/A 0 N/A 0 0 12 N/A 0 N/A 0 0 13 N/A 0 N/A 0 0 14 FEE N/A 0 N/A 0 0 15 FEE N/A 0 N/A 0 0 RESULTING VALUE 12/31/99 10 130.8837 1308.837 1.620808 FORMULA: 1000*(1+T)= 1308.837 = 1266.337 T = 0.156833 R = 0.266337 NLIC VAII AGGRESSIVE EQUITY 05/03/99 TO NO. YEARS 0.66256 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES - INIT DEPOSIT 05/03/99 1000 6.918119 144.548 1 FEE 12/31/99 0 10 0 0.06 2 FEE N/A 0 N/A 0 0.05 3 FEE N/A 0 N/A 0 0.05 4 N/A 0 N/A 0 0.04 5 N/A 0 N/A 0 0.03 6 N/A 0 N/A 0 0.02 7 N/A 0 N/A 0 0 8 N/A 0 N/A 0 0 9 N/A 0 N/A 0 0 10 N/A 0 N/A 0 0 11 N/A 0 N/A 0 0 12 N/A 0 N/A 0 0 13 N/A 0 N/A 0 0 14 FEE N/A 0 N/A 0 0 15 FEE N/A 0 N/A 0 0 RESULTING VALUE 12/31/99 10 144.548 1445.48 0.66256 FORMULA: 1000*(1+T)= 1445.48 = 1394.48 T = 0.651813 R = 0.39448 NLIC VAII SHORT TERM BOND 05/03/99 TO NO. YEARS 0.66256 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES - INIT DEPOSIT 05/03/99 1000 9.951134 100.4911 1 FEE 12/31/99 0 10 0 0.06 2 FEE N/A 0 N/A 0 0.05 3 FEE N/A 0 N/A 0 0.05 4 N/A 0 N/A 0 0.04 5 N/A 0 N/A 0 0.03 6 N/A 0 N/A 0 0.02 7 N/A 0 N/A 0 0 8 N/A 0 N/A 0 0 9 N/A 0 N/A 0 0 10 N/A 0 N/A 0 0 11 N/A 0 N/A 0 0 12 N/A 0 N/A 0 0 13 N/A 0 N/A 0 0 14 FEE N/A 0 N/A 0 0 15 FEE N/A 0 N/A 0 0 RESULTING VALUE 12/31/99 10 100.4911 1004.911 0.66256 FORMULA: 1000*(1+T)= 1004.911 = 953.9106 T = -0.06874 R = -0.04609 Alliance Premier Growth 07/14/99 TO NO. YEARS 0.465435 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES - INIT DEPOSIT 07/14/99 1000 8.907261 112.268 1 FEE 12/31/99 0 10 0 0.06 2 FEE N/A 0 N/A 0 0.05 3 FEE N/A 0 N/A 0 0.05 4 N/A 0 N/A 0 0.04 5 N/A 0 N/A 0 0.03 6 N/A 0 N/A 0 0.02 7 N/A 0 N/A 0 0 8 N/A 0 N/A 0 0 9 N/A 0 N/A 0 0 10 N/A 0 N/A 0 0 11 N/A 0 N/A 0 0 12 N/A 0 N/A 0 0 13 N/A 0 N/A 0 0 14 FEE N/A 0 N/A 0 0 15 FEE N/A 0 N/A 0 0 RESULTING VALUE 12/31/99 10 112.268 1122.68 0.465435 FORMULA: 1000*(1+T)= 1122.68 = 1071.68 T = 0.160367 R = 0.07168 Alliance Growth 09/15/94 TO NO. YEARS 5.292266 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES - INIT DEPOSIT 09/15/94 1000 2.640709 378.6862 1 FEE 09/15/95 0 2.767911 0 0.06 2 FEE 09/15/96 0 3.685042 0 0.05 3 FEE 09/15/97 0 4.660153 0 0.05 4 09/15/98 0 5.96361 0 0.04 5 09/15/99 0 7.555681 0 0.03 6 12/31/99 0 10 0 0.02 7 N/A 0 N/A 0 0 8 N/A 0 N/A 0 0 9 N/A 0 N/A 0 0 10 N/A 0 N/A 0 0 11 N/A 0 N/A 0 0 12 N/A 0 N/A 0 0 13 N/A 0 N/A 0 0 14 FEE N/A 0 N/A 0 0 15 FEE N/A 0 N/A 0 0 RESULTING VALUE 12/31/99 10 378.6862 3786.862 5.292266 FORMULA: 1000*(1+T)= 3786.862 = 3769.862 T = 0.28499 R = 2.769862 Alliance Growth and Income 01/14/91 TO NO. YEARS 8.960986 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES - INIT DEPOSIT 01/14/91 1000 3.173139 315.1453 1 FEE 01/14/92 0 3.234479 0 0.06 2 FEE 01/14/93 0 3.436258 0 0.05 3 FEE 01/14/94 0 3.777962 0 0.05 4 01/14/95 0 3.705287 0 0.04 5 01/14/96 0 4.952505 0 0.03 6 01/14/97 0 6.048616 0 0.02 7 01/14/98 0 7.667529 0 0 8 01/14/99 0 9.123075 0 0 9 12/31/99 0 10 0 0 10 N/A 0 N/A 0 0 11 N/A 0 N/A 0 0 12 N/A 0 N/A 0 0 13 N/A 0 N/A 0 0 14 FEE N/A 0 N/A 0 0 15 FEE N/A 0 N/A 0 0 RESULTING VALUE 12/31/99 10 315.1453 3151.453 8.960986 FORMULA: 1000*(1+T)= 3151.453 = 3151.453 T = 0.136662 R = 2.151453 Aim Cap App 05/05/93 TO NO. YEARS 6.655715 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES - INIT DEPOSIT 05/05/93 1000 2.991294 334.3035 1 FEE 05/05/94 0 3.520954 0 0.06 2 FEE 05/05/95 0 3.918423 0 0.05 3 FEE 05/05/96 0 5.292593 0 0.05 4 05/05/97 0 5.538535 0 0.04 5 05/05/98 0 6.978315 0 0.03 6 05/05/99 0 7.209373 0 0.02 7 12/31/99 0 10 0 0 8 N/A 0 N/A 0 0 9 N/A 0 N/A 0 0 10 N/A 0 N/A 0 0 11 N/A 0 N/A 0 0 12 N/A 0 N/A 0 0 13 N/A 0 N/A 0 0 14 FEE N/A 0 N/A 0 0 15 FEE N/A 0 N/A 0 0 RESULTING VALUE 12/31/99 10 334.3035 3343.035 6.655715 FORMULA: 1000*(1+T)= 3343.035 = 3343.035 T = 0.19881 R = 2.343035 Aim Growth 05/05/93 TO NO. YEARS 6.655715 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES - INIT DEPOSIT 05/05/93 1000 3.016282 331.534 1 FEE 05/05/94 0 3.163393 0 0.06 2 FEE 05/05/95 0 3.529815 0 0.05 3 FEE 05/05/96 0 4.449399 0 0.05 4 05/05/97 0 5.229369 0 0.04 5 05/05/98 0 7.028539 0 0.03 6 05/05/99 0 8.008517 0 0.02 7 12/31/99 0 10 0 0 8 N/A 0 N/A 0 0 9 N/A 0 N/A 0 0 10 N/A 0 N/A 0 0 11 N/A 0 N/A 0 0 12 N/A 0 N/A 0 0 13 N/A 0 N/A 0 0 14 FEE N/A 0 N/A 0 0 15 FEE N/A 0 N/A 0 0 RESULTING VALUE 12/31/99 10 331.534 3315.34 6.655715 FORMULA: 1000*(1+T)= 3315.34 = 3315.34 T = 0.197313 R = 2.31534 Aim Value 05/05/93 TO NO. YEARS 6.655715 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES - INIT DEPOSIT 05/05/93 1000 2.932605 340.9937 1 FEE 05/05/94 0 3.400915 0 0.06 2 FEE 05/05/95 0 3.838173 0 0.05 3 FEE 05/05/96 0 4.615976 0 0.05 4 05/05/97 0 5.54386 0 0.04 5 05/05/98 0 7.117914 0 0.03 6 05/05/99 0 8.502378 0 0.02 7 12/31/99 0 10 0 0 8 N/A 0 N/A 0 0 9 N/A 0 N/A 0 0 10 N/A 0 N/A 0 0 11 N/A 0 N/A 0 0 12 N/A 0 N/A 0 0 13 N/A 0 N/A 0 0 14 FEE N/A 0 N/A 0 0 15 FEE N/A 0 N/A 0 0 RESULTING VALUE 12/31/99 10 340.9937 3409.937 6.655715 FORMULA: 1000*(1+T)= 3409.937 = 3409.937 T = 0.202385 R = 2.409937 Putnam International Growth 01/02/97 TO NO. YEARS 2.992471 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES - INIT DEPOSIT 01/02/97 1000 4.770193 209.6351 1 FEE 01/02/98 0 5.472447 0 0.06 2 FEE 01/02/99 0 6.348516 0 0.05 3 FEE 12/31/99 0 10 0 0.05 4 N/A 0 N/A 0 0.04 5 N/A 0 N/A 0 0.03 6 N/A 0 N/A 0 0.02 7 N/A 0 N/A 0 0 8 N/A 0 N/A 0 0 9 N/A 0 N/A 0 0 10 N/A 0 N/A 0 0 11 N/A 0 N/A 0 0 12 N/A 0 N/A 0 0 13 N/A 0 N/A 0 0 14 FEE N/A 0 N/A 0 0 15 FEE N/A 0 N/A 0 0 RESULTING VALUE 12/31/99 10 209.6351 2096.351 2.992471 FORMULA: 1000*(1+T)= 2096.351 = 2053.851 T = 0.271897 R = 1.053851 Putnam Voyager 12/30/89 TO NO. YEARS 10 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/89 1000 1.587327 629.9899 FEE 12/31/90 0 1.528278 0 FEE 12/31/91 0 2.194171 0 FEE 12/31/92 0 2.379707 0 FEE 12/31/93 0 2.776007 0 FEE 12/31/94 0 2.756446 0 FEE 12/31/95 0 3.810702 0 FEE 12/31/96 0 4.230652 0 FEE 12/31/97 0 5.260125 0 FEE 12/31/98 0 6.429676 0 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 629.9899 6299.899 10 FORMULA: 1000*(1+T)= 6299.899 - (0.85 * 1000 * 0) = 6299.899 T = 0.20208 R = 5.299899 Putnam Growth & Income 12/30/89 TO NO. YEARS 10 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/89 1000 3.208666 311.656 FEE 12/31/90 0 3.215172 0 FEE 12/31/91 0 3.761527 0 FEE 12/31/92 0 4.05718 0 FEE 12/31/93 0 4.555997 0 FEE 12/31/94 0 4.493022 0 FEE 12/31/95 0 6.036663 0 FEE 12/31/96 0 7.232874 0 FEE 12/31/97 0 8.824721 0 FEE 12/31/98 0 10.01383 0 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 311.656 3116.56 10 FORMULA: 1000*(1+T)= 3116.56 - (0.85 * 1000 * 0) = 3116.56 T = 0.120386 R = 2.11656 MSDW Mid Cap 01/02/97 TO NO. YEARS 2.992471 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES - INIT DEPOSIT 01/02/97 1000 5.468267 182.8733 1 FEE 01/02/98 0 7.550815 0 0.06 2 FEE 01/02/99 0 8.385094 0 0.05 3 FEE 12/31/99 0 10 0 0.05 4 N/A 0 N/A 0 0.04 5 N/A 0 N/A 0 0.03 6 N/A 0 N/A 0 0.02 7 N/A 0 N/A 0 0 8 N/A 0 N/A 0 0 9 N/A 0 N/A 0 0 10 N/A 0 N/A 0 0 11 N/A 0 N/A 0 0 12 N/A 0 N/A 0 0 13 N/A 0 N/A 0 0 14 FEE N/A 0 N/A 0 0 15 FEE N/A 0 N/A 0 0 RESULTING VALUE 12/31/99 10 182.8733 1828.733 2.992471 FORMULA: 1000*(1+T)= 1828.733 = 1786.233 T = 0.213922 R = 0.786233 Income Benefit Standardized None Income Benefit Non Standardized None Income Benefit Adjusted Historical - 1 Year Variable Sub-Account NLIC VAII MONEY MARKET 12/31/98 NO. YEARS 1 TO 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/98 1000 9.702433 103.0669 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 103.0669 1030.669 1 FORMULA: 1000*(1+T)= 1030.669 - (0.85 * 1000 * 0.05) = 988.1693 T = -0.01183 R = -0.01183 NLIC VAII HIGH YIELD 12/31/98 NO. YEARS 1 TO 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/98 1000 10.30357 97.05372 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 97.05372 970.5372 1 FORMULA: 1000*(1+T)= 970.5372 - (0.85 * 1000 * 0.05) = 928.0372 T = -0.07196 R = -0.07196 NLIC VAII EQUITY 12/31/98 NO. YEARS 1 TO 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/98 1000 6.410235 156.0005 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 156.0005 1560.005 1 FORMULA: 1000*(1+T)= 1560.005 - (0.85 * 1000 * 0.05) = 1517.505 T = 0.517505 R = 0.517505 NLIC VAII QUALITY INCOME 12/31/98 NO. YEARS 1 TO 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/98 1000 10.62497 94.11795 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 94.11795 941.1795 1 FORMULA: 1000*(1+T)= 941.1795 - (0.85 * 1000 * 0.05) = 898.6795 T = -0.10132 R = -0.10132 NLIC VAII STRATEGIST 12/31/98 NO. YEARS 1 TO 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/98 1000 8.663139 115.4316 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 115.4316 1154.316 1 FORMULA: 1000*(1+T)= 1154.316 - (0.85 * 1000 * 0.05) = 1111.816 T = 0.111816 R = 0.111816 NLIC VAII DIVIDEND GROWTH 12/31/98 NO. YEARS 1 TO 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/98 1000 10.41542 96.01152 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 96.01152 960.1152 1 FORMULA: 1000*(1+T)= 960.1152 - (0.85 * 1000 * 0.05) = 917.6152 T = -0.08238 R = -0.08238 NLIC VAII UTILITIES 12/31/98 NO. YEARS 1 TO 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/98 1000 9.019454 110.8715 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 110.8715 1108.715 1 FORMULA: 1000*(1+T)= 1108.715 - (0.85 * 1000 * 0.05) = 1066.215 T = 0.066215 R = 0.066215 NLIC VAII EUROPEAN GROWTH 12/31/98 NO. YEARS 1 TO 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/98 1000 7.873874 127.0023 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 127.0023 1270.023 1 FORMULA: 1000*(1+T)= 1270.023 - (0.85 * 1000 * 0.05) = 1227.523 T = 0.227523 R = 0.227523 NLIC VAII CAPITAL GROWTH 12/31/98 NO. YEARS 1 TO 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/98 1000 7.626781 131.1169 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 131.1169 1311.169 1 FORMULA: 1000*(1+T)= 1311.169 - (0.85 * 1000 * 0.05) = 1268.669 T = 0.268669 R = 0.268669 NLIC VAII PACIFIC GROWTH 12/31/98 NO. YEARS 1 TO 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/98 1000 6.120635 163.3817 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 163.3817 1633.817 1 FORMULA: 1000*(1+T)= 1633.817 - (0.85 * 1000 * 0.05) = 1591.317 T = 0.591317 R = 0.591317 NLIC VAII GLOBAL DIVIDEND GROWTH 12/31/98 NO. YEARS 1 TO 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/98 1000 8.867047 112.7771 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 112.7771 1127.771 1 FORMULA: 1000*(1+T)= 1127.771 - (0.85 * 1000 * 0.05) = 1085.271 T = 0.085271 R = 0.085271 NLIC VAII CAPITAL APPRECIATION 12/31/98 NO. YEARS 1 TO 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/98 1000 10.14945 98.52752 FEE 12/31/99 0 10.87141 0 RESULTING VALUE 12/31/99 10.87141 98.52752 1071.133 1 FORMULA: 1000*(1+T)= 1071.133 - (0.85 * 1000 * 0.05) = 1028.633 T = 0.028633 R = 0.028633 NLIC VAII INCOME BUILDER 12/31/98 NO. YEARS 1 TO 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/98 1000 9.49562 105.3117 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 105.3117 1053.117 1 FORMULA: 1000*(1+T)= 1053.117 - (0.85 * 1000 * 0.05) = 1010.617 T = 0.010617 R = 0.010617 NLIC VAII EQUITY GROWTH 12/31/98 NO. YEARS 1 TO 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/98 1000 7.290266 137.1692 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 137.1692 1371.692 1 FORMULA: 1000*(1+T)= 1371.692 - (0.85 * 1000 * 0.05) = 1329.192 T = 0.329192 R = 0.329192 NLIC VAII INTERNATIONAL MAGNUM 12/31/98 NO. YEARS 1 TO 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/98 1000 8.12048 123.1454 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 123.1454 1231.454 1 FORMULA: 1000*(1+T)= 1231.454 - (0.85 * 1000 * 0.05) = 1188.954 T = 0.188954 R = 0.188954 NLIC VAII EMERGING MARKETS 12/31/98 NO. YEARS 1 TO 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/98 1000 5.221365 191.5208 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 191.5208 1915.208 1 FORMULA: 1000*(1+T)= 1915.208 - (0.85 * 1000 * 0.05) = 1872.708 T = 0.872708 R = 0.872708 NLIC VAII EMERGING GROWTH 12/31/98 NO. YEARS 1 TO 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/98 1000 11.99735 83.35171 FEE 12/31/99 0 24.19191 0 RESULTING VALUE 12/31/99 24.19191 83.35171 2016.437 1 FORMULA: 1000*(1+T)= 2016.437 - (0.85 * 1000 * 0.05) = 1973.937 T = 0.973937 R = 0.973937 NLIC VAII REAL ESTATE 12/31/98 NO. YEARS 1 TO 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/98 1000 10.31825 96.9157 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 96.9157 969.157 1 FORMULA: 1000*(1+T)= 969.157 - (0.85 * 1000 * 0.05) = 926.657 T = -0.07334 R = -0.07334 NLIC VAII COMPETITIVE EDGE 12/31/98 NO. YEARS 1 TO 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/98 1000 8.062275 124.0345 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 124.0345 1240.345 1 FORMULA: 1000*(1+T)= 1240.345 - (0.85 * 1000 * 0.05) = 1197.845 T = 0.197845 R = 0.197845 NLIC VAII S&P 500 INDEX 12/31/98 NO. YEARS 1 TO 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/98 1000 8.493296 117.7399 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 117.7399 1177.399 1 FORMULA: 1000*(1+T)= 1177.399 - (0.85 * 1000 * 0.05) = 1134.899 T = 0.134899 R = 0.134899 NLIC VAII AGGRESSIVE EQUITY 12/31/98 NO. YEARS 1 TO 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/98 1000 #VALUE! #VALUE! FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 #VALUE! #VALUE! 