-----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, HZmgY5OmFi0QpQMFPmuPLG5Jj1qASnq4MjHPcZ9m8O2V+xpts73R1O78lhJVOVcY oW/v2HQgoo7MsLv6Zk7l5g== /in/edgar/work/20000825/0000945094-00-000350/0000945094-00-000350.txt : 20000922 0000945094-00-000350.hdr.sgml : 20000922 ACCESSION NUMBER: 0000945094-00-000350 CONFORMED SUBMISSION TYPE: 485APOS PUBLIC DOCUMENT COUNT: 3 FILED AS OF DATE: 20000825 FILER: COMPANY DATA: COMPANY CONFORMED NAME: NORTHBROOK VARIABLE ANNUITY ACCOUNT II CENTRAL INDEX KEY: 0000864922 STANDARD INDUSTRIAL CLASSIFICATION: [0000 ] STATE OF INCORPORATION: IL FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 485APOS SEC ACT: SEC FILE NUMBER: 033-35412 FILM NUMBER: 709764 FILING VALUES: FORM TYPE: 485APOS SEC ACT: SEC FILE NUMBER: 811-06116 FILM NUMBER: 709765 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 0001.txt MSDW INCOME BENEFIT RIDERS As filed with the Securities and Exchange Commission on August 25, 2000. - -------------------------------------------------------------------------------- File Nos. 033-35412 811-06116 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM N-4 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 POST-EFFECTIVE AMENDMENT NO. 28 /X/ AND/OR REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 AMENDMENT NO. 35 /X/ NORTHBROOK VARIABLE ANNUITY ACCOUNT II (Exact Name of Registrant) NORTHBROOK LIFE INSURANCE COMPANY (Name of Depositor) MICHAEL J. VELOTTA VICE PRESIDENT, SECRETARY AND GENERAL COUNSEL NORTHBROOK LIFE INSURANCE COMPANY 3100 SANDERS ROAD NORTHBROOK, ILLINOIS 60062 847/402-2400 (Name and Complete Address of Agent for Service) COPIES TO: TERRY R. YOUNG, ESQUIRE DANIEL J. FITZPATRICK, ESQUIRE ALLSTATE LIFE INSURANCE COMPANY DEAN WITTER REYNOLDS INC. 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 __ on (date) pursuant to paragraph (b) of Rule 485 X 60 days after filing pursuant to paragraph (a)(1) of Rule 485 __ on (date) pursuant to paragraph (a)(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 amendment ("Amendment") to add the Income Benefit Combination Option 2 and the Income and Death Benefit Combination Option 2 ("new Options") to the Morgan Stanley Dean Witter Variable Annuity II contract ("Contract") described in the currently effective prospectus and SAI for that Contract. The new Options will be offered to Contract owners in lieu of the Enhanced Death Benefit Option, the Performance Income Benefit Option, and the Performance Benefit Combination Option ("old Options"), subject to certain exceptions. Existing Contract owners will be able to select the old Options for a limited time after the effective date of the Amendment. The Amendment is not intended to amend or delete any part of the Registration Statement, except as specifically noted herein. NORTHBROOK LIFE INSURANCE COMPANY NORTHBROOK VARIABLE ANNUITY ACCOUNT II SUPPLEMENT, DATED ____________, 2000, TO THE MORGAN STANLEY DEAN WITTER VARIABLE ANNUITY II PROSPECTUS DATED MAY 2, 2000 This supplement describes the Income Benefit Combination Option 2 and the Income and Death Benefit Combination Option 2 ("new Options") now available with the Morgan Stanley Dean Witter Variable Annuity II contract ("Contract") offered by Northbrook Life Insurance Company. The new Options are available with Contracts issued on or after the date of this supplement ("new Contracts"). The new Options are also available with Contracts issued before the date of this supplement ("existing Contracts") subject to the following limitations: the Income Benefit Combination Option 2 is not available with existing Contracts if you elect or have elected an optional income or death benefit; the Income and Death Benefit Combination Option 2 is not available with existing Contracts if you elect or have elected the Performance Income Benefit Option or the Performance Benefit Combination Option. The Enhanced Death Benefit Option, the Performance Income Benefit Option, and the Performance Benefit Combination Option described in the prospectus are not available with new Contracts. If you are an existing Contract owner, and have not elected these options, you may do so until December 31, 2000. Please keep these limitations in mind when reading the prospectus and this supplement. PLEASE KEEP IN MIND, ONCE YOU HAVE SELECTED