1 FORMULA: 1000*(1+T)= #VALUE! - (0.85 * 1000 * 0.05) = #VALUE! T = N/A R = N/A NLIC VAII SHORT TERM BOND 12/31/98 NO. YEARS 1 TO 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/98 1000 #VALUE! #VALUE! FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 #VALUE! #VALUE! 1 FORMULA: 1000*(1+T)= #VALUE! - (0.85 * 1000 * 0.05) = #VALUE! T = N/A R = N/A Alliance Premier Growth 12/31/98 NO. YEARS 1 TO 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/98 1000 #VALUE! #VALUE! FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 #VALUE! #VALUE! 1 FORMULA: 1000*(1+T)= #VALUE! - (0.85 * 1000 * 0.05) = #VALUE! T = N/A R = N/A Alliance Growth 12/31/98 NO. YEARS 1 TO 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/98 1000 7.560212 132.2714 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 132.2714 1322.714 1 FORMULA: 1000*(1+T)= 1322.714 - (0.85 * 1000 * 0.05) = 1280.214 T = 0.280214 R = 0.280214 Alliance Growth and Income 12/31/98 NO. YEARS 1 TO 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/98 1000 9.12855 109.5464 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 109.5464 1095.464 1 FORMULA: 1000*(1+T)= 1095.464 - (0.85 * 1000 * 0.05) = 1052.964 T = 0.052964 R = 0.052964 Aim Cap App 12/31/98 NO. YEARS 1 TO 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/98 1000 7.02985 142.2505 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 142.2505 1422.505 1 FORMULA: 1000*(1+T)= 1422.505 - (0.85 * 1000 * 0.05) = 1380.005 T = 0.380005 R = 0.380005 Aim Growth 12/31/98 NO. YEARS 1 TO 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/98 1000 7.517407 133.0246 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 133.0246 1330.246 1 FORMULA: 1000*(1+T)= 1330.246 - (0.85 * 1000 * 0.05) = 1287.746 T = 0.287746 R = 0.287746 Aim Value 12/31/98 NO. YEARS 1 TO 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/98 1000 7.826321 127.7739 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 127.7739 1277.739 1 FORMULA: 1000*(1+T)= 1277.739 - (0.85 * 1000 * 0.05) = 1235.239 T = 0.235239 R = 0.235239 Putnam International Growth 12/31/98 NO. YEARS 1 TO 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/98 1000 6.352308 157.4231 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 157.4231 1574.231 1 FORMULA: 1000*(1+T)= 1574.231 - (0.85 * 1000 * 0.05) = 1531.731 T = 0.531731 R = 0.531731 Putnam Voyager 12/31/98 NO. YEARS 1 TO 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/98 1000 6.433524 155.4358 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 155.4358 1554.358 1 FORMULA: 1000*(1+T)= 1554.358 - (0.85 * 1000 * 0.05) = 1511.858 T = 0.511858 R = 0.511858 Putnam Growth & Income 12/31/98 NO. YEARS 1 TO 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/98 1000 10.01985 99.80193 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 99.80193 998.0193 1 FORMULA: 1000*(1+T)= 998.0193 - (0.85 * 1000 * 0.05) = 955.5193 T = -0.04448 R = -0.04448 MSDW Mid Cap 12/31/98 NO. YEARS 1 TO 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/98 1000 8.430177 118.6215 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 118.6215 1186.215 1 FORMULA: 1000*(1+T)= 1186.215 - (0.85 * 1000 * 0.05) = 1143.715 T = 0.143715 R = 0.143715 Income Benefit Adjusted Historical - 5 Years 01/00/00 NLIC VAII MONEY MARKET 12/30/94 TO NO. YEARS 5 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/94 1000 8.435346 118.5488 FEE 12/31/95 0 8.762972 0 FEE 12/31/96 0 9.05951 0 FEE 12/31/97 0 9.377759 0 FEE 12/31/98 0 9.702433 0 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 118.5488 1185.488 5 FORMULA: 1000*(1+T)= 1185.488 - (0.85 * 1000 * 0.02) = 1168.488 T = 0.031632 R = 0.168488 NLIC VAII HIGH YIELD 12/30/94 TO NO. YEARS 5 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/94 1000 8.167223 122.4406 FEE 12/31/95 0 9.214539 0 FEE 12/31/96 0 10.14878 0 FEE 12/31/97 0 11.16732 0 FEE 12/31/98 0 10.30357 0 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 122.4406 1224.406 5 FORMULA: 1000*(1+T)= 1224.406 - (0.85 * 1000 * 0.02) = 1207.406 T = 0.038414 R = 0.207406 NLIC VAII EQUITY 12/30/94 TO NO. YEARS 5 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/94 1000 2.358899 423.9266 FEE 12/31/95 0 3.34382 0 FEE 12/31/96 0 3.695366 0 FEE 12/31/97 0 4.995631 0 FEE 12/31/98 0 6.410235 0 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 423.9266 4239.266 5 FORMULA: 1000*(1+T)= 4239.266 - (0.85 * 1000 * 0.02) = 4222.266 T = 0.333857 R = 3.222266 NLIC VAII QUALITY INCOME 12/30/94 TO NO. YEARS 5 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/94 1000 7.425015 134.6799 FEE 12/31/95 0 9.104819 0 FEE 12/31/96 0 9.094462 0 FEE 12/31/97 0 9.939863 0 FEE 12/31/98 0 10.62497 0 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 134.6799 1346.799 5 FORMULA: 1000*(1+T)= 1346.799 - (0.85 * 1000 * 0.02) = 1329.799 T = 0.058662 R = 0.329799 NLIC VAII STRATEGIST 12/30/94 TO NO. YEARS 5 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/94 1000 5.11494 195.5057 FEE 12/31/95 0 5.499513 0 FEE 12/31/96 0 6.221723 0 FEE 12/31/97 0 6.959534 0 FEE 12/31/98 0 8.663139 0 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 195.5057 1955.057 5 FORMULA: 1000*(1+T)= 1955.057 - (0.85 * 1000 * 0.02) = 1938.057 T = 0.141493 R = 0.938057 NLIC VAII DIVIDEND GROWTH 12/30/94 TO NO. YEARS 5 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/94 1000 4.610137 216.9133 FEE 12/31/95 0 6.150912 0 FEE 12/31/96 0 7.499433 0 FEE 12/31/97 0 9.265754 0 FEE 12/31/98 0 10.41542 0 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 216.9133 2169.133 5 FORMULA: 1000*(1+T)= 2169.133 - (0.85 * 1000 * 0.02) = 2152.133 T = 0.165665 R = 1.152133 NLIC VAII UTILITIES 12/30/94 TO NO. YEARS 5 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/94 1000 4.382549 228.1777 FEE 12/31/95 0 5.541733 0 FEE 12/31/96 0 5.923716 0 FEE 12/31/97 0 7.408985 0 FEE 12/31/98 0 9.019454 0 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 228.1777 2281.777 5 FORMULA: 1000*(1+T)= 2281.777 - (0.85 * 1000 * 0.02) = 2264.777 T = 0.17762 R = 1.264777 NLIC VAII EUROPEAN GROWTH 12/30/94 TO NO. YEARS 5 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/94 1000 3.576413 279.6097 FEE 12/31/95 0 4.423098 0 FEE 12/31/96 0 5.655164 0 FEE 12/31/97 0 6.457328 0 FEE 12/31/98 0 7.873874 0 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 279.6097 2796.097 5 FORMULA: 1000*(1+T)= 2796.097 - (0.85 * 1000 * 0.02) = 2779.097 T = 0.22682 R = 1.779097 NLIC VAII CAPITAL GROWTH 12/30/94 TO NO. YEARS 5 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/94 1000 3.670066 272.4746 FEE 12/31/95 0 4.822219 0 FEE 12/31/96 0 5.290555 0 FEE 12/31/97 0 6.481128 0 FEE 12/31/98 0 7.626781 0 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 272.4746 2724.746 5 FORMULA: 1000*(1+T)= 2724.746 - (0.85 * 1000 * 0.02) = 2707.746 T = 0.220455 R = 1.707746 NLIC VAII PACIFIC GROWTH 12/30/94 TO NO. YEARS 5 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/94 1000 10.55957 94.70083 FEE 12/31/95 0 11.09119 0 FEE 12/31/96 0 11.33277 0 FEE 12/31/97 0 6.944655 0 FEE 12/31/98 0 6.120635 0 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 94.70083 947.0083 5 FORMULA: 1000*(1+T)= 947.0083 - (0.85 * 1000 * 0.02) = 930.0083 T = -0.01441 R = -0.06999 NLIC VAII GLOBAL DIVIDEND GROWTH 12/30/94 TO NO. YEARS 5 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/94 1000 5.226404 191.3361 FEE 12/31/95 0 6.284919 0 FEE 12/31/96 0 7.268717 0 FEE 12/31/97 0 8.010581 0 FEE 12/31/98 0 8.867047 0 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 191.3361 1913.361 5 FORMULA: 1000*(1+T)= 1913.361 - (0.85 * 1000 * 0.02) = 1896.361 T = 0.136539 R = 0.896361 NLIC VAII CAPITAL APPRECIATION 12/30/94 TO NO. YEARS 5 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/94 1000 #VALUE! #VALUE! FEE 12/31/95 0 #VALUE! #VALUE! FEE 12/31/96 0 #VALUE! #VALUE! FEE 12/31/97 0 11.17696 0 FEE 12/31/98 0 10.14945 0 FEE 12/31/99 0 10.87141 0 RESULTING VALUE 12/31/99 10.87141 #VALUE! #VALUE! 5 FORMULA: 1000*(1+T)= #VALUE! - (0.85 * 1000 * 0.02) = #VALUE! T = N/A R = N/A NLIC VAII INCOME BUILDER 12/30/94 TO NO. YEARS 5 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/94 1000 #VALUE! #VALUE! FEE 12/31/95 0 #VALUE! #VALUE! FEE 12/31/96 0 #VALUE! #VALUE! FEE 12/31/97 0 9.35297 0 FEE 12/31/98 0 9.49562 0 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 #VALUE! #VALUE! 5 FORMULA: 1000*(1+T)= #VALUE! - (0.85 * 1000 * 0.02) = #VALUE! T = N/A R = N/A NLIC VAII EQUITY GROWTH 12/30/94 TO NO. YEARS 5 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/94 1000 #VALUE! #VALUE! FEE 12/31/95 0 #VALUE! #VALUE! FEE 12/31/96 0 #VALUE! #VALUE! FEE 12/31/97 0 6.212952 0 FEE 12/31/98 0 7.290266 0 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 #VALUE! #VALUE! 5 FORMULA: 1000*(1+T)= #VALUE! - (0.85 * 1000 * 0.02) = #VALUE! T = N/A R = N/A NLIC VAII INTERNATIONAL MAGNUM 12/30/94 TO NO. YEARS 5 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/94 1000 #VALUE! #VALUE! FEE 12/31/95 0 #VALUE! #VALUE! FEE 12/31/96 0 #VALUE! #VALUE! FEE 12/31/97 0 7.60365 0 FEE 12/31/98 0 8.12048 0 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 #VALUE! #VALUE! 5 FORMULA: 1000*(1+T)= #VALUE! - (0.85 * 1000 * 0.02) = #VALUE! T = N/A R = N/A NLIC VAII EMERGING MARKETS 12/30/94 TO NO. YEARS 5 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/94 1000 #VALUE! #VALUE! FEE 12/31/95 0 #VALUE! #VALUE! FEE 12/31/96 0 7.132129 0 FEE 12/31/97 0 7.037006 0 FEE 12/31/98 0 5.221365 0 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 #VALUE! #VALUE! 5 FORMULA: 1000*(1+T)= #VALUE! - (0.85 * 1000 * 0.02) = #VALUE! T = N/A R = N/A NLIC VAII EMERGING GROWTH 12/30/94 TO NO. YEARS 5 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/94 1000 #VALUE! #VALUE! FEE 12/31/95 0 6.465775 0 FEE 12/31/96 0 7.440492 0 FEE 12/31/97 0 8.840074 0 FEE 12/31/98 0 11.99735 0 FEE 12/31/99 0 24.19191 0 RESULTING VALUE 12/31/99 24.19191 #VALUE! #VALUE! 5 FORMULA: 1000*(1+T)= #VALUE! - (0.85 * 1000 * 0.02) = #VALUE! T = N/A R = N/A NLIC VAII REAL ESTATE 12/30/94 TO NO. YEARS 5 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/94 1000 #VALUE! #VALUE! FEE 12/31/95 0 #VALUE! #VALUE! FEE 12/31/96 0 #VALUE! #VALUE! FEE 12/31/97 0 12.0493 0 FEE 12/31/98 0 10.31825 0 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 #VALUE! #VALUE! 5 FORMULA: 1000*(1+T)= #VALUE! - (0.85 * 1000 * 0.02) = #VALUE! T = N/A R = N/A NLIC VAII COMPETITIVE EDGE 12/30/94 TO NO. YEARS 5 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/94 1000 #VALUE! #VALUE! FEE 12/31/95 0 #VALUE! #VALUE! FEE 12/31/96 0 #VALUE! #VALUE! FEE 12/31/97 0 #VALUE! #VALUE! FEE 12/31/98 0 8.062275 0 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 #VALUE! #VALUE! 5 FORMULA: 1000*(1+T)= #VALUE! - (0.85 * 1000 * 0.02) = #VALUE! T = N/A R = N/A NLIC VAII S&P 500 INDEX 12/30/94 TO NO. YEARS 5 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/94 1000 #VALUE! #VALUE! FEE 12/31/95 0 #VALUE! #VALUE! FEE 12/31/96 0 #VALUE! #VALUE! FEE 12/31/97 0 #VALUE! #VALUE! FEE 12/31/98 0 8.493296 0 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 #VALUE! #VALUE! 5 FORMULA: 1000*(1+T)= #VALUE! - (0.85 * 1000 * 0.02) = #VALUE! T = N/A R = N/A NLIC VAII AGGRESSIVE EQUITY 12/30/94 TO NO. YEARS 5 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/94 1000 #VALUE! #VALUE! FEE 12/31/95 0 #VALUE! #VALUE! FEE 12/31/96 0 #VALUE! #VALUE! FEE 12/31/97 0 #VALUE! #VALUE! FEE 12/31/98 0 #VALUE! #VALUE! FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 #VALUE! #VALUE! 5 FORMULA: 1000*(1+T)= #VALUE! - (0.85 * 1000 * 0.02) = #VALUE! T = N/A R = N/A NLIC VAII SHORT TERM BOND 12/30/94 TO NO. YEARS 5 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/94 1000 #VALUE! #VALUE! FEE 12/31/95 0 #VALUE! #VALUE! FEE 12/31/96 0 #VALUE! #VALUE! FEE 12/31/97 0 #VALUE! #VALUE! FEE 12/31/98 0 #VALUE! #VALUE! FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 #VALUE! #VALUE! 5 FORMULA: 1000*(1+T)= #VALUE! - (0.85 * 1000 * 0.02) = #VALUE! T = N/A R = N/A Alliance Premier Growth 12/30/94 TO NO. YEARS 5 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/94 1000 #VALUE! #VALUE! FEE 12/31/95 0 #VALUE! #VALUE! FEE 12/31/96 0 #VALUE! #VALUE! FEE 12/31/97 0 #VALUE! #VALUE! FEE 12/31/98 0 #VALUE! #VALUE! FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 #VALUE! #VALUE! 5 FORMULA: 1000*(1+T)= #VALUE! - (0.85 * 1000 * 0.02) = #VALUE! T = N/A R = N/A Alliance Growth 12/30/94 TO NO. YEARS 5 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/94 1000 2.77619 360.2059 FEE 12/31/95 0 3.693891 0 FEE 12/31/96 0 4.668544 0 FEE 12/31/97 0 5.970766 0 FEE 12/31/98 0 7.560212 0 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 360.2059 3602.059 5 FORMULA: 1000*(1+T)= 3602.059 - (0.85 * 1000 * 0.02) = 3585.059 T = 0.29092 R = 2.585059 Alliance Growth and Income 12/30/94 TO NO. YEARS 5 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/94 1000 3.716368 269.0799 FEE 12/31/95 0 4.9644 0 FEE 12/31/96 0 6.059509 0 FEE 12/31/97 0 7.676732 0 FEE 12/31/98 0 9.12855 0 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 269.0799 2690.799 5 FORMULA: 1000*(1+T)= 2690.799 - (0.85 * 1000 * 0.02) = 2673.799 T = 0.217379 R = 1.673799 Aim Cap App 12/30/94 TO NO. YEARS 5 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/94 1000 3.579226 279.39 FEE 12/31/95 0 4.777301 0 FEE 12/31/96 0 5.524803 0 FEE 12/31/97 0 6.168322 0 FEE 12/31/98 0 7.02985 0 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 279.39 2793.9 5 FORMULA: 1000*(1+T)= 2793.9 - (0.85 * 1000 * 0.02) = 2776.9 T = 0.226626 R = 1.7769 Aim Growth 12/30/94 TO NO. YEARS 5 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/94 1000 3.180169 314.4487 FEE 12/31/95 0 4.215957 0 FEE 12/31/96 0 4.896731 0 FEE 12/31/97 0 6.110797 0 FEE 12/31/98 0 7.517407 0 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 314.4487 3144.487 5 FORMULA: 1000*(1+T)= 3144.487 - (0.85 * 1000 * 0.02) = 3127.487 T = 0.256143 R = 2.127487 Aim Value 12/30/94 TO NO. YEARS 5 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/94 1000 3.422449 292.1884 FEE 12/31/95 0 4.586981 0 FEE 12/31/96 0 5.189307 0 FEE 12/31/97 0 6.3136 0 FEE 12/31/98 0 7.826321 0 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 292.1884 2921.884 5 FORMULA: 1000*(1+T)= 2921.884 - (0.85 * 1000 * 0.02) = 2904.884 T = 0.23773 R = 1.904884 Putnam International Growth 12/30/94 TO NO. YEARS 5 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/94 1000 #VALUE! #VALUE! FEE 12/31/95 0 #VALUE! #VALUE! FEE 12/31/96 0 #VALUE! #VALUE! FEE 12/31/97 0 5.450906 0 FEE 12/31/98 0 6.352308 0 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 #VALUE! #VALUE! 5 FORMULA: 1000*(1+T)= #VALUE! - (0.85 * 1000 * 0.02) = #VALUE! T = N/A R = N/A Putnam Voyager 12/30/94 TO NO. YEARS 5 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/94 1000 2.76472 361.7003 FEE 12/31/95 0 3.81985 0 FEE 12/31/96 0 4.238264 0 FEE 12/31/97 0 5.266429 0 FEE 12/31/98 0 6.433524 0 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 361.7003 3617.003 5 FORMULA: 1000*(1+T)= 3617.003 - (0.85 * 1000 * 0.02) = 3600.003 T = 0.291994 R = 2.600003 Putnam Growth & Income 12/30/94 TO NO. YEARS 5 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/94 1000 4.506515 221.901 FEE 12/31/95 0 6.051164 0 FEE 12/31/96 0 7.245901 0 FEE 12/31/97 0 8.835318 0 FEE 12/31/98 0 10.01985 0 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 221.901 2219.01 5 FORMULA: 1000*(1+T)= 2219.01 - (0.85 * 1000 * 0.02) = 2202.01 T = 0.171019 R = 1.20201 MSDW Mid Cap 12/30/94 TO NO. YEARS 5 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/94 1000 #VALUE! #VALUE! FEE 12/31/95 0 #VALUE! #VALUE! FEE 12/31/96 0 #VALUE! #VALUE! FEE 12/31/97 0 7.594752 0 FEE 12/31/98 0 8.430177 0 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 #VALUE! #VALUE! 5 FORMULA: 1000*(1+T)= #VALUE! - (0.85 * 1000 * 0.02) = #VALUE! T = N/A R = N/A Income Benefit Adjusted Historical - 10 Years/Since Inception - NLIC VAII MONEY MARKET 12/31/89 TO NO. YEARS 10 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/89 1000 7.269742 137.5565 FEE 12/31/90 0 7.718359 0 FEE 12/31/91 0 8.028739 0 FEE 12/31/92 0 8.168601 0 FEE 12/31/93 0 8.255827 0 FEE 12/31/94 0 8.435346 0 FEE 12/31/95 0 8.762972 0 FEE 12/31/96 0 9.05951 0 FEE 12/31/97 0 9.377759 0 FEE 12/31/98 0 9.702433 0 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 137.5565 1375.565 10 FORMULA: 1000*(1+T)= 1375.565 - (0.85 * 1000 * 0) = 1375.565 T = 0.0324 R = 0.375565 NLIC VAII HIGH YIELD 12/31/89 TO NO. YEARS 10 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/89 1000 5.31134 188.2764 FEE 12/31/90 0 3.823597 0 FEE 12/31/91 0 5.967047 0 FEE 12/31/92 0 6.951073 0 FEE 12/31/93 0 8.490766 0 FEE 12/31/94 0 8.167223 0 FEE 12/31/95 0 9.214539 0 FEE 12/31/96 0 10.14878 0 FEE 12/31/97 0 11.16732 0 FEE 12/31/98 0 10.30357 0 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 188.2764 1882.764 10 FORMULA: 1000*(1+T)= 1882.764 - (0.85 * 1000 * 0) = 1882.764 T = 0.065319 R = 0.882764 NLIC VAII EQUITY 12/31/89 TO NO. YEARS 10 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/89 1000 1.482063 674.7352 FEE 12/31/90 0 1.404942 0 FEE 12/31/91 0 2.197988 0 FEE 12/31/92 0 2.165394 0 FEE 12/31/93 0 2.549767 0 FEE 12/31/94 0 2.358899 0 FEE 12/31/95 0 3.34382 0 FEE 12/31/96 0 3.695366 0 FEE 12/31/97 0 4.995631 0 FEE 12/31/98 0 6.410235 0 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 674.7352 6747.352 10 FORMULA: 1000*(1+T)= 6747.352 - (0.85 * 1000 * 0) = 6747.352 T = 0.210357 R = 5.747352 NLIC VAII QUALITY INCOME 12/31/89 TO NO. YEARS 10 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/89 1000 5.587585 178.9682 FEE 12/31/90 0 5.873111 0 FEE 12/31/91 0 6.846185 0 FEE 12/31/92 0 7.291608 0 FEE 12/31/93 0 8.104239 0 FEE 12/31/94 0 7.425015 0 FEE 12/31/95 0 9.104819 0 FEE 12/31/96 0 9.094462 0 FEE 12/31/97 0 9.939863 0 FEE 12/31/98 0 10.62497 0 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 178.9682 1789.682 10 FORMULA: 1000*(1+T)= 1789.682 - (0.85 * 1000 * 0) = 1789.682 T = 0.059931 R = 0.789682 NLIC VAII STRATEGIST 12/31/89 TO NO. YEARS 10 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/89 1000 3.462914 288.7741 FEE 12/31/90 0 3.458926 0 FEE 12/31/91 0 4.363926 0 FEE 12/31/92 0 4.603141 0 FEE 12/31/93 0 4.998462 0 FEE 12/31/94 0 5.11494 0 FEE 12/31/95 0 5.499513 0 FEE 12/31/96 0 6.221723 0 FEE 12/31/97 0 6.959534 0 FEE 12/31/98 0 8.663139 0 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 288.7741 2887.741 10 FORMULA: 1000*(1+T)= 2887.741 - (0.85 * 1000 * 0) = 2887.741 T = 0.111875 R = 1.887741 NLIC VAII DIVIDEND GROWTH 03/01/90 TO NO. YEARS 9.83436 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES - INIT DEPOSIT 03/01/90 1000 3.523855 283.7802 1 FEE 03/01/91 0 3.617431 0 0.06 2 FEE 03/01/92 0 4.046598 0 0.05 3 FEE 03/01/93 0 4.431238 0 0.05 4 03/01/94 0 4.752085 0 0.04 5 03/01/95 0 4.878763 0 0.03 6 03/01/96 0 6.519044 0 0.02 7 03/01/97 0 7.776221 0 0 8 03/01/98 0 9.840551 0 0 9 03/01/99 0 10.18538 0 0 10 12/31/99 0 10 0 0 11 N/A 0 N/A 0 0 12 N/A 0 N/A 0 0 13 N/A 0 N/A 0 0 14 FEE N/A 0 N/A 0 0 15 FEE N/A 0 N/A 0 0 RESULTING VALUE 12/31/99 10 283.7802 2837.802 9.83436 FORMULA: 1000*(1+T)= 2837.802 = 2837.802 T = 0.111888 R = 1.837802 NLIC VAII UTILITIES 03/01/90 TO NO. YEARS 9.83436 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES - INIT DEPOSIT 03/01/90 1000 3.174275 315.0325 1 FEE 03/01/91 0 3.377249 0 0.06 2 FEE 03/01/92 0 3.738508 0 0.05 3 FEE 03/01/93 0 4.620269 0 0.05 4 03/01/94 0 4.644984 0 0.04 5 03/01/95 0 4.549225 0 0.03 6 03/01/96 0 5.574947 0 0.02 7 03/01/97 0 5.977266 0 0 8 03/01/98 0 7.612212 0 0 9 03/01/99 0 8.686033 0 0 10 12/31/99 0 10 0 0 11 N/A 0 N/A 0 0 12 N/A 0 N/A 0 0 13 N/A 0 N/A 0 0 14 FEE N/A 0 N/A 0 0 15 FEE N/A 0 N/A 0 0 RESULTING VALUE 12/31/99 10 315.0325 3150.325 9.83436 FORMULA: 1000*(1+T)= 3150.325 = 3150.325 T = 0.123763 R = 2.150325 NLIC VAII EUROPEAN GROWTH 03/01/91 TO NO. YEARS 8.835044 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES - INIT DEPOSIT 03/01/91 1000 2.364843 422.8611 1 FEE 03/01/92 0 2.430043 0 0.06 2 FEE 03/01/93 0 2.525735 0 0.05 3 FEE 03/01/94 0 3.46324 0 0.05 4 03/01/95 0 3.661261 0 0.04 5 03/01/96 0 4.644548 0 0.03 6 03/01/97 0 5.674117 0 0.02 7 03/01/98 0 7.288631 0 0 8 03/01/99 0 7.734122 0 0 9 12/31/99 0 10 0 0 10 N/A 0 N/A 0 0 11 N/A 0 N/A 0 0 12 N/A 0 N/A 0 0 13 N/A 0 N/A 0 0 14 FEE N/A 0 N/A 0 0 15 FEE N/A 0 N/A 0 0 RESULTING VALUE 12/31/99 10 422.8611 4228.611 8.835044 FORMULA: 1000*(1+T)= 4228.611 = 4228.611 T = 0.177271 R = 3.228611 NLIC VAII CAPITAL GROWTH 03/01/91 TO NO. YEARS 8.835044 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES - INIT DEPOSIT 03/01/91 1000 3.278483 305.0191 1 FEE 03/01/92 0 3.968796 0 0.06 2 FEE 03/01/93 0 3.859871 0 0.05 3 FEE 03/01/94 0 3.816481 0 0.05 4 03/01/95 0 3.936663 0 0.04 5 03/01/96 0 5.083421 0 0.03 6 03/01/97 0 5.438084 0 0.02 7 03/01/98 0 7.004955 0 0 8 03/01/99 0 7.568825 0 0 9 12/31/99 0 10 0 0 10 N/A 0 N/A 0 0 11 N/A 0 N/A 0 0 12 N/A 0 N/A 0 0 13 N/A 0 N/A 0 0 14 FEE N/A 0 N/A 0 0 15 FEE N/A 0 N/A 0 0 RESULTING VALUE 12/31/99 10 305.0191 3050.191 8.835044 FORMULA: 1000*(1+T)= 3050.191 = 3050.191 T = 0.134537 R = 2.050191 NLIC VAII PACIFIC GROWTH 02/22/94 TO NO. YEARS 5.853525 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES - INIT DEPOSIT 02/22/94 1000 11.59465 86.24664 1 FEE 02/22/95 0 9.973207 0 0.06 2 FEE 02/22/96 0 11.98766 0 0.05 3 FEE 02/22/97 0 11.44237 0 0.05 4 02/22/98 0 6.973976 0 0.04 5 02/22/99 0 5.892561 0 0.03 6 12/31/99 0 10 0 0.02 7 N/A 0 N/A 0 0 8 N/A 0 N/A 0 0 9 N/A 0 N/A 0 0 10 N/A 0 N/A 0 0 11 N/A 0 N/A 0 0 12 N/A 0 N/A 0 0 13 N/A 0 N/A 0 0 14 FEE N/A 0 N/A 0 0 15 FEE N/A 0 N/A 0 0 RESULTING VALUE 12/31/99 10 86.24664 862.4664 5.853525 FORMULA: 1000*(1+T)= 862.4664 = 845.4664 T = -0.02827 R = -0.15453 NLIC VAII GLOBAL DIVIDEND GROWTH 02/22/94 TO NO. YEARS 5.853525 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES - INIT DEPOSIT 02/22/94 1000 5.295311 188.8463 1 FEE 02/22/95 0 5.267212 0 0.06 2 FEE 02/22/96 0 6.462597 0 0.05 3 FEE 02/22/97 0 7.290314 0 0.05 4 02/22/98 0 8.348906 0 0.04 5 02/22/99 0 8.615576 0 0.03 6 12/31/99 0 10 0 0.02 7 N/A 0 N/A 0 0 8 N/A 0 N/A 0 0 9 N/A 0 N/A 0 0 10 N/A 0 N/A 0 0 11 N/A 0 N/A 0 0 12 N/A 0 N/A 0 0 13 N/A 0 N/A 0 0 14 FEE N/A 0 N/A 0 0 15 FEE N/A 0 N/A 0 0 RESULTING VALUE 12/31/99 10 188.8463 1888.463 5.853525 FORMULA: 1000*(1+T)= 1888.463 = 1871.463 T = 0.113009 R = 0.871463 