AN OPTIONAL INCOME OR DEATH BENEFIT (EACH AN "OPTION"), YOUR ABILITY TO SELECT A DIFFERENT OPTION MAY BE LIMITED. PLEASE CONSULT WITH YOUR FINANCIAL ADVISOR CONCERNING ANY SUCH LIMITATIONS BEFORE SELECTING ANY OPTION. FURTHER, IF YOU SELECT ANOTHER OPTION, THE BENEFIT(S) UNDER THE NEW OPTION ON THE DATE WE ISSUE THE NEW OPTION WILL EQUAL THE CONTRACT VALUE. YOU WILL NOT RETAIN OR TRANSFER THE BENEFITS FROM THE EARLIER OPTION. PLEASE CONSULT WITH YOUR FINANCIAL ADVISOR CONCERNING THE EFFECT OF SELECTING A DIFFERENT OPTION BEFORE DOING SO. WE MAY DISCONTINUE THE OFFERING OF THESE OPTIONS AT ANYTIME. Please keep this supplement for future reference together with your prospectus. All capitalized terms have the same meaning as those included in the prospectus. Your prospectus is amended as follows: Page 4: Replace the first bullet in the section entitled "The Contract at a Glance" under the "Expenses" heading with the following: Total Variable Account annual fees equal to 1.35% of average daily net assets (1.48% if you select the Enhanced Death Benefit Option, the Performance Death Benefit Option, or the Performance Income Benefit Option, 1.59% if you select the Performance Benefit Combination Option, or the Death Benefit Combination Option, 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). If you qualify for and elect the Longevity Reward Rider, the annual fees are reduced by 0.07% under the basic policy or any Option listed above. See the description of each Option and the Rider for the availability of each. Page 7: Replace the "Variable Account Annual Expenses" table with the following:
With the Enhanced Death Benefit, With the Performance Performance Death Benefit Combination Benefit Option, or Option, or Death Without any Optional Performance Income Benefit Combination Option Benefit Option Option Mortality and Expense Risk Charge 1.25% 1.38% 1.49% Administrative Expense Charge 0.10% 0.10% 0.10% Total Variable Account Annual Expenses 1.35% 1.48% 1.59% -------------------------------------------- ------------------------------------ ------------------------------------ With the Income Benefit With the Income and Death Benefit Combination Option 2 Combination Option 2 Mortality and Expense Risk Charge 1.55% 1.75% Administrative Expense Charge 0.10% 0.10% Total Variable Account Annual Expenses 1.65% 1.85% ---------------------------------------------------------------------------------------------------------------------
Page 10: Replace "Example 1" with the following: EXAMPLE 1 The example below shows the dollar amount of expenses that you would bear directly or indirectly if you: o invested $1,000 in a Variable Sub-Account, o earned a 5% annual return on your investment, o 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 o elected the Income and Death Benefit Combination Option 2. THE EXAMPLE ASSUMES THAT ANY PORTFOLIO EXPENSE WAIVERS OR REIMBURSEMENT ARRANGEMENTS DESCRIBED IN THE FOOTNOTES ABOVE ARE IN EFFECT FOR THE TIME PERIODS PRESENTED BELOW. 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 FUNDS, 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 to be updated in subsequent amendment.] Page 11: Replace "Example 2" with the following: 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 FUNDS, 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 - ------------------------------------------------------------------------------------------------------- [Example to be updated in subsequent amendment.]
Replace the paragraph following "Example 2" with the following: 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. Page 15: Replace the third paragraph under the section entitled "Accumulation Unit Values" with the following: 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 Enhanced Death Benefit Option, the Performance Death Benefit Option, or the Performance Income Benefit Option, a third set of Accumulation Unit Values for the Performance Benefit Combination Option or the Death Benefit Combination Option, a fourth set of Accumulation Unit Values for 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. Page 21: Replace the first sentence under the section entitled "Mortality and Expense Risk Charge" with the following: 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 Enhanced Death Benefit Option, the Performance Death Benefit Option, or the Performance Income Benefit Option, 1.49% if you select the Death Benefit Combination Option or the Performance 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). Replace the last sentence under the section entitled "Mortality and Expense Risk Charge" with the following: We charge an additional amount for the above Options to compensate us for the additional risk that we accept by providing these Options. Page 25: Reminder: The Performance Income Benefit cannot be added to existing Contracts after December 31, 2000. It is not available with new Contracts. Page 26: After the section entitled "Performance Income Benefit" add the following: 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. We may discontinue the offering of this Option at anytime. Eligibility. If you select the Income Benefit Combination Option 2, the maximum age of any owner or Annuitant on the date we issue the Contract Rider is 75. The Income Benefit Combination Option 2 may not be available in all states. 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; You must apply the Income Base to fixed income payments or variable income payments as we may permit from time to time. Currently, you may apply the Income Base only to provide fixed income payments; 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 Combination 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. 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 (described below). o 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 Anniversary 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 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 you elect. The Income Plan you elect must satisfy the conditions described above. As described above, you may currently apply the Income Base only to receive period certain fixed income payments. If, however, you apply the Contract Value and not the Income Base to an Income Plan, then you may select fixed and/or variable income payments under any Income Plan we offer at that time. If you expect to apply your Contract Value to provide fixed and/or variable income payments, or you expect to apply your Contract Value to current annuity payment rates then in effect, electing the Income Benefit Combination Option 2 may not be appropriate. Page 26: Add "the Income and Death Benefit Combination Option 2" to the list of death benefit options in the first sentence under the heading "Death Benefit Options." Page 26: Reminder: The Enhanced Death Benefit Option cannot be added to existing Contracts after December 31, 2000. It is not available with new Contracts. Page 27: Reminder: The Performance Benefit Combination Option cannot be added to existing Contracts after December 31, 2000. It is not available with new Contracts. Page 27: After the section entitled "Performance Benefit Combination Option" add the following: 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 (described on page __) with the following modifications. Under the Income and Death Benefit Combination Option 2, the death benefit payable will be the greater of the death benefits provided by the Enhanced Death Benefit or the Performance Death Benefit (both calculated until the first Contract Anniversary after the oldest Contract owner, or annuitant if the Contract owner is a non-natural person, attains age 85). In calculating the death benefit payable provided by the Enhanced Death Benefit, for all ages, withdrawals will reduce the Enhanced Death Benefit by an amount equal to: (i) the Enhanced Death Benefit immediately before the withdrawal, multiplied by (ii) the ratio of the withdrawal amount to the Contract Value just before the withdrawal. If you select the Income and Death Benefit Combination Option 2, the maximum age of any owner or Annuitant on the date we issue the Contract Rider is 75. The Income and Death Benefit Combination Option 2 may not be available in all states. We may discontinue the offering of this Option at anytime. Page 28: Replace the third paragraph under the heading "Longevity Reward Rider" with the following: MORTALITY AND EXPENSE RISK CHARGE If you elect the Rider, then commencing on the Rider Date, we will reduce the maximum mortality and expense risk charge (M&E charge) by 0.07%. That