NLIC VAII CAPITAL APPRECIATION 01/21/97 TO NO. YEARS 2.940452 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES - INIT DEPOSIT 01/21/97 1000 10 100 1 FEE 01/21/98 0 10.95123 0 0.06 2 FEE 01/21/99 0 10.56254 0 0.05 3 FEE 12/31/99 0 10.87141 0 0.05 4 N/A 0 N/A 0 0.04 5 N/A 0 N/A 0 0.03 6 N/A 0 N/A 0 0.02 7 N/A 0 N/A 0 0 8 N/A 0 N/A 0 0 9 N/A 0 N/A 0 0 10 N/A 0 N/A 0 0 11 N/A 0 N/A 0 0 12 N/A 0 N/A 0 0 13 N/A 0 N/A 0 0 14 FEE N/A 0 N/A 0 0 15 FEE N/A 0 N/A 0 0 RESULTING VALUE 12/31/99 10.87141 100 1087.141 2.940452 FORMULA: 1000*(1+T)= 1087.141 = 1044.641 T = 0.014963 R = 0.044641 NLIC VAII INCOME BUILDER 01/21/97 TO NO. YEARS 2.940452 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES - INIT DEPOSIT 01/21/97 1000 7.762026 128.8324 1 FEE 01/21/98 0 9.328213 0 0.06 2 FEE 01/21/99 0 9.577681 0 0.05 3 FEE 12/31/99 0 10 0 0.05 4 N/A 0 N/A 0 0.04 5 N/A 0 N/A 0 0.03 6 N/A 0 N/A 0 0.02 7 N/A 0 N/A 0 0 8 N/A 0 N/A 0 0 9 N/A 0 N/A 0 0 10 N/A 0 N/A 0 0 11 N/A 0 N/A 0 0 12 N/A 0 N/A 0 0 13 N/A 0 N/A 0 0 14 FEE N/A 0 N/A 0 0 15 FEE N/A 0 N/A 0 0 RESULTING VALUE 12/31/99 10 128.8324 1288.324 2.940452 FORMULA: 1000*(1+T)= 1288.324 = 1245.824 T = 0.077614 R = 0.245824 NLIC VAII EQUITY GROWTH 01/02/97 TO NO. YEARS 2.992471 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES - INIT DEPOSIT 01/02/97 1000 4.746743 210.6708 1 FEE 01/02/98 0 6.19776 0 0.06 2 FEE 01/02/99 0 7.256141 0 0.05 3 FEE 12/31/99 0 10 0 0.05 4 N/A 0 N/A 0 0.04 5 N/A 0 N/A 0 0.03 6 N/A 0 N/A 0 0.02 7 N/A 0 N/A 0 0 8 N/A 0 N/A 0 0 9 N/A 0 N/A 0 0 10 N/A 0 N/A 0 0 11 N/A 0 N/A 0 0 12 N/A 0 N/A 0 0 13 N/A 0 N/A 0 0 14 FEE N/A 0 N/A 0 0 15 FEE N/A 0 N/A 0 0 RESULTING VALUE 12/31/99 10 210.6708 2106.708 2.992471 FORMULA: 1000*(1+T)= 2106.708 = 2064.208 T = 0.274036 R = 1.064208 NLIC VAII INTERNATIONAL MAGNUM 01/02/97 TO NO. YEARS 2.992471 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES - INIT DEPOSIT 01/02/97 1000 7.202701 138.8368 1 FEE 01/02/98 0 7.632264 0 0.06 2 FEE 01/02/99 0 8.23581 0 0.05 3 FEE 12/31/99 0 10 0 0.05 4 N/A 0 N/A 0 0.04 5 N/A 0 N/A 0 0.03 6 N/A 0 N/A 0 0.02 7 N/A 0 N/A 0 0 8 N/A 0 N/A 0 0 9 N/A 0 N/A 0 0 10 N/A 0 N/A 0 0 11 N/A 0 N/A 0 0 12 N/A 0 N/A 0 0 13 N/A 0 N/A 0 0 14 FEE N/A 0 N/A 0 0 15 FEE N/A 0 N/A 0 0 RESULTING VALUE 12/31/99 10 138.8368 1388.368 2.992471 FORMULA: 1000*(1+T)= 1388.368 = 1345.868 T = 0.104356 R = 0.345868 NLIC VAII EMERGING MARKETS 10/01/96 TO NO. YEARS 3.247091 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES - INIT DEPOSIT 10/01/96 1000 7.322566 136.5642 1 FEE 10/01/97 0 8.701084 0 0.06 2 FEE 10/01/98 0 4.416955 0 0.05 3 FEE 10/01/99 0 6.710882 0 0.05 4 12/31/99 0 10 0 0.04 5 N/A 0 N/A 0 0.03 6 N/A 0 N/A 0 0.02 7 N/A 0 N/A 0 0 8 N/A 0 N/A 0 0 9 N/A 0 N/A 0 0 10 N/A 0 N/A 0 0 11 N/A 0 N/A 0 0 12 N/A 0 N/A 0 0 13 N/A 0 N/A 0 0 14 FEE N/A 0 N/A 0 0 15 FEE N/A 0 N/A 0 0 RESULTING VALUE 12/31/99 10 136.5642 1365.642 3.247091 FORMULA: 1000*(1+T)= 1365.642 = 1331.642 T = 0.092213 R = 0.331642 NLIC VAII EMERGING GROWTH 07/03/95 TO NO. YEARS 4.495551 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES - INIT DEPOSIT 07/03/95 1000 5.558229 179.9134 1 FEE 07/03/96 0 7.528935 0 0.06 2 FEE 07/03/97 0 8.228578 0 0.05 3 FEE 07/03/98 0 10.7807 0 0.05 4 07/03/99 0 14.89841 0 0.04 5 12/31/99 0 24.19191 0 0.03 6 N/A 0 N/A 0 0.02 7 N/A 0 N/A 0 0 8 N/A 0 N/A 0 0 9 N/A 0 N/A 0 0 10 N/A 0 N/A 0 0 11 N/A 0 N/A 0 0 12 N/A 0 N/A 0 0 13 N/A 0 N/A 0 0 14 FEE N/A 0 N/A 0 0 15 FEE N/A 0 N/A 0 0 RESULTING VALUE 12/31/99 24.19191 179.9134 4352.448 4.495551 FORMULA: 1000*(1+T)= 4352.448 = 4326.948 T = 0.385204 R = 3.326948 NLIC VAII REAL ESTATE 03/04/97 TO NO. YEARS 2.825462 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES - INIT DEPOSIT 03/04/97 1000 10.35287 96.59161 1 FEE 03/04/98 0 11.76229 0 0.06 2 FEE 03/04/99 0 9.931947 0 0.05 3 FEE 12/31/99 0 10 0 0.05 4 N/A 0 N/A 0 0.04 5 N/A 0 N/A 0 0.03 6 N/A 0 N/A 0 0.02 7 N/A 0 N/A 0 0 8 N/A 0 N/A 0 0 9 N/A 0 N/A 0 0 10 N/A 0 N/A 0 0 11 N/A 0 N/A 0 0 12 N/A 0 N/A 0 0 13 N/A 0 N/A 0 0 14 FEE N/A 0 N/A 0 0 15 FEE N/A 0 N/A 0 0 RESULTING VALUE 12/31/99 10 96.59161 965.9161 2.825462 FORMULA: 1000*(1+T)= 965.9161 = 923.4161 T = -0.02781 R = -0.07658 NLIC VAII COMPETITIVE EDGE 05/18/98 TO NO. YEARS 1.620808 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES - INIT DEPOSIT 05/18/98 1000 8.303158 120.4361 1 FEE 05/18/99 0 8.379735 0 0.06 2 FEE 12/31/99 0 10 0 0.05 3 FEE N/A 0 N/A 0 0.05 4 N/A 0 N/A 0 0.04 5 N/A 0 N/A 0 0.03 6 N/A 0 N/A 0 0.02 7 N/A 0 N/A 0 0 8 N/A 0 N/A 0 0 9 N/A 0 N/A 0 0 10 N/A 0 N/A 0 0 11 N/A 0 N/A 0 0 12 N/A 0 N/A 0 0 13 N/A 0 N/A 0 0 14 FEE N/A 0 N/A 0 0 15 FEE N/A 0 N/A 0 0 RESULTING VALUE 12/31/99 10 120.4361 1204.361 1.620808 FORMULA: 1000*(1+T)= 1204.361 = 1161.861 T = 0.09698 R = 0.161861 NLIC VAII S&P 500 INDEX 05/18/98 TO NO. YEARS 1.620808 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES - INIT DEPOSIT 05/18/98 1000 7.647801 130.7565 1 FEE 05/18/99 0 9.177837 0 0.06 2 FEE 12/31/99 0 10 0 0.05 3 FEE N/A 0 N/A 0 0.05 4 N/A 0 N/A 0 0.04 5 N/A 0 N/A 0 0.03 6 N/A 0 N/A 0 0.02 7 N/A 0 N/A 0 0 8 N/A 0 N/A 0 0 9 N/A 0 N/A 0 0 10 N/A 0 N/A 0 0 11 N/A 0 N/A 0 0 12 N/A 0 N/A 0 0 13 N/A 0 N/A 0 0 14 FEE N/A 0 N/A 0 0 15 FEE N/A 0 N/A 0 0 RESULTING VALUE 12/31/99 10 130.7565 1307.565 1.620808 FORMULA: 1000*(1+T)= 1307.565 = 1265.065 T = 0.156116 R = 0.265065 NLIC VAII AGGRESSIVE EQUITY 05/03/99 TO NO. YEARS 0.66256 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES - INIT DEPOSIT 05/03/99 1000 6.920866 144.4906 1 FEE 12/31/99 0 10 0 0.06 2 FEE N/A 0 N/A 0 0.05 3 FEE N/A 0 N/A 0 0.05 4 N/A 0 N/A 0 0.04 5 N/A 0 N/A 0 0.03 6 N/A 0 N/A 0 0.02 7 N/A 0 N/A 0 0 8 N/A 0 N/A 0 0 9 N/A 0 N/A 0 0 10 N/A 0 N/A 0 0 11 N/A 0 N/A 0 0 12 N/A 0 N/A 0 0 13 N/A 0 N/A 0 0 14 FEE N/A 0 N/A 0 0 15 FEE N/A 0 N/A 0 0 RESULTING VALUE 12/31/99 10 144.4906 1444.906 0.66256 FORMULA: 1000*(1+T)= 1444.906 = 1393.906 T = 0.650787 R = 0.393906 NLIC VAII SHORT TERM BOND 05/03/99 TO NO. YEARS 0.66256 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES - INIT DEPOSIT 05/03/99 1000 9.955094 100.4511 1 FEE 12/31/99 0 10 0 0.06 2 FEE N/A 0 N/A 0 0.05 3 FEE N/A 0 N/A 0 0.05 4 N/A 0 N/A 0 0.04 5 N/A 0 N/A 0 0.03 6 N/A 0 N/A 0 0.02 7 N/A 0 N/A 0 0 8 N/A 0 N/A 0 0 9 N/A 0 N/A 0 0 10 N/A 0 N/A 0 0 11 N/A 0 N/A 0 0 12 N/A 0 N/A 0 0 13 N/A 0 N/A 0 0 14 FEE N/A 0 N/A 0 0 15 FEE N/A 0 N/A 0 0 RESULTING VALUE 12/31/99 10 100.4511 1004.511 0.66256 FORMULA: 1000*(1+T)= 1004.511 = 953.5109 T = -0.06933 R = -0.04649 Alliance Premier Growth 07/14/99 TO NO. YEARS 0.465435 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES - INIT DEPOSIT 07/14/99 1000 8.909749 112.2366 1 FEE 12/31/99 0 10 0 0.06 2 FEE N/A 0 N/A 0 0.05 3 FEE N/A 0 N/A 0 0.05 4 N/A 0 N/A 0 0.04 5 N/A 0 N/A 0 0.03 6 N/A 0 N/A 0 0.02 7 N/A 0 N/A 0 0 8 N/A 0 N/A 0 0 9 N/A 0 N/A 0 0 10 N/A 0 N/A 0 0 11 N/A 0 N/A 0 0 12 N/A 0 N/A 0 0 13 N/A 0 N/A 0 0 14 FEE N/A 0 N/A 0 0 15 FEE N/A 0 N/A 0 0 RESULTING VALUE 12/31/99 10 112.2366 1122.366 0.465435 FORMULA: 1000*(1+T)= 1122.366 = 1071.366 T = 0.159638 R = 0.071366 Alliance Growth 09/15/94 TO NO. YEARS 5.292266 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES - INIT DEPOSIT 09/15/94 1000 2.649067 377.4914 1 FEE 09/15/95 0 3.557601 0 0.06 2 FEE 09/15/96 0 4.130884 0 0.05 3 FEE 09/15/97 0 5.619702 0 0.05 4 09/15/98 0 5.907374 0 0.04 5 09/15/99 0 8.157778 0 0.03 6 12/31/99 0 10 0 0.02 7 N/A 0 N/A 0 0 8 N/A 0 N/A 0 0 9 N/A 0 N/A 0 0 10 N/A 0 N/A 0 0 11 N/A 0 N/A 0 0 12 N/A 0 N/A 0 0 13 N/A 0 N/A 0 0 14 FEE N/A 0 N/A 0 0 15 FEE N/A 0 N/A 0 0 RESULTING VALUE 12/31/99 10 377.4914 3774.914 5.292266 FORMULA: 1000*(1+T)= 3774.914 = 3757.914 T = 0.284219 R = 2.757914 Alliance Growth and Income 01/14/91 TO NO. YEARS 8.960986 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES - INIT DEPOSIT 01/14/91 1000 3.190181 313.4618 1 FEE 01/14/92 0 3.249977 0 0.06 2 FEE 01/14/93 0 3.450661 0 0.05 3 FEE 01/14/94 0 3.791536 0 0.05 4 01/14/95 0 3.716368 0 0.04 5 01/14/96 0 4.813585 0 0.03 6 01/14/97 0 6.203381 0 0.02 7 01/14/98 0 7.498644 0 0 8 01/14/99 0 8.984923 0 0 9 12/31/99 0 10 0 0 10 N/A 0 N/A 0 0 11 N/A 0 N/A 0 0 12 N/A 0 N/A 0 0 13 N/A 0 N/A 0 0 14 FEE N/A 0 N/A 0 0 15 FEE N/A 0 N/A 0 0 RESULTING VALUE 12/31/99 10 313.4618 3134.618 8.960986 FORMULA: 1000*(1+T)= 3134.618 = 3134.618 T = 0.135983 R = 2.134618 Aim Cap App 05/05/93 TO NO. YEARS 6.655715 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES - INIT DEPOSIT 05/05/93 1000 3.003262 332.9713 1 FEE 05/05/94 0 3.532921 0 0.06 2 FEE 05/05/95 0 3.929383 0 0.05 3 FEE 05/05/96 0 5.304227 0 0.05 4 05/05/97 0 5.547366 0 0.04 5 05/05/98 0 6.985252 0 0.03 6 05/05/99 0 7.212215 0 0.02 7 12/31/99 0 10 0 0 8 N/A 0 N/A 0 0 9 N/A 0 N/A 0 0 10 N/A 0 N/A 0 0 11 N/A 0 N/A 0 0 12 N/A 0 N/A 0 0 13 N/A 0 N/A 0 0 14 FEE N/A 0 N/A 0 0 15 FEE N/A 0 N/A 0 0 RESULTING VALUE 12/31/99 10 332.9713 3329.713 6.655715 FORMULA: 1000*(1+T)= 3329.713 = 3329.713 T = 0.198091 R = 2.329713 Aim Growth 05/05/93 TO NO. YEARS 6.655715 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES - INIT DEPOSIT 05/05/93 1000 3.028348 330.2131 1 FEE 05/05/94 0 3.174143 0 0.06 2 FEE 05/05/95 0 3.539686 0 0.05 3 FEE 05/05/96 0 4.459177 0 0.05 4 05/05/97 0 5.237706 0 0.04 5 05/05/98 0 7.035526 0 0.03 6 05/05/99 0 8.011675 0 0.02 7 12/31/99 0 10 0 0 8 N/A 0 N/A 0 0 9 N/A 0 N/A 0 0 10 N/A 0 N/A 0 0 11 N/A 0 N/A 0 0 12 N/A 0 N/A 0 0 13 N/A 0 N/A 0 0 14 FEE N/A 0 N/A 0 0 15 FEE N/A 0 N/A 0 0 RESULTING VALUE 12/31/99 10 330.2131 3302.131 6.655715 FORMULA: 1000*(1+T)= 3302.131 = 3302.131 T = 0.196595 R = 2.302131 Aim Value 05/05/93 TO NO. YEARS 6.655715 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES - INIT DEPOSIT 05/05/93 1000 2.944335 339.6352 1 FEE 05/05/94 0 3.412472 0 0.06 2 FEE 05/05/95 0 3.848906 0 0.05 3 FEE 05/05/96 0 4.626119 0 0.05 4 05/05/97 0 5.552698 0 0.04 5 05/05/98 0 7.124989 0 0.03 6 05/05/99 0 8.505732 0 0.02 7 12/31/99 0 10 0 0 8 N/A 0 N/A 0 0 9 N/A 0 N/A 0 0 10 N/A 0 N/A 0 0 11 N/A 0 N/A 0 0 12 N/A 0 N/A 0 0 13 N/A 0 N/A 0 0 14 FEE N/A 0 N/A 0 0 15 FEE N/A 0 N/A 0 0 RESULTING VALUE 12/31/99 10 339.6352 3396.352 6.655715 FORMULA: 1000*(1+T)= 3396.352 = 3396.352 T = 0.201664 R = 2.396352 Putnam International Growth 01/02/97 TO NO. YEARS 2.992471 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES - INIT DEPOSIT 01/02/97 1000 4.778754 209.2596 1 FEE 01/02/98 0 5.478981 0 0.06 2 FEE 01/02/99 0 6.352308 0 0.05 3 FEE 12/31/99 0 10 0 0.05 4 N/A 0 N/A 0 0.04 5 N/A 0 N/A 0 0.03 6 N/A 0 N/A 0 0.02 7 N/A 0 N/A 0 0 8 N/A 0 N/A 0 0 9 N/A 0 N/A 0 0 10 N/A 0 N/A 0 0 11 N/A 0 N/A 0 0 12 N/A 0 N/A 0 0 13 N/A 0 N/A 0 0 14 FEE N/A 0 N/A 0 0 15 FEE N/A 0 N/A 0 0 RESULTING VALUE 12/31/99 10 209.2596 2092.596 2.992471 FORMULA: 1000*(1+T)= 2092.596 = 2050.096 T = 0.271119 R = 1.050096 Putnam Voyager 12/31/89 TO NO. YEARS 10 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/89 1000 1.596874 626.2234 FEE 12/31/90 0 1.536548 0 FEE 12/31/91 0 2.204722 0 FEE 12/31/92 0 2.389716 0 FEE 12/31/93 0 2.786011 0 FEE 12/31/94 0 2.76472 0 FEE 12/31/95 0 3.81985 0 FEE 12/31/96 0 4.238264 0 FEE 12/31/97 0 5.266429 0 FEE 12/31/98 0 6.433524 0 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 626.2234 6262.234 10 FORMULA: 1000*(1+T)= 6262.234 - (0.85 * 1000 * 0) = 6262.234 T = 0.201359 R = 5.262234 Putnam Growth & Income 12/31/89 TO NO. YEARS 10 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/89 1000 3.227969 309.7923 FEE 12/31/90 0 3.232574 0 FEE 12/31/91 0 3.779619 0 FEE 12/31/92 0 4.074249 0 FEE 12/31/93 0 4.572422 0 FEE 12/31/94 0 4.506515 0 FEE 12/31/95 0 6.051164 0 FEE 12/31/96 0 7.245901 0 FEE 12/31/97 0 8.835318 0 FEE 12/31/98 0 10.01985 0 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 309.7923 3097.923 10 FORMULA: 1000*(1+T)= 3097.923 - (0.85 * 1000 * 0) = 3097.923 T = 0.119714 R = 2.097923 MSDW Mid Cap 01/02/97 TO NO. YEARS 2.992471 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES - INIT DEPOSIT 01/02/97 1000 5.478095 182.5452 1 FEE 01/02/98 0 7.559854 0 0.06 2 FEE 01/02/99 0 8.390111 0 0.05 3 FEE 12/31/99 0 10 0 0.05 4 N/A 0 N/A 0 0.04 5 N/A 0 N/A 0 0.03 6 N/A 0 N/A 0 0.02 7 N/A 0 N/A 0 0 8 N/A 0 N/A 0 0 9 N/A 0 N/A 0 0 10 N/A 0 N/A 0 0 11 N/A 0 N/A 0 0 12 N/A 0 N/A 0 0 13 N/A 0 N/A 0 0 14 FEE N/A 0 N/A 0 0 15 FEE N/A 0 N/A 0 0 RESULTING VALUE 12/31/99 10 182.5452 1825.452 2.992471 FORMULA: 1000*(1+T)= 1825.452 = 1782.952 T = 0.213176 R = 0.782952 Income and Death Benefit Combination Standardized None Income and Death Benefit Combination Non-Standardized None Income and Death Benefit Combination Adjusted Historical - 1 Year Variable Sub-Account NLIC VAII MONEY MARKET 12/31/98 NO. YEARS 1 TO 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/98 1000 9.721854 102.861 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 102.861 1028.61 1 FORMULA: 1000*(1+T)= 1028.61 - (0.85 * 1000 * 0.05) = 986.1104 T = -0.01389 R = -0.01389 NLIC VAII HIGH YIELD 12/31/98 NO. YEARS 1 TO 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/98 1000 10.3242 96.85983 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 96.85983 968.5983 1 FORMULA: 1000*(1+T)= 968.5983 - (0.85 * 1000 * 0.05) = 926.0983 T = -0.0739 R = -0.0739 NLIC VAII EQUITY 12/31/98 NO. YEARS 1 TO 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/98 1000 6.423039 155.6896 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 155.6896 1556.896 1 FORMULA: 1000*(1+T)= 1556.896 - (0.85 * 1000 * 0.05) = 1514.396 T = 0.514396 R = 0.514396 NLIC VAII QUALITY INCOME 12/31/98 NO. YEARS 1 TO 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/98 1000 10.64625 93.92982 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 93.92982 939.2982 1 FORMULA: 1000*(1+T)= 939.2982 - (0.85 * 1000 * 0.05) = 896.7982 T = -0.1032 R = -0.1032 NLIC VAII STRATEGIST 12/31/98 NO. YEARS 1 TO 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/98 1000 8.680471 115.2011 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 115.2011 1152.011 1 FORMULA: 1000*(1+T)= 1152.011 - (0.85 * 1000 * 0.05) = 1109.511 T = 0.109511 R = 0.109511 NLIC VAII DIVIDEND GROWTH 12/31/98 NO. YEARS 1 TO 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/98 1000 10.43627 95.81968 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 95.81968 958.1968 1 FORMULA: 1000*(1+T)= 958.1968 - (0.85 * 1000 * 0.05) = 915.6968 T = -0.0843 R = -0.0843 NLIC VAII UTILITIES 12/31/98 NO. YEARS 1 TO 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/98 1000 9.037502 110.65 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 110.65 1106.5 1 FORMULA: 1000*(1+T)= 1106.5 - (0.85 * 1000 * 0.05) = 1064 T = 0.064 R = 0.064 NLIC VAII EUROPEAN GROWTH 12/31/98 NO. YEARS 1 TO 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/98 1000 7.889615 126.7489 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 126.7489 1267.489 1 FORMULA: 1000*(1+T)= 1267.489 - (0.85 * 1000 * 0.05) = 1224.989 T = 0.224989 R = 0.224989 NLIC VAII CAPITAL GROWTH 12/31/98 NO. YEARS 1 TO 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/98 1000 7.642026 130.8554 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 130.8554 1308.554 1 FORMULA: 1000*(1+T)= 1308.554 - (0.85 * 1000 * 0.05) = 1266.054 T = 0.266054 R = 0.266054 NLIC VAII PACIFIC GROWTH 12/31/98 NO. YEARS 1 TO 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/98 1000 6.132863 163.056 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 163.056 1630.56 1 FORMULA: 1000*(1+T)= 1630.56 - (0.85 * 1000 * 0.05) = 1588.06 T = 0.58806 R = 0.58806 NLIC VAII GLOBAL DIVIDEND GROWTH 12/31/98 NO. YEARS 1 TO 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/98 1000 8.884787 112.5519 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 112.5519 1125.519 1 FORMULA: 1000*(1+T)= 1125.519 - (0.85 * 1000 * 0.05) = 1083.019 T = 0.083019 R = 0.083019 NLIC VAII CAPITAL APPRECIATION 12/31/98 NO. YEARS 1 TO 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/98 1000 10.14945 98.52752 FEE 12/31/99 0 10.87141 0 RESULTING VALUE 12/31/99 10.87141 98.52752 1071.133 1 FORMULA: 1000*(1+T)= 1071.133 - (0.85 * 1000 * 0.05) = 1028.633 T = 0.028633 R = 0.028633 NLIC VAII INCOME BUILDER 12/31/98 NO. YEARS 1 TO 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/98 1000 9.514625 105.1014 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 105.1014 1051.014 1 FORMULA: 1000*(1+T)= 1051.014 - (0.85 * 1000 * 0.05) = 1008.514 T = 0.008514 R = 0.008514 NLIC VAII EQUITY GROWTH 12/31/98 NO. YEARS 1 TO 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/98 1000 7.304841 136.8955 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 136.8955 1368.955 1 FORMULA: 1000*(1+T)= 1368.955 - (0.85 * 1000 * 0.05) = 1326.455 T = 0.326455 R = 0.326455 NLIC VAII INTERNATIONAL MAGNUM 12/31/98 NO. YEARS 1 TO 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/98 1000 8.136722 122.8996 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 122.8996 1228.996 1 FORMULA: 1000*(1+T)= 1228.996 - (0.85 * 1000 * 0.05) = 1186.496 T = 0.186496 R = 0.186496 NLIC VAII EMERGING MARKETS 12/31/98 NO. YEARS 1 TO 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/98 1000 5.231783 191.1394 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 191.1394 1911.394 1 FORMULA: 1000*(1+T)= 1911.394 - (0.85 * 1000 * 0.05) = 1868.894 T = 0.868894 R = 0.868894 NLIC VAII EMERGING GROWTH 12/31/98 NO. YEARS 1 TO 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/98 1000 11.99735 83.35171 FEE 12/31/99 0 24.19191 0 RESULTING VALUE 12/31/99 24.19191 83.35171 2016.437 1 FORMULA: 1000*(1+T)= 2016.437 - (0.85 * 1000 * 0.05) = 1973.937 T = 0.973937 R = 0.973937 NLIC VAII REAL ESTATE 12/31/98 NO. YEARS 1 TO 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/98 1000 10.3389 96.72205 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 96.72205 967.2205 1 FORMULA: 1000*(1+T)= 967.2205 - (0.85 * 1000 * 0.05) = 924.7205 T = -0.07528 R = -0.07528 NLIC VAII COMPETITIVE EDGE 12/31/98 NO. YEARS 1 TO 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/98 1000 8.078399 123.7869 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 123.7869 1237.869 1 FORMULA: 1000*(1+T)= 1237.869 - (0.85 * 1000 * 0.05) = 1195.369 T = 0.195369 R = 0.195369 NLIC VAII S&P 500 INDEX 12/31/98 NO. YEARS 1 TO 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/98 1000 8.510285 117.5049 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 117.5049 1175.049 1 FORMULA: 1000*(1+T)= 1175.049 - (0.85 * 1000 * 0.05) = 1132.549 T = 0.132549 R = 0.132549 NLIC VAII AGGRESSIVE EQUITY 12/31/98 NO. YEARS 1 TO 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/98 1000 #VALUE! #VALUE! FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 #VALUE! #VALUE! 1 FORMULA: 1000*(1+T)= #VALUE! - (0.85 * 1000 * 0.05) = #VALUE! T = N/A R = N/A NLIC VAII SHORT TERM BOND 12/31/98 NO. YEARS 1 TO 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/98 1000 #VALUE! #VALUE! FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 #VALUE! #VALUE! 1 FORMULA: 1000*(1+T)= #VALUE! - (0.85 * 1000 * 0.05) = #VALUE! T = N/A R = N/A Alliance Premier Growth 12/31/98 NO. YEARS 1 TO 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/98 1000 #VALUE! #VALUE! FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 #VALUE! #VALUE! 1 FORMULA: 1000*(1+T)= #VALUE! - (0.85 * 1000 * 0.05) = #VALUE! T = N/A R = N/A Alliance Growth 12/31/98 NO. YEARS 1 TO 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/98 1000 7.575337 132.0073 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 132.0073 1320.073 1 FORMULA: 1000*(1+T)= 1320.073 - (0.85 * 1000 * 0.05) = 1277.573 T = 0.277573 R = 0.277573 Alliance Growth and Income 12/31/98 NO. YEARS 1 TO 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/98 1000 9.146821 109.3276 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 109.3276 1093.276 1 FORMULA: 1000*(1+T)= 1093.276 - (0.85 * 1000 * 0.05) = 1050.776 T = 0.050776 R = 0.050776 Aim Cap App 12/31/98 NO. YEARS 1 TO 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/98 1000 7.043907 141.9667 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 141.9667 1419.667 1 FORMULA: 1000*(1+T)= 1419.667 - (0.85 * 1000 * 0.05) = 1377.167 T = 0.377167 R = 0.377167 Aim Growth 12/31/98 NO. YEARS 1 TO 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/98 1000 7.532439 132.7591 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 132.7591 1327.591 1 FORMULA: 1000*(1+T)= 1327.591 - (0.85 * 1000 * 0.05) = 1285.091 T = 0.285091 R = 0.285091 Aim Value 12/31/98 NO. YEARS 1 TO 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/98 1000 7.841973 127.5189 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 127.5189 1275.189 1 FORMULA: 1000*(1+T)= 1275.189 - (0.85 * 1000 * 0.05) = 1232.689 T = 0.232689 R = 0.232689 Putnam International Growth 12/31/98 NO. YEARS 1 TO 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/98 1000 6.364967 157.11 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 157.11 1571.1 1 FORMULA: 1000*(1+T)= 1571.1 - (0.85 * 1000 * 0.05) = 1528.6 T = 0.5286 R = 0.5286 Putnam Voyager 12/31/98 NO. YEARS 1 TO 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/98 1000 6.446365 155.1262 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 155.1262 1551.262 1 FORMULA: 1000*(1+T)= 1551.262 - (0.85 * 1000 * 0.05) = 1508.762 T = 0.508762 R = 0.508762 Putnam Growth & Income 12/31/98 NO. YEARS 1 TO 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/98 1000 10.03992 99.60239 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 99.60239 996.0239 1 FORMULA: 1000*(1+T)= 996.0239 - (0.85 * 1000 * 0.05) = 953.5239 T = -0.04648 R = -0.04648 MSDW Mid Cap 12/31/98 NO. YEARS 1 TO 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/98 1000 8.44705 118.3845 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 118.3845 1183.845 1 FORMULA: 1000*(1+T)= 1183.845 - (0.85 * 1000 * 0.05) = 1141.345 T = 0.141345 R = 0.141345 Income and Death Benefit Combination Adjusted Historical 5 Years 01/00/00 NLIC VAII MONEY MARKET 12/30/94 TO NO. YEARS 5 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/94 1000 8.520107 117.3694 FEE 12/31/95 0 8.833442 0 FEE 12/31/96 0 9.114021 0 FEE 12/31/97 0 9.415339 0 FEE 12/31/98 0 9.721854 0 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 117.3694 1173.694 5 FORMULA: 1000*(1+T)= 1173.694 - (0.85 * 1000 * 0.02) = 1156.694 T = 0.029541 R = 0.156694 NLIC VAII HIGH YIELD 12/30/94 TO NO. YEARS 5 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/94 1000 8.249286 121.2226 FEE 12/31/95 0 9.288641 0 FEE 12/31/96 0 10.20985 0 FEE 12/31/97 0 11.21208 0 FEE 12/31/98 0 10.3242 0 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 121.2226 1212.226 5 FORMULA: 1000*(1+T)= 1212.226 - (0.85 * 1000 * 0.02) = 1195.226 T = 0.036311 R = 0.195226 NLIC VAII EQUITY 12/30/94 TO NO. YEARS 5 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/94 1000 2.382581 419.7128 FEE 12/31/95 0 3.370686 0 FEE 12/31/96 0 3.717571 0 FEE 12/31/97 0 5.01562 0 FEE 12/31/98 0 6.423039 0 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 419.7128 4197.128 5 FORMULA: 1000*(1+T)= 4197.128 - (0.85 * 1000 * 0.02) = 4180.128 T = 0.331183 R = 3.180128 NLIC VAII QUALITY INCOME 12/30/94 TO NO. YEARS 5 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/94 1000 7.499623 133.34 FEE 12/31/95 0 9.178049 0 FEE 12/31/96 0 9.149188 0 FEE 12/31/97 0 9.979704 0 FEE 12/31/98 0 10.64625 0 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 133.34 1333.4 5 FORMULA: 1000*(1+T)= 1333.4 - (0.85 * 1000 * 0.02) = 1316.4 T = 0.05652 R = 0.3164 NLIC VAII STRATEGIST 12/30/94 TO NO. YEARS 5 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/94 1000 5.166316 193.5615 FEE 12/31/95 0 5.543716 0 FEE 12/31/96 0 6.259134 0 FEE 12/31/97 0 6.987403 0 FEE 12/31/98 0 8.680471 0 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 193.5615 1935.615 5 FORMULA: 1000*(1+T)= 1935.615 - (0.85 * 1000 * 0.02) = 1918.615 T = 0.139194 R = 0.918615 NLIC VAII DIVIDEND