means your M&E charge will never be greater than 1.18% (1.31% if you select the Enhanced Death Benefit Option, the Performance Death Benefit Option, or the Performance Income Benefit Option, 1.42% if you select the Performance Benefit Combination Option, or the Death Benefit Combination Option, 1.48% if you select the Income Benefit Combination Option 2, and 1.68% if you select the Income and Death Benefit Combination Option 2). The 0.10% administrative expense charge remains unchanged under the Rider. PART B NORTHBROOK LIFE INSURANCE COMPANY NORTHBROOK VARIABLE ANNUITY ACCOUNT II SUPPLEMENT, DATED ______________ 2000, TO THE MORGAN STANLEY DEAN WITTER VARIABLE ANNUITY II STATEMENT OF ADDITIONAL INFORMATION DATED MAY 2, 2000 This supplement amends the statement of additional information, dated May 2, 2000, for the Morgan Stanley Dean Witter Variable Annuity II Contracts as follows: Add the following to the fifth paragraph under "Standardized Total Returns": Contracts with the Income Benefit Combination Option 2 and the Income and Death Benefit Combination Option 2 were first offered to the public as of _____, 2000. The Variable Sub-Accounts were available for investment prior to that date. Accordingly, performance figures for Variable Sub-Accounts for periods prior to the availability of the Income Benefit Combination Option 2 and the Income and Death Benefit Combination Option 2 reflect the historical performance of the Variable Sub-Accounts, adjusted to reflect the current charge for such features as if they had been available throughout the periods shown, as well as the withdrawal and contract maintenance charge. Add the following tables to the performance tables for "Variable Annuity II Contracts" under "Standardized Total Returns": [Performance information to be provided in subsequent amendment.] (WITH THE INCOME AND DEATH BENEFIT COMBINATION OPTION 2) 10 Years or Variable Sub-Account One Year Five Years Since Inception ------------------------------------------- (WITH THE INCOME BENEFIT COMBINATION OPTION 2) 10 Years or Variable Sub-Account One Year Five Years Since Inception ------------------------------------------- Add the following to the seventh paragraph under "Non-Standardized Total Returns": Contracts with the Income Benefit Combination Option 2 and the Income and Death Benefit Combination Option 2 were first offered to the public as of _____, 2000. The Variable Sub-Accounts were available for investment prior to that date. Accordingly, performance figures for Variable Sub-Accounts for periods prior to the availability of the Income Benefit Combination Option 2 and the Income and Death Benefit Combination Option 2 reflect the historical performance of the Variable Sub-Accounts, adjusted to reflect the current charge for such features as if they had been available throughout the periods shown, but not the withdrawal and contract maintenance charge. Add the following tables to the performance tables for "Variable Annuity II Contracts" under "Non-Standardized Total Returns": [Performance information to be provided in subsequent amendment.] (WITH THE INCOME AND DEATH BENEFIT COMBINATION OPTION 2) 10 Years or Variable Sub-Account One Year Five Years Since Inception ------------------------------------------- (WITH THE INCOME BENEFIT COMBINATION OPTION 2) 10 Years or Variable Sub-Account One Year Five Years Since Inception ------------------------------------------- Replace the second paragraph under "Adjusted Historical Total Returns" with the following: 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. Where the returns included in the following tables give effect to the Enhanced Death Benefit Option, the Performance Death Benefit Option, the Performance Income Benefit Option, the Performance Benefit Combination Option, the Death Benefit Combination Option, the Income Benefit Combination Option 2, or the Income and Death Benefit Combination Option 2, the performance figures have been adjusted to reflect the current charge for the feature as if that feature had been available throughout the periods shown. Add the following tables to the performance tables for "Variable Annuity II Contracts" under "Adjusted Historical Total Returns": [Performance information to be provided in subsequent amendment.] (WITH THE