GROWTH 12/30/94 TO NO. YEARS 5 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/94 1000 4.656436 214.7565 FEE 12/31/95 0 6.200354 0 FEE 12/31/96 0 7.544539 0 FEE 12/31/97 0 9.302881 0 FEE 12/31/98 0 10.43627 0 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 214.7565 2147.565 5 FORMULA: 1000*(1+T)= 2147.565 - (0.85 * 1000 * 0.02) = 2130.565 T = 0.163319 R = 1.130565 NLIC VAII UTILITIES 12/30/94 TO NO. YEARS 5 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/94 1000 4.426566 225.9087 FEE 12/31/95 0 5.58628 0 FEE 12/31/96 0 5.959337 0 FEE 12/31/97 0 7.438661 0 FEE 12/31/98 0 9.037502 0 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 225.9087 2259.087 5 FORMULA: 1000*(1+T)= 2259.087 - (0.85 * 1000 * 0.02) = 2242.087 T = 0.175251 R = 1.242087 NLIC VAII EUROPEAN GROWTH 12/30/94 TO NO. YEARS 5 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/94 1000 3.61232 276.8304 FEE 12/31/95 0 4.458633 0 FEE 12/31/96 0 5.689156 0 FEE 12/31/97 0 6.48317 0 FEE 12/31/98 0 7.889615 0 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 276.8304 2768.304 5 FORMULA: 1000*(1+T)= 2768.304 - (0.85 * 1000 * 0.02) = 2751.304 T = 0.224356 R = 1.751304 NLIC VAII CAPITAL GROWTH 12/30/94 TO NO. YEARS 5 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/94 1000 3.706921 269.7657 FEE 12/31/95 0 4.860975 0 FEE 12/31/96 0 5.322362 0 FEE 12/31/97 0 6.507075 0 FEE 12/31/98 0 7.642026 0 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 269.7657 2697.657 5 FORMULA: 1000*(1+T)= 2697.657 - (0.85 * 1000 * 0.02) = 2680.657 T = 0.218003 R = 1.680657 NLIC VAII PACIFIC GROWTH 12/30/94 TO NO. YEARS 5 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/94 1000 10.66574 93.75813 FEE 12/31/95 0 11.18044 0 FEE 12/31/96 0 11.401 0 FEE 12/31/97 0 6.97248 0 FEE 12/31/98 0 6.132863 0 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 93.75813 937.5813 5 FORMULA: 1000*(1+T)= 937.5813 - (0.85 * 1000 * 0.02) = 920.5813 T = -0.01641 R = -0.07942 NLIC VAII GLOBAL DIVIDEND GROWTH 12/30/94 TO NO. YEARS 5 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/94 1000 5.278903 189.4333 FEE 12/31/95 0 6.335444 0 FEE 12/31/96 0 7.312439 0 FEE 12/31/97 0 8.04267 0 FEE 12/31/98 0 8.884787 0 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 189.4333 1894.333 5 FORMULA: 1000*(1+T)= 1894.333 - (0.85 * 1000 * 0.02) = 1877.333 T = 0.134249 R = 0.877333 NLIC VAII CAPITAL APPRECIATION 12/30/94 TO NO. YEARS 5 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/94 1000 #VALUE! #VALUE! FEE 12/31/95 0 #VALUE! #VALUE! FEE 12/31/96 0 #VALUE! #VALUE! FEE 12/31/97 0 11.17696 0 FEE 12/31/98 0 10.14945 0 FEE 12/31/99 0 10.87141 0 RESULTING VALUE 12/31/99 10.87141 #VALUE! #VALUE! 5 FORMULA: 1000*(1+T)= #VALUE! - (0.85 * 1000 * 0.02) = #VALUE! T = N/A R = N/A NLIC VAII INCOME BUILDER 12/30/94 TO NO. YEARS 5 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/94 1000 #VALUE! #VALUE! FEE 12/31/95 0 #VALUE! #VALUE! FEE 12/31/96 0 #VALUE! #VALUE! FEE 12/31/97 0 9.39045 0 FEE 12/31/98 0 9.514625 0 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 #VALUE! #VALUE! 5 FORMULA: 1000*(1+T)= #VALUE! - (0.85 * 1000 * 0.02) = #VALUE! T = N/A R = N/A NLIC VAII EQUITY GROWTH 12/30/94 TO NO. YEARS 5 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/94 1000 #VALUE! #VALUE! FEE 12/31/95 0 #VALUE! #VALUE! FEE 12/31/96 0 #VALUE! #VALUE! FEE 12/31/97 0 6.237824 0 FEE 12/31/98 0 7.304841 0 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 #VALUE! #VALUE! 5 FORMULA: 1000*(1+T)= #VALUE! - (0.85 * 1000 * 0.02) = #VALUE! T = N/A R = N/A NLIC VAII INTERNATIONAL MAGNUM 12/30/94 TO NO. YEARS 5 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/94 1000 #VALUE! #VALUE! FEE 12/31/95 0 #VALUE! #VALUE! FEE 12/31/96 0 #VALUE! #VALUE! FEE 12/31/97 0 7.634101 0 FEE 12/31/98 0 8.136722 0 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 #VALUE! #VALUE! 5 FORMULA: 1000*(1+T)= #VALUE! - (0.85 * 1000 * 0.02) = #VALUE! T = N/A R = N/A NLIC VAII EMERGING MARKETS 12/30/94 TO NO. YEARS 5 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/94 1000 #VALUE! #VALUE! FEE 12/31/95 0 #VALUE! #VALUE! FEE 12/31/96 0 7.175023 0 FEE 12/31/97 0 7.065182 0 FEE 12/31/98 0 5.231783 0 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 #VALUE! #VALUE! 5 FORMULA: 1000*(1+T)= #VALUE! - (0.85 * 1000 * 0.02) = #VALUE! T = N/A R = N/A NLIC VAII EMERGING GROWTH 12/30/94 TO NO. YEARS 5 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/94 1000 #VALUE! #VALUE! FEE 12/31/95 0 6.465775 0 FEE 12/31/96 0 7.440492 0 FEE 12/31/97 0 8.840074 0 FEE 12/31/98 0 11.99735 0 FEE 12/31/99 0 24.19191 0 RESULTING VALUE 12/31/99 24.19191 #VALUE! #VALUE! 5 FORMULA: 1000*(1+T)= #VALUE! - (0.85 * 1000 * 0.02) = #VALUE! T = N/A R = N/A NLIC VAII REAL ESTATE 12/30/94 TO NO. YEARS 5 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/94 1000 #VALUE! #VALUE! FEE 12/31/95 0 #VALUE! #VALUE! FEE 12/31/96 0 #VALUE! #VALUE! FEE 12/31/97 0 12.09761 0 FEE 12/31/98 0 10.3389 0 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 #VALUE! #VALUE! 5 FORMULA: 1000*(1+T)= #VALUE! - (0.85 * 1000 * 0.02) = #VALUE! T = N/A R = N/A NLIC VAII COMPETITIVE EDGE 12/30/94 TO NO. YEARS 5 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/94 1000 #VALUE! #VALUE! FEE 12/31/95 0 #VALUE! #VALUE! FEE 12/31/96 0 #VALUE! #VALUE! FEE 12/31/97 0 #VALUE! #VALUE! FEE 12/31/98 0 8.078399 0 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 #VALUE! #VALUE! 5 FORMULA: 1000*(1+T)= #VALUE! - (0.85 * 1000 * 0.02) = #VALUE! T = N/A R = N/A NLIC VAII S&P 500 INDEX 12/30/94 TO NO. YEARS 5 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/94 1000 #VALUE! #VALUE! FEE 12/31/95 0 #VALUE! #VALUE! FEE 12/31/96 0 #VALUE! #VALUE! FEE 12/31/97 0 #VALUE! #VALUE! FEE 12/31/98 0 8.510285 0 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 #VALUE! #VALUE! 5 FORMULA: 1000*(1+T)= #VALUE! - (0.85 * 1000 * 0.02) = #VALUE! T = N/A R = N/A NLIC VAII AGGRESSIVE EQUITY 12/30/94 TO NO. YEARS 5 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/94 1000 #VALUE! #VALUE! FEE 12/31/95 0 #VALUE! #VALUE! FEE 12/31/96 0 #VALUE! #VALUE! FEE 12/31/97 0 #VALUE! #VALUE! FEE 12/31/98 0 #VALUE! #VALUE! FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 #VALUE! #VALUE! 5 FORMULA: 1000*(1+T)= #VALUE! - (0.85 * 1000 * 0.02) = #VALUE! T = N/A R = N/A NLIC VAII SHORT TERM BOND 12/30/94 TO NO. YEARS 5 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/94 1000 #VALUE! #VALUE! FEE 12/31/95 0 #VALUE! #VALUE! FEE 12/31/96 0 #VALUE! #VALUE! FEE 12/31/97 0 #VALUE! #VALUE! FEE 12/31/98 0 #VALUE! #VALUE! FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 #VALUE! #VALUE! 5 FORMULA: 1000*(1+T)= #VALUE! - (0.85 * 1000 * 0.02) = #VALUE! T = N/A R = N/A Alliance Premier Growth 12/30/94 TO NO. YEARS 5 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/94 1000 #VALUE! #VALUE! FEE 12/31/95 0 #VALUE! #VALUE! FEE 12/31/96 0 #VALUE! #VALUE! FEE 12/31/97 0 #VALUE! #VALUE! FEE 12/31/98 0 #VALUE! #VALUE! FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 #VALUE! #VALUE! 5 FORMULA: 1000*(1+T)= #VALUE! - (0.85 * 1000 * 0.02) = #VALUE! T = N/A R = N/A Alliance Growth 12/30/94 TO NO. YEARS 5 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/94 1000 2.803967 356.6376 FEE 12/31/95 0 3.723542 0 FEE 12/31/96 0 4.696621 0 FEE 12/31/97 0 5.994681 0 FEE 12/31/98 0 7.575337 0 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 356.6376 3566.376 5 FORMULA: 1000*(1+T)= 3566.376 - (0.85 * 1000 * 0.02) = 3549.376 T = 0.28834 R = 2.549376 Alliance Growth and Income 12/30/94 TO NO. YEARS 5 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/94 1000 3.753543 266.415 FEE 12/31/95 0 5.004256 0 FEE 12/31/96 0 6.09596 0 FEE 12/31/97 0 7.707491 0 FEE 12/31/98 0 9.146821 0 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 266.415 2664.15 5 FORMULA: 1000*(1+T)= 2664.15 - (0.85 * 1000 * 0.02) = 2647.15 T = 0.214942 R = 1.64715 Aim Cap App 12/30/94 TO NO. YEARS 5 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/94 1000 3.615201 276.6098 FEE 12/31/95 0 4.81571 0 FEE 12/31/96 0 5.558031 0 FEE 12/31/97 0 6.193024 0 FEE 12/31/98 0 7.043907 0 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 276.6098 2766.098 5 FORMULA: 1000*(1+T)= 2766.098 - (0.85 * 1000 * 0.02) = 2749.098 T = 0.22416 R = 1.749098 Aim Growth 12/30/94 TO NO. YEARS 5 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/94 1000 3.212124 311.3204 FEE 12/31/95 0 4.249842 0 FEE 12/31/96 0 4.926172 0 FEE 12/31/97 0 6.135263 0 FEE 12/31/98 0 7.532439 0 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 311.3204 3113.204 5 FORMULA: 1000*(1+T)= 3113.204 - (0.85 * 1000 * 0.02) = 3096.204 T = 0.25362 R = 2.096204 Aim Value 12/30/94 TO NO. YEARS 5 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/94 1000 3.456839 289.2816 FEE 12/31/95 0 4.623849 0 FEE 12/31/96 0 5.220509 0 FEE 12/31/97 0 6.338881 0 FEE 12/31/98 0 7.841973 0 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 289.2816 2892.816 5 FORMULA: 1000*(1+T)= 2892.816 - (0.85 * 1000 * 0.02) = 2875.816 T = 0.235243 R = 1.875816 Putnam International Growth 12/30/94 TO NO. YEARS 5 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/94 1000 #VALUE! #VALUE! FEE 12/31/95 0 #VALUE! #VALUE! FEE 12/31/96 0 #VALUE! #VALUE! FEE 12/31/97 0 5.472692 0 FEE 12/31/98 0 6.364967 0 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 #VALUE! #VALUE! 5 FORMULA: 1000*(1+T)= #VALUE! - (0.85 * 1000 * 0.02) = #VALUE! T = N/A R = N/A Putnam Voyager 12/30/94 TO NO. YEARS 5 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/94 1000 2.792479 358.1048 FEE 12/31/95 0 3.850502 0 FEE 12/31/96 0 4.263735 0 FEE 12/31/97 0 5.287498 0 FEE 12/31/98 0 6.446365 0 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 358.1048 3581.048 5 FORMULA: 1000*(1+T)= 3581.048 - (0.85 * 1000 * 0.02) = 3564.048 T = 0.289403 R = 2.564048 Putnam Growth & Income 12/30/94 TO NO. YEARS 5 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/94 1000 4.551785 219.694 FEE 12/31/95 0 6.099753 0 FEE 12/31/96 0 7.289498 0 FEE 12/31/97 0 8.870735 0 FEE 12/31/98 0 10.03992 0 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 219.694 2196.94 5 FORMULA: 1000*(1+T)= 2196.94 - (0.85 * 1000 * 0.02) = 2179.94 T = 0.168662 R = 1.17994 MSDW Mid Cap 12/30/94 TO NO. YEARS 5 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/94 1000 #VALUE! #VALUE! FEE 12/31/95 0 #VALUE! #VALUE! FEE 12/31/96 0 #VALUE! #VALUE! FEE 12/31/97 0 7.625185 0 FEE 12/31/98 0 8.44705 0 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 #VALUE! #VALUE! 5 FORMULA: 1000*(1+T)= #VALUE! - (0.85 * 1000 * 0.02) = #VALUE! T = N/A R = N/A Income and Death Benefit Combination Adjsuted Historical 10 Years/Since Inception - NLIC VAII MONEY MARKET 12/31/89 TO NO. YEARS 10 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/89 1000 7.416657 134.8316 FEE 12/31/90 0 7.858526 0 FEE 12/31/91 0 8.158214 0 FEE 12/31/92 0 8.283748 0 FEE 12/31/93 0 8.355477 0 FEE 12/31/94 0 8.520107 0 FEE 12/31/95 0 8.833442 0 FEE 12/31/96 0 9.114021 0 FEE 12/31/97 0 9.415339 0 FEE 12/31/98 0 9.721854 0 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 134.8316 1348.316 10 FORMULA: 1000*(1+T)= 1348.316 - (0.85 * 1000 * 0) = 1348.316 T = 0.030337 R = 0.348316 NLIC VAII HIGH YIELD 12/31/89 TO NO. YEARS 10 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/89 1000 5.418664 184.5473 FEE 12/31/90 0 3.893013 0 FEE 12/31/91 0 6.063258 0 FEE 12/31/92 0 7.049047 0 FEE 12/31/93 0 8.593252 0 FEE 12/31/94 0 8.249286 0 FEE 12/31/95 0 9.288641 0 FEE 12/31/96 0 10.20985 0 FEE 12/31/97 0 11.21208 0 FEE 12/31/98 0 10.3242 0 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 184.5473 1845.473 10 FORMULA: 1000*(1+T)= 1845.473 - (0.85 * 1000 * 0) = 1845.473 T = 0.06319 R = 0.845473 NLIC VAII EQUITY 12/31/89 TO NO. YEARS 10 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/89 1000 1.512002 661.3749 FEE 12/31/90 0 1.430443 0 FEE 12/31/91 0 2.233419 0 FEE 12/31/92 0 2.195902 0 FEE 12/31/93 0 2.580523 0 FEE 12/31/94 0 2.382581 0 FEE 12/31/95 0 3.370686 0 FEE 12/31/96 0 3.717571 0 FEE 12/31/97 0 5.01562 0 FEE 12/31/98 0 6.423039 0 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 661.3749 6613.749 10 FORMULA: 1000*(1+T)= 6613.749 - (0.85 * 1000 * 0) = 6613.749 T = 0.207938 R = 5.613749 NLIC VAII QUALITY INCOME 12/31/89 TO NO. YEARS 10 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/89 1000 5.700505 175.4231 FEE 12/31/90 0 5.979764 0 FEE 12/31/91 0 6.95659 0 FEE 12/31/92 0 7.394394 0 FEE 12/31/93 0 8.202069 0 FEE 12/31/94 0 7.499623 0 FEE 12/31/95 0 9.178049 0 FEE 12/31/96 0 9.149188 0 FEE 12/31/97 0 9.979704 0 FEE 12/31/98 0 10.64625 0 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 175.4231 1754.231 10 FORMULA: 1000*(1+T)= 1754.231 - (0.85 * 1000 * 0) = 1754.231 T = 0.057812 R = 0.754231 NLIC VAII STRATEGIST 12/31/89 TO NO. YEARS 10 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/89 1000 3.532875 283.0556 FEE 12/31/90 0 3.52172 0 FEE 12/31/91 0 4.434279 0 FEE 12/31/92 0 4.668007 0 FEE 12/31/93 0 5.058773 0 FEE 12/31/94 0 5.166316 0 FEE 12/31/95 0 5.543716 0 FEE 12/31/96 0 6.259134 0 FEE 12/31/97 0 6.987403 0 FEE 12/31/98 0 8.680471 0 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 283.0556 2830.556 10 FORMULA: 1000*(1+T)= 2830.556 - (0.85 * 1000 * 0) = 2830.556 T = 0.109653 R = 1.830556 NLIC VAII DIVIDEND GROWTH 03/01/90 TO NO. YEARS 9.83436 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES - INIT DEPOSIT 03/01/90 1000 3.593818 278.2556 1 FEE 03/01/91 0 3.681886 0 0.06 2 FEE 03/01/92 0 4.1105 0 0.05 3 FEE 03/01/93 0 4.492197 0 0.05 4 03/01/94 0 4.807839 0 0.04 5 03/01/95 0 4.926142 0 0.03 6 03/01/96 0 6.569185 0 0.02 7 03/01/97 0 7.820466 0 0 8 03/01/98 0 9.87685 0 0 9 03/01/99 0 10.20242 0 0 10 12/31/99 0 10 0 0 11 N/A 0 N/A 0 0 12 N/A 0 N/A 0 0 13 N/A 0 N/A 0 0 14 FEE N/A 0 N/A 0 0 15 FEE N/A 0 N/A 0 0 RESULTING VALUE 12/31/99 10 278.2556 2782.556 9.83436 FORMULA: 1000*(1+T)= 2782.556 = 2782.556 T = 0.109668 R = 1.782556 NLIC VAII UTILITIES 03/01/90 TO NO. YEARS 9.83436 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES - INIT DEPOSIT 03/01/90 1000 3.237307 308.8987 1 FEE 03/01/91 0 3.437432 0 0.06 2 FEE 03/01/92 0 3.797553 0 0.05 3 FEE 03/01/93 0 4.683841 0 0.05 4 03/01/94 0 4.69949 0 0.04 5 03/01/95 0 4.593407 0 0.03 6 03/01/96 0 5.617825 0 0.02 7 03/01/97 0 6.011264 0 0 8 03/01/98 0 7.640277 0 0 9 03/01/99 0 8.700554 0 0 10 12/31/99 0 10 0 0 11 N/A 0 N/A 0 0 12 N/A 0 N/A 0 0 13 N/A 0 N/A 0 0 14 FEE N/A 0 N/A 0 0 15 FEE N/A 0 N/A 0 0 RESULTING VALUE 12/31/99 10 308.8987 3088.987 9.83436 FORMULA: 1000*(1+T)= 3088.987 = 3088.987 T = 0.121519 R = 2.088987 NLIC VAII EUROPEAN GROWTH 03/01/91 TO NO. YEARS 8.835044 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES - INIT DEPOSIT 03/01/91 1000 2.406977 415.4588 1 FEE 03/01/92 0 2.468413 0 0.06 2 FEE 03/01/93 0 2.560472 0 0.05 3 FEE 03/01/94 0 3.50386 0 0.05 4 03/01/95 0 3.696804 0 0.04 5 03/01/96 0 4.680252 0 0.03 6 03/01/97 0 5.706379 0 0.02 7 03/01/98 0 7.315483 0 0 8 03/01/99 0 7.747039 0 0 9 12/31/99 0 10 0 0 10 N/A 0 N/A 0 0 11 N/A 0 N/A 0 0 12 N/A 0 N/A 0 0 13 N/A 0 N/A 0 0 14 FEE N/A 0 N/A 0 0 15 FEE N/A 0 N/A 0 0 RESULTING VALUE 12/31/99 10 415.4588 4154.588 8.835044 FORMULA: 1000*(1+T)= 4154.588 = 4154.588 T = 0.17492 R = 3.154588 NLIC VAII CAPITAL GROWTH 03/01/91 TO NO. YEARS 8.835044 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES - INIT DEPOSIT 03/01/91 1000 3.336906 299.6788 1 FEE 03/01/92 0 4.031478 0 0.06 2 FEE 03/01/93 0 3.91297 0 0.05 3 FEE 03/01/94 0 3.861255 0 0.05 4 03/01/95 0 3.974889 0 0.04 5 03/01/96 0 5.122514 0 0.03 6 03/01/97 0 5.469011 0 0.02 7 03/01/98 0 7.030771 0 0 8 03/01/99 0 7.581468 0 0 9 12/31/99 0 10 0 0 10 N/A 0 N/A 0 0 11 N/A 0 N/A 0 0 12 N/A 0 N/A 0 0 13 N/A 0 N/A 0 0 14 FEE N/A 0 N/A 0 0 15 FEE N/A 0 N/A 0 0 RESULTING VALUE 12/31/99 10 299.6788 2996.788 8.835044 FORMULA: 1000*(1+T)= 2996.788 = 2996.788 T = 0.132272 R = 1.996788 NLIC VAII PACIFIC GROWTH 02/22/94 TO NO. YEARS 5.853525 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES - INIT DEPOSIT 02/22/94 1000 11.73128 85.24216 1 FEE 02/22/95 0 10.07055 0 0.06 2 FEE 02/22/96 0 12.0805 0 0.05 3 FEE 02/22/97 0 11.50798 0 0.05 4 02/22/98 0 6.999965 0 0.04 5 02/22/99 0 5.902617 0 0.03 6 12/31/99 0 10 0 0.02 7 N/A 0 N/A 0 0 8 N/A 0 N/A 0 0 9 N/A 0 N/A 0 0 10 N/A 0 N/A 0 0 11 N/A 0 N/A 0 0 12 N/A 0 N/A 0 0 13 N/A 0 N/A 0 0 14 FEE N/A 0 N/A 0 0 15 FEE N/A 0 N/A 0 0 RESULTING VALUE 12/31/99 10 85.24216 852.4216 5.853525 FORMULA: 1000*(1+T)= 852.4216 = 835.4216 T = -0.03025 R = -0.16458 NLIC VAII GLOBAL DIVIDEND GROWTH 02/22/94 TO NO. YEARS 5.853525 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES - INIT DEPOSIT 02/22/94 1000 5.357654 186.6489 1 FEE 02/22/95 0 5.318576 0 0.06 2 FEE 02/22/96 0 6.512594 0 0.05 3 FEE 02/22/97 0 7.332077 0 0.05 4 02/22/98 0 8.380012 0 0.04 5 02/22/99 0 8.630307 0 0.03 6 12/31/99 0 10 0 0.02 7 N/A 0 N/A 0 0 8 N/A 0 N/A 0 0 9 N/A 0 N/A 0 0 10 N/A 0 N/A 0 0 11 N/A 0 N/A 0 0 12 N/A 0 N/A 0 0 13 N/A 0 N/A 0 0 14 FEE N/A 0 N/A 0 0 15 FEE N/A 0 N/A 0 0 RESULTING VALUE 12/31/99 10 186.6489 1866.489 5.853525 FORMULA: 1000*(1+T)= 1866.489 = 1849.489 T = 0.110765 R = 0.849489 NLIC VAII CAPITAL APPRECIATION 01/21/97 TO NO. YEARS 2.940452 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES - INIT DEPOSIT 01/21/97 1000 10 100 1 FEE 01/21/98 0 10.95123 0 0.06 2 FEE 01/21/99 0 10.56254 0 0.05 3 FEE 12/31/99 0 10.87141 0 0.05 4 N/A 0 N/A 0 0.04 5 N/A 0 N/A 0 0.03 6 N/A 0 N/A 0 0.02 7 N/A 0 N/A 0 0 8 N/A 0 N/A 0 0 9 N/A 0 N/A 0 0 10 N/A 0 N/A 0 0 11 N/A 0 N/A 0 0 12 N/A 0 N/A 0 0 13 N/A 0 N/A 0 0 14 FEE N/A 0 N/A 0 0 15 FEE N/A 0 N/A 0 0 RESULTING VALUE 12/31/99 10.87141 100 1087.141 2.940452 FORMULA: 1000*(1+T)= 1087.141 = 1044.641 T = 0.014963 R = 0.044641 NLIC VAII INCOME BUILDER 01/21/97 TO NO. YEARS 2.940452 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES - INIT DEPOSIT 01/21/97 1000 7.807821 128.0767 1 FEE 01/21/98 0 9.364517 0 0.06 2 FEE 01/21/99 0 9.595748 0 0.05 3 FEE 12/31/99 0 10 0 0.05 4 N/A 0 N/A 0 0.04 5 N/A 0 N/A 0 0.03 6 N/A 0 N/A 0 0.02 7 N/A 0 N/A 0 0 8 N/A 0 N/A 0 0 9 N/A 0 N/A 0 0 10 N/A 0 N/A 0 0 11 N/A 0 N/A 0 0 12 N/A 0 N/A 0 0 13 N/A 0 N/A 0 0 14 FEE N/A 0 N/A 0 0 15 FEE N/A 0 N/A 0 0 RESULTING VALUE 12/31/99 10 128.0767 1280.767 2.940452 FORMULA: 1000*(1+T)= 1280.767 = 1238.267 T = 0.075387 R = 0.238267 NLIC VAII EQUITY GROWTH 01/02/97 TO NO. YEARS 2.992471 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES - INIT DEPOSIT 01/02/97 1000 4.775221 209.4144 1 FEE 01/02/98 0 6.222503 0 0.06 2 FEE 01/02/99 0 7.270607 0 0.05 3 FEE 12/31/99 0 10 0 0.05 4 N/A 0 N/A 0 0.04 5 N/A 0 N/A 0 0.03 6 N/A 0 N/A 0 0.02 7 N/A 0 N/A 0 0 8 N/A 0 N/A 0 0 9 N/A 0 N/A 0 0 10 N/A 0 N/A 0 0 11 N/A 0 N/A 0 0 12 N/A 0 N/A 0 0 13 N/A 0 N/A 0 0 14 FEE N/A 0 N/A 0 0 15 FEE N/A 0 N/A 0 0 RESULTING VALUE 12/31/99 10 209.4144 2094.144 2.992471 FORMULA: 1000*(1+T)= 2094.144 = 2051.644 T = 0.27144 R = 1.051644 NLIC VAII INTERNATIONAL MAGNUM 01/02/97 TO NO. YEARS 2.992471 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES - INIT DEPOSIT 01/02/97 1000 7.245944 138.0083 1 FEE 01/02/98 0 7.662745 0 0.06 2 FEE 01/02/99 0 8.252238 0 0.05 3 FEE 12/31/99 0 10 0 0.05 4 N/A 0 N/A 0 0.04 5 N/A 0 N/A 0 0.03 6 N/A 0 N/A 0 0.02 7 N/A 0 N/A 0 0 8 N/A 0 N/A 0 0 9 N/A 0 N/A 0 0 10 N/A 0 N/A 0 0 11 N/A 0 N/A 0 0 12 N/A 0 N/A 0 0 13 N/A 0 N/A 0 0 14 FEE N/A 0 N/A 0 0 15 FEE N/A 0 N/A 0 0 RESULTING VALUE 12/31/99 10 138.0083 1380.083 2.992471 FORMULA: 1000*(1+T)= 1380.083 = 1337.583 T = 0.102079 R = 0.337583 NLIC VAII EMERGING MARKETS 10/01/96 TO NO. YEARS 3.247091 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES - INIT DEPOSIT 10/01/96 1000 7.370272 135.6802 1 FEE 10/01/97 0 8.740294 0 0.06 2 FEE 10/01/98 0 4.427969 0 0.05 3 FEE 10/01/99 0 6.714206 0 0.05 4 12/31/99 0 10 0 0.04 5 N/A 0 N/A 0 0.03 6 N/A 0 N/A 0 0.02 7 N/A 0 N/A 0 0 8 N/A 0 N/A 0 0 9 N/A 0 N/A 0 0 10 N/A 0 N/A 0 0 11 N/A 0 N/A 0 0 12 N/A 0 N/A 0 0 13 N/A 0 N/A 0 0 14 FEE N/A 0 N/A 0 0 15 FEE N/A 0 N/A 0 0 RESULTING VALUE 12/31/99 10 135.6802 1356.802 3.247091 FORMULA: 1000*(1+T)= 1356.802 = 1322.802 T = 0.089975 R = 0.322802 NLIC VAII EMERGING GROWTH 07/03/95 TO NO. YEARS 4.495551 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES - INIT DEPOSIT 07/03/95 1000 5.558229 179.9134 1 FEE 07/03/96 0 7.528935 0 0.06 2 FEE 07/03/97 0 8.228578 0 0.05 3 FEE 07/03/98 0 10.7807 0 0.05 4 07/03/99 0 14.89841 0 0.04 5 12/31/99 0 24.19191 0 0.03 6 N/A 0 N/A 0 0.02 7 N/A 0 N/A 0 0 8 N/A 0 N/A 0 0 9 N/A 0 N/A 0 0 10 N/A 0 N/A 0 0 11 N/A 0 N/A 0 0 12 N/A 0 N/A 0 0 13 N/A 0 N/A 0 0 14 FEE N/A 0 N/A 0 0 15 FEE N/A 0 N/A 0 0 RESULTING VALUE 12/31/99 24.19191 179.9134 4352.448 4.495551 FORMULA: 1000*(1+T)= 4352.448 = 4326.948 T = 0.385204 R = 3.326948 NLIC VAII REAL ESTATE 03/04/97 TO NO. YEARS 2.825462 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES - INIT DEPOSIT 03/04/97 1000 10.41159 96.04684 1 FEE 03/04/98 0 11.80538 0 0.06 2 FEE 03/04/99 0 9.948398 0 0.05 3 FEE 12/31/99 0 10 0 0.05 4 N/A 0 N/A 0 0.04 5 N/A 0 N/A 0 0.03 6 N/A 0 N/A 0 0.02 7 N/A 0 N/A 0 0 8 N/A 0 N/A 0 0 9 N/A 0 N/A 0 0 10 N/A 0 N/A 0 0 11 N/A 0 N/A 0 0 12 N/A 0 N/A 0 0 13 N/A 0 N/A 0 0 14 FEE N/A 0 N/A 0 0 15 FEE N/A 0 N/A 0 0 RESULTING VALUE 12/31/99 10 96.04684 960.4684 2.825462 FORMULA: 1000*(1+T)= 960.4684 = 917.9684 T = -0.02984 R = -0.08203 NLIC VAII COMPETITIVE EDGE 05/18/98 TO NO. YEARS 1.620808 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES - INIT DEPOSIT 05/18/98 1000 8.330115 120.0464 1 FEE 05/18/99 0 8.390156 0 0.06 2 FEE 12/31/99 0 10 0 0.05 3 FEE N/A 0 N/A 0 0.05 4 N/A 0 N/A 0 0.04 5 N/A 0 N/A 0 0.03 6 N/A 0 N/A 0 0.02 7 N/A 0 N/A 0 0 8 N/A 0 N/A 0 0 9 N/A 0 N/A 0 0 10 N/A 0 N/A 0 0 11 N/A 0 N/A 0 0 12 N/A 0 N/A 0 0 13 N/A 0 N/A 0 0 14 FEE N/A 0 N/A 0 0 15 FEE N/A 0 N/A 0 0 RESULTING VALUE 12/31/99 10 120.0464 1200.464 1.620808 FORMULA: 1000*(1+T)= 1200.464 = 1157.964 T = 0.094708 R = 0.157964 NLIC VAII S&P 500 INDEX 05/18/98 TO NO. YEARS 1.620808 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES - INIT DEPOSIT 05/18/98 1000 7.67263 130.3334 1 FEE 05/18/99 0 9.18926 0 0.06 2 FEE 12/31/99 0 10 0 0.05 3 FEE N/A 0 N/A 0 0.05 4 N/A 0 N/A 0 0.04 5 N/A 0 N/A 0 0.03 6 N/A 0 N/A 0 0.02 7 N/A 0 N/A 0 0 8 N/A 0 N/A 0 0 9 N/A 0 N/A 0 0 10 N/A 0 N/A 0 0 11 N/A 0 N/A 0 0 12 N/A 0 N/A 0 0 13 N/A 0 N/A 0 0 14 FEE N/A 0 N/A 0 0 15 FEE N/A 0 N/A 0 0 RESULTING VALUE 12/31/99 10 130.3334 1303.334 1.620808 FORMULA: 1000*(1+T)= 1303.334 = 1260.834 T = 0.153728 R = 0.260834 NLIC VAII AGGRESSIVE EQUITY 05/03/99 TO NO. YEARS 0.66256 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES - INIT DEPOSIT 05/03/99 1000 6.930032 144.2995 1 FEE 12/31/99 0 10 0 0.06 2 FEE N/A 0 N/A 0 0.05 3 FEE N/A 0 N/A 0 0.05 4 N/A 0 N/A 0 0.04 5 N/A 0 N/A 0 0.03 6 N/A 0 N/A 0 0.02 7 N/A 0 N/A 0 0 8 N/A 0 N/A 0 0 9 N/A 0 N/A 0 0 10 N/A 0 N/A 0 0 11 N/A 0 N/A 0 0 12 N/A 0 N/A 0 0 13 N/A 0 N/A 0 0 14 FEE N/A 0 N/A 0 0 15 FEE N/A 0 N/A 0 0 RESULTING VALUE 12/31/99 10 144.2995 1442.995 0.66256 FORMULA: 1000*(1+T)= 1442.995 = 1391.995 T = 0.647373 R = 0.391995 NLIC VAII SHORT TERM BOND 05/03/99 TO NO. YEARS 0.66256 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES - INIT DEPOSIT 05/03/99 1000 9.968303 100.318 1 FEE 12/31/99 0 10 0 0.06 2 FEE N/A 0 N/A 0 0.05 3 FEE N/A 0 N/A 0 0.05 4 N/A 0 N/A 0 0.04 5 N/A 0 N/A 0 0.03 6 N/A 0 N/A 0 0.02 7 N/A 0 N/A 0 0 8 N/A 0 N/A 0 0 9 N/A 0 N/A 0 0 10 N/A 0 N/A 0 0 11 N/A 0 N/A 0 0 12 N/A 0 N/A 0 0 13 N/A 0 N/A 0 0 14 FEE N/A 0 N/A 0 0 15 FEE N/A 0 N/A 0 0 RESULTING VALUE 12/31/99 10 100.318 1003.18 0.66256 FORMULA: 1000*(1+T)= 1003.18 = 952.1798 T = -0.07129 R = -0.04782 Alliance Premier Growth 07/14/99 TO NO. YEARS 0.465435 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES - INIT DEPOSIT 07/14/99 1000 8.918047 112.1322 1 FEE 12/31/99 0 10 0 0.06 2 FEE N/A 0 N/A 0 0.05 3 FEE N/A 0 N/A 0 0.05 4 N/A 0 N/A 0 