INCOME AND DEATH BENEFIT COMBINATION OPTION 2) 10 Years or Variable Sub-Account One Year Five Years Since Inception ------------------------------------------- (WITH THE INCOME BENEFIT COMBINATION OPTION 2) 10 Years or Variable Sub-Account One Year Five Years Since Inception ------------------------------------------- PART C Part C is hereby amended to include the following exhibits: Item 24(b). EXHIBITS (4)(d) Income Benefit Combination Rider 2 (4)(e) Income and Death Benefit Combination Rider 2 (9)(c) Opinion and Consent of General Counsel (10)(a) Consent of Independent Auditors * (10)(b) Consent of Outside Counsel * (13)(c) Performance Data Calculations * * To be included in subsequent amendment. SIGNATURES As required by the Securities Act of 1933 and the Investment Company Act of 1940, the Registrant has caused this Registration Statement, as amended, 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 August, 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 Registration Statement, as amended, has been duly signed below by the following Directors and Officers of Northbrook Life Insurance Company on the 25th day of August, 2000. */THOMAS J. WILSON, II Director, President and Chief Executive - ---------------------- Officer Thomas J. Wilson, II /s/ MICHAEL J. VELOTTA Director, Vice President, Secretary and - ---------------------- General Counsel Michael J. Velotta */MARGARET G. DYER Director - ---------------------- Margaret G. Dyer */ MARLA G. FRIEDMAN Director and Vice President - ---------------------- Marla G. Friedman */JOHN C. LOUNDS Director - ---------------------- John C. Lounds */J. KEVIN McCARTHY Director - ---------------------- J. Kevin McCarthy */STEVEN C. VERNEY Director - ---------------------- Steven C. Verney */SAMUEL H. PILCH Vice President and Controller - ---------------------- Samuel H. Pilch */CASEY J. SYLLA Chief Investment Officer - ---------------------- Casey J. Sylla */ By Michael J. Velotta, pursuant to Power of Attorney, filed in Registrant's Registration Statement (File No. 333-43086). EXHIBIT LIST The following exhibits are filed herewith: EXHIBIT NO. DESCRIPTION (4)(d) Income Benefit Combination Rider 2 (4)(e) Income and Death Benefit Combination Rider 2 (9)(c) Opinion and Consent of General Counsel (10)(a) Consent of Independent Auditors * (10)(b) Consent of Outside Counsel * (13)(c) Performance Data Calculations * * To be included in subsequent amendment. EX-4 2 0002.txt INCOME BENEFIT RIDERS Exhibit (4)(d) Page 1 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 Secretary Chairman and Chief Executive Officer Exhibit (4)(e) 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 Secretary Chairman and Chief Executive Officer EX-9 3 0003.txt OPINION AND CONSENT OF GENERAL COUNSEL August 25, 2000 TO: NORTHBROOK LIFE INSURANCE COMPANY NORTHBROOK, ILLINOIS 60062 FROM: MICHAEL J. VELOTTA VICE PRESIDENT, SECRETARY AND GENERAL COUNSEL RE: FORM N-4 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 AND THE INVESTMENT COMPANY ACT OF 1940 FILE NOS. 333-35412 and 811-06116 With reference to the above-mentioned Registration Statement on Form N-4 ("Registration Statement") filed by Northbrook Life Insurance Company (the "Company"), as depositor, and Northbrook Variable Annuity Account II, as registrant, with the Securities and Exchange Commission covering the individual and group Flexible Premium Deferred Variable Annuity Contracts described therein, I have examined such documents and such law as I have considered necessary and appropriate, and on the basis of such examination, it is my opinion that as of August 25, 2000: 1. The Company is duly organized and existing under the laws of the State of Arizona and has been duly authorized to do business by the Director of Insurance of the State of Arizona. 2. The securities registered by the Registration Statement when issued will be valid, legal and binding obligations of the Company. I hereby consent to the filing of this opinion as an exhibit to the Registration Statement and to the use of my name under the caption "Legal Matters" in the Prospectuses constituting a part of the Registration Statement. Sincerely, /s/ Michael J. Velotta Michael J. Velotta Vice President, Secretary and General Counsel -----END PRIVACY-ENHANCED MESSAGE-----