0.04 5 N/A 0 N/A 0 0.03 6 N/A 0 N/A 0 0.02 7 N/A 0 N/A 0 0 8 N/A 0 N/A 0 0 9 N/A 0 N/A 0 0 10 N/A 0 N/A 0 0 11 N/A 0 N/A 0 0 12 N/A 0 N/A 0 0 13 N/A 0 N/A 0 0 14 FEE N/A 0 N/A 0 0 15 FEE N/A 0 N/A 0 0 RESULTING VALUE 12/31/99 10 112.1322 1121.322 0.465435 FORMULA: 1000*(1+T)= 1121.322 = 1070.322 T = 0.157211 R = 0.070322 Alliance Growth 09/15/94 TO NO. YEARS 5.292266 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES - INIT DEPOSIT 09/15/94 1000 2.677121 373.5356 1 FEE 09/15/95 0 3.588545 0 0.06 2 FEE 09/15/96 0 4.158155 0 0.05 3 FEE 09/15/97 0 5.645519 0 0.05 4 09/15/98 0 5.922656 0 0.04 5 09/15/99 0 8.162554 0 0.03 6 12/31/99 0 10 0 0.02 7 N/A 0 N/A 0 0 8 N/A 0 N/A 0 0 9 N/A 0 N/A 0 0 10 N/A 0 N/A 0 0 11 N/A 0 N/A 0 0 12 N/A 0 N/A 0 0 13 N/A 0 N/A 0 0 14 FEE N/A 0 N/A 0 0 15 FEE N/A 0 N/A 0 0 RESULTING VALUE 12/31/99 10 373.5356 3735.356 5.292266 FORMULA: 1000*(1+T)= 3735.356 = 3718.356 T = 0.281654 R = 2.718356 Alliance Growth and Income 01/14/91 TO NO. YEARS 8.960986 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES - INIT DEPOSIT 01/14/91 1000 3.247654 307.9145 1 FEE 01/14/92 0 3.30218 0 0.06 2 FEE 01/14/93 0 3.499111 0 0.05 3 FEE 01/14/94 0 3.837138 0 0.05 4 01/14/95 0 3.753543 0 0.04 5 01/14/96 0 4.851859 0 0.03 6 01/14/97 0 6.24022 0 0.02 7 01/14/98 0 7.52811 0 0 8 01/14/99 0 9.002216 0 0 9 12/31/99 0 10 0 0 10 N/A 0 N/A 0 0 11 N/A 0 N/A 0 0 12 N/A 0 N/A 0 0 13 N/A 0 N/A 0 0 14 FEE N/A 0 N/A 0 0 15 FEE N/A 0 N/A 0 0 RESULTING VALUE 12/31/99 10 307.9145 3079.145 8.960986 FORMULA: 1000*(1+T)= 3079.145 = 3079.145 T = 0.133721 R = 2.079145 Aim Cap App 05/05/93 TO NO. YEARS 6.655715 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES - INIT DEPOSIT 05/05/93 1000 3.0435 328.569 1 FEE 05/05/94 0 3.573107 0 0.06 2 FEE 05/05/95 0 3.96614 0 0.05 3 FEE 05/05/96 0 5.343195 0 0.05 4 05/05/97 0 5.576905 0 0.04 5 05/05/98 0 7.008429 0 0.03 6 05/05/99 0 7.221695 0 0.02 7 12/31/99 0 10 0 0 8 N/A 0 N/A 0 0 9 N/A 0 N/A 0 0 10 N/A 0 N/A 0 0 11 N/A 0 N/A 0 0 12 N/A 0 N/A 0 0 13 N/A 0 N/A 0 0 14 FEE N/A 0 N/A 0 0 15 FEE N/A 0 N/A 0 0 RESULTING VALUE 12/31/99 10 328.569 3285.69 6.655715 FORMULA: 1000*(1+T)= 3285.69 = 3285.69 T = 0.195698 R = 2.28569 Aim Growth 05/05/93 TO NO. YEARS 6.655715 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES - INIT DEPOSIT 05/05/93 1000 3.068915 325.848 1 FEE 05/05/94 0 3.210239 0 0.06 2 FEE 05/05/95 0 3.572788 0 0.05 3 FEE 05/05/96 0 4.491925 0 0.05 4 05/05/97 0 5.26559 0 0.04 5 05/05/98 0 7.058865 0 0.03 6 05/05/99 0 8.022212 0 0.02 7 12/31/99 0 10 0 0 8 N/A 0 N/A 0 0 9 N/A 0 N/A 0 0 10 N/A 0 N/A 0 0 11 N/A 0 N/A 0 0 12 N/A 0 N/A 0 0 13 N/A 0 N/A 0 0 14 FEE N/A 0 N/A 0 0 15 FEE N/A 0 N/A 0 0 RESULTING VALUE 12/31/99 10 325.848 3258.48 6.655715 FORMULA: 1000*(1+T)= 3258.48 = 3258.48 T = 0.194205 R = 2.25848 Aim Value 05/05/93 TO NO. YEARS 6.655715 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES - INIT DEPOSIT 05/05/93 1000 2.983776 335.1459 1 FEE 05/05/94 0 3.451278 0 0.06 2 FEE 05/05/95 0 3.884901 0 0.05 3 FEE 05/05/96 0 4.660092 0 0.05 4 05/05/97 0 5.582263 0 0.04 5 05/05/98 0 7.148626 0 0.03 6 05/05/99 0 8.516922 0 0.02 7 12/31/99 0 10 0 0 8 N/A 0 N/A 0 0 9 N/A 0 N/A 0 0 10 N/A 0 N/A 0 0 11 N/A 0 N/A 0 0 12 N/A 0 N/A 0 0 13 N/A 0 N/A 0 0 14 FEE N/A 0 N/A 0 0 15 FEE N/A 0 N/A 0 0 RESULTING VALUE 12/31/99 10 335.1459 3351.459 6.655715 FORMULA: 1000*(1+T)= 3351.459 = 3351.459 T = 0.199264 R = 2.351459 Putnam International Growth 01/02/97 TO NO. YEARS 2.992471 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES - INIT DEPOSIT 01/02/97 1000 4.807404 208.0125 1 FEE 01/02/98 0 5.50082 0 0.06 2 FEE 01/02/99 0 6.364967 0 0.05 3 FEE 12/31/99 0 10 0 0.05 4 N/A 0 N/A 0 0.04 5 N/A 0 N/A 0 0.03 6 N/A 0 N/A 0 0.02 7 N/A 0 N/A 0 0 8 N/A 0 N/A 0 0 9 N/A 0 N/A 0 0 10 N/A 0 N/A 0 0 11 N/A 0 N/A 0 0 12 N/A 0 N/A 0 0 13 N/A 0 N/A 0 0 14 FEE N/A 0 N/A 0 0 15 FEE N/A 0 N/A 0 0 RESULTING VALUE 12/31/99 10 208.0125 2080.125 2.992471 FORMULA: 1000*(1+T)= 2080.125 = 2037.625 T = 0.26853 R = 1.037625 Putnam Voyager 12/31/89 TO NO. YEARS 10 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/89 1000 1.629115 613.8302 FEE 12/31/90 0 1.564439 0 FEE 12/31/91 0 2.240261 0 FEE 12/31/92 0 2.423385 0 FEE 12/31/93 0 2.819618 0 FEE 12/31/94 0 2.792479 0 FEE 12/31/95 0 3.850502 0 FEE 12/31/96 0 4.263735 0 FEE 12/31/97 0 5.287498 0 FEE 12/31/98 0 6.446365 0 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 613.8302 6138.302 10 FORMULA: 1000*(1+T)= 6138.302 - (0.85 * 1000 * 0) = 6138.302 T = 0.19896 R = 5.138302 Putnam Growth & Income 12/31/89 TO NO. YEARS 10 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE INIT DEPOSIT 12/31/89 1000 3.293155 303.6602 FEE 12/31/90 0 3.291265 0 FEE 12/31/91 0 3.840557 0 FEE 12/31/92 0 4.131669 0 FEE 12/31/93 0 4.6276 0 FEE 12/31/94 0 4.551785 0 FEE 12/31/95 0 6.099753 0 FEE 12/31/96 0 7.289498 0 FEE 12/31/97 0 8.870735 0 FEE 12/31/98 0 10.03992 0 FEE 12/31/99 0 10 0 RESULTING VALUE 12/31/99 10 303.6602 3036.602 10 FORMULA: 1000*(1+T)= 3036.602 - (0.85 * 1000 * 0) = 3036.602 T = 0.117477 R = 2.036602 MSDW Mid Cap 01/02/97 TO NO. YEARS 2.992471 12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES - INIT DEPOSIT 01/02/97 1000 5.510986 181.4557 1 FEE 01/02/98 0 7.590064 0 0.06 2 FEE 01/02/99 0 8.406858 0 0.05 3 FEE 12/31/99 0 10 0 0.05 4 N/A 0 N/A 0 0.04 5 N/A 0 N/A 0 0.03 6 N/A 0 N/A 0 0.02 7 N/A 0 N/A 0 0 8 N/A 0 N/A 0 0 9 N/A 0 N/A 0 0 10 N/A 0 N/A 0 0 11 N/A 0 N/A 0 0 12 N/A 0 N/A 0 0 13 N/A 0 N/A 0 0 14 FEE N/A 0 N/A 0 0 15 FEE N/A 0 N/A 0 0 RESULTING VALUE 12/31/99 10 181.4557 1814.557 2.992471 FORMULA: 1000*(1+T)= 1814.557 = 1772.057 T = 0.210694 R = 0.772057
EX-99 6 POWERS OF ATTORNEY POWER OF ATTORNEY WITH RESPECT TO NORTHBROOK VARIABLE ANNUITY ACCOUNT II (REGISTRANT) Know all men by these presents that Thomas J. Wilson, II, whose signature appears below, constitutes and appoints Michael J. Velotta, his attorney-in-fact, with power of substitution in any and all capacities, to sign any Form N-4 Registration Statements and amendments thereto for the Northbrook Variable Annuity Account II (Registrant) and to file the same, with exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying and confirming all that said attorney-in-fact, or his substitute or substitutes, may do or cause to be done by virtue hereof. April 25, 2000 Date /s/THOMAS J. WILSON, II Thomas J. Wilson, II President, Chief Operating Officer, (Principal Executive Officer) and Director POWER OF ATTORNEY WITH RESPECT TO NORTHBROOK VARIABLE ANNUITY ACCOUNT II (REGISTRANT) Know all men by these presents that Michael J. Velotta, whose signature appears below, constitutes and appoints Thomas J. Wilson, II, his attorney-in-fact, with power of substitution in any and all capacities, to sign any Form N-4 Registration Statements and amendments thereto for the Northbrook Variable Annuity Account II (Registrant) and to file the same, with exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying and confirming all that said attorney-in-fact, or his substitute or substitutes, may do or cause to be done by virtue hereof. April 25, 2000 Date /s/MICHAEL J. VELOTTA Michael J. Velotta Vice President, Secretary, General Counsel, and Director POWER OF ATTORNEY WITH RESPECT TO NORTHBROOK VARIABLE ANNUITY ACCOUNT II (REGISTRANT) Know all men by these presents that John R. Hunter, whose signature appears below, constitutes and appoints Thomas J. Wilson, II, and Michael J. Velotta, and each of them, his attorney-in-fact, with power of substitution, and him in any and all capacities, to sign any Form N-4 Registration Statements and amendments thereto for the Northbrook Variable Annuity Account II (Registrant) and to file the same, with exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying and confirming all that each of said attorney-in-fact, or his substitute or substitutes, may do or cause to be done by virtue hereof. April 25, 2000 Date /s/JOHN R. HUNTER John R. Hunter Vice President and Director POWER OF ATTORNEY WITH RESPECT TO NORTHBROOK VARIABLE ANNUITY ACCOUNT II (REGISTRANT) Know all men by these presents that Samuel H. Pilch, whose signature appears below, constitutes and appoints Thomas J. Wilson, II, and Michael J. Velotta, and each of them, his attorney-in-fact, with power of substitution, and him in any and all capacities, to sign any Form N-4 Registration Statements and amendments thereto for the Northbrook Variable Annuity Account II (Registrant) and to file the same, with exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying and confirming all that each of said attorney-in-fact, or his substitute or substitutes, may do or cause to be done by virtue hereof. April 25, 2000 Date /s/SAMUEL H. PILCH Samuel H. Pilch Controller POWER OF ATTORNEY WITH RESPECT TO NORTHBROOK VARIABLE ANNUITY ACCOUNT II (REGISTRANT) Know all men by these presents that Kevin R. Slawin, whose signature appears below, constitutes and appoints Thomas J. Wilson, II, and Michael J. Velotta, and each of them, his attorney-in-fact, with power of substitution, and him in any and all capacities, to sign any Form N-4 Registration Statements and amendments thereto for the Northbrook Variable Annuity Account II (Registrant) and to file the same, with exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying and confirming all that each of said attorney-in-fact, or his substitute or substitutes, may do or cause to be done by virtue hereof. April 25, 2000 Date /s/KEVIN R. SLAWIN Kevin R. Slawin Vice President and Director POWER OF ATTORNEY WITH RESPECT TO NORTHBROOK VARIABLE ANNUITY ACCOUNT II (REGISTRANT) Know all men by these presents that Casey J. Sylla, whose signature appears below, constitutes and appoints Thomas J. Wilson, II, and Michael J. Velotta, and each of them, his attorney-in-fact, with power of substitution, and him in any and all capacities, to sign any Form N-4 Registration Statements and amendments thereto for Northbrook Variable Annuity Account II (Registrant) and to file the same, with exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying and confirming all that each of said attorney-in-fact, or his substitute or substitutes, may do or cause to be done by virtue hereof. April 25, 2000 Date /s/CASEY J. SYLLA Casey J. Sylla Chief Investment Officer and Director POWER OF ATTORNEY WITH RESPECT TO NORTHBROOK VARIABLE ANNUITY ACCOUNT II (REGISTRANT) Know all men by these presents that Sarah R. Donahue, whose signature appears below, constitutes and appoints Thomas J. Wilson, II, and Michael J. Velotta, and each of them, his attorney-in-fact, with power of substitution, and him in any and all capacities, to sign any Form N-3 Registration Statements and amendments thereto for the Northbrook Variable Annuity Account II (Registrant) and to file the same, with exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying and confirming all that each of said attorney-in-fact, or his substitute or substitutes, may do or cause to be done by virtue hereof. April 25, 2000 Date /s/SARAH R. DONAHUE Sarah R. Donahue Assistant Vice President and Director POWER OF ATTORNEY WITH RESPECT TO NORTHBROOK VARIABLE ANNUITY ACCOUNT II (REGISTRANT) Know all men by these presents that Timothy N. Vander Pas, whose signature appears below, constitutes and appoints Thomas J. Wilson, II, and Michael J. Velotta, and each of them, his attorney-in-fact, with power of substitution, and him in any and all capacities, to sign any Form N-4 Registration Statements and amendments thereto for the Northbrook Variable Annuity Account II (Registrant) and to file the same, with exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying and confirming all that each of said attorney-in-fact, or his substitute or substitutes, may do or cause to be done by virtue hereof. April 25, 2000 Date /s/TIMOTHY N. VANDER PAS Timothy N. Vander Pas Assistant Vice President and Director -----END PRIVACY-ENHANCED MESSAGE-----