-----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, Tqq++/IfOEsxBjMxVT3kPBOQEvFTEcNgWptdFdAhvX5uq3gg4ZBnq24nHLCWQw7G bUjOUpfEQIHrn84NCw6cUw== 0000945094-01-000090.txt : 20010319 0000945094-01-000090.hdr.sgml : 20010319 ACCESSION NUMBER: 0000945094-01-000090 CONFORMED SUBMISSION TYPE: 485APOS PUBLIC DOCUMENT COUNT: 3 FILED AS OF DATE: 20010316 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: 1570269 FILING VALUES: FORM TYPE: 485APOS SEC ACT: SEC FILE NUMBER: 811-06116 FILM NUMBER: 1570270 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 VA3 EEDB As filed with the Securities and Exchange Commission on March 16, 2001. - -------------------------------------------------------------------------------- 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. 32 AND/OR REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 AMENDMENT NO. 39 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: CHARLES M. SMITH, JR., ESQUIRE DANIEL J. FITZPATRICK, ESQUIRE NORTHBROOK 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 Enhanced Earnings Death Benefit Plus Option ("new Option") to the Morgan Stanley Dean Witter Variable Annuity 3 contract ("Contract") described in the currently effective prospectus and Statement of Additional Information for that Contract. The new Option will be offered to new and existing Contract owners and may be selected on its own or in addition to any existing death or income benefit option. This 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 __________, TO THE MORGAN STANLEY DEAN WITTER VARIABLE ANNUITY 3 PROSPECTUS DATED MAY 2, 2000 This supplement describes the Enhanced Earnings Death Benefit Plus Option ("new Option") now available with the Morgan Stanley Dean Witter Variable Annuity 3 contract ("Contract") offered by Northbrook Life Insurance Company. 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 2: Add the following to the Table of Contents after "Statement of Additional Information Table of Contents": Appendix A A-1 Page 3: Add the following to the list of "Important Terms": Page Enhanced Earnings Death Benefit Plus Option ___ Excess of Earnings Withdrawals ___ In-Force Premium ___ In-Force Earnings ___ Page 4: Insert the following after the first bullet under the "Expenses" heading: o If you select the Enhanced Earnings Death Benefit Plus Option, you would pay an additional mortality and expense risk charge of 0.15%, 0.25% or 0.35% (depending on the age of the oldest Contract owner(or Annuitant, if the Contract owner is a non-natural person) on the date we receive the completed application or written request to add the Option, whichever is later ("Rider Application Date")). Page 7: Replace the section entitled "Variable Account Annual Expenses," with the following table: Variable Account Annual Expenses (As A Percentage Of Average Daily Net Asset Value Deducted From Each Variable Sub-Account)
- ------------------------------ --------------- --------------- -------------- --------------- --------------- With the With the With the With the Income Basic Contract Performance Death Income and Death Death Benefit Benefit Benefit Benefit Option Combination Combination Combination Option Option 2 Option 2 - ------------------------------ --------------- --------------- -------------- --------------- --------------- - ------------------------------ --------------- --------------- -------------- --------------- --------------- Mortality and Expense Risk 1.25% 1.38% 1.49% 1.55% 1.75% Charge - ------------------------------ --------------- --------------- -------------- --------------- --------------- - ------------------------------ --------------- --------------- -------------- --------------- --------------- Administrative Expense Charge 0.10% 0.10% 0.10% 0.10% 0.10% - ------------------------------ --------------- --------------- -------------- --------------- --------------- - ------------------------------ --------------- --------------- -------------- --------------- --------------- Total Variable Account Annual Expenses 1.35% 1.48% 1.59% 1.65% 1.85% - ------------------------------ --------------- --------------- -------------- --------------- --------------- - ------------------------------------------------------------------------------------------------------------- If the Enhanced Earnings Death Benefit Plus Option is elected with the Base Contract or with one of the Options listed above (assuming age is between 66 and 75 on Rider Application Date)* - ------------------------------------------------------------------------------------------------------------- - ------------------------------ --------------- --------------- -------------- --------------- --------------- Mortality and Expense Risk 1.60% 1.73% 1.84% 1.90% 2.10% Charge - ------------------------------ --------------- --------------- -------------- --------------- --------------- - ------------------------------ --------------- --------------- -------------- --------------- --------------- Administrative Expense Charge 0.10% 0.10% 0.10% 0.10% 0.10% - ------------------------------ --------------- --------------- -------------- --------------- --------------- - ------------------------------ --------------- --------------- -------------- --------------- --------------- Total Variable Account Annual Expenses 1.70% 1.83% 1.94% 2.00% 2.20% - ------------------------------ --------------- --------------- -------------- --------------- ---------------
* The mortality and expense risk charge shown for the Enhanced Earnings Death Benefit Plus Option reflects a charge of 0.35% for the Option, assuming the age of the oldest Owner (or Annuitant if the Contract owner is a non-natural person) is between 66 and 75 on the Rider Application Date. If the age of the oldest Owner (or Annuitant if the Contract owner is a non-natural person) is between 56 and 65 on the Rider Application Date, the charge for the Option is 0.25%. If the age of the oldest Owner (or Annuitant if the Contract owner is a non-natural person) is 55 or younger on the Rider Application Date, the charge for the Option is 0.15%. 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, o elected the Income and Death Benefit Combination Option 2, and o elected the Enhanced Earnings Death Benefit Plus Option (assuming age of oldest Contract owner (or Annuitant, if the Contract owner is a non-natural person) is between 66 and 75 on the Rider Application Date). 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. [TABLE TO BE FILED BY 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. [TABLE TO BE FILED BY 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 BOTH THE ENHANCED EARNINGS DEATH BENEFIT PLUS OPTION (ASSUMING AGE OF OLDEST CONTRACT OWNER (OR ANNUITANT IF THE CONTRACT OWNER IS A NON-NATURAL PERSON) IS BETWEEN 66 AND 75 ON THE RIDER APPLICATION DATE) AND THE INCOME AND DEATH BENEFIT COMBINATION OPTION 2, WITH A MORTALITY AND EXPENSE RISK CHARGE OF 2.10%. IF ANY OR ALL OF THESE FEATURES 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 UPON AN ASSUMED AVERAGE CONTRACT SIZE OF $45,000. Page 16: Replace the third paragraph under the heading "Accumulation Unit Value" with the following: We determine a separate Accumulation Unit Value for each Variable Sub-Account on each Valuation Date. We also determine separate sets of Accumulation Unit Values that reflect the cost of the Performance Death Benefit Option, the Death Benefit Combination Option, the Income Benefit Combination Option 2, the Income and Death Benefit Combination Option 2, and the Enhanced Earnings Death Benefit Plus Option (for each of the three age brackets) with the base Contract and with each of the other Options available under the Contract. Page 22: Insert the following after the first paragraph under the heading "Mortality and Expense Risk Charge": If you select the Enhanced Earnings Death Benefit Plus Option, the mortality and expense risk charge will include an additional 0.15% for the Option if, on the Rider Application Date, the oldest Contract owner (or Annuitant if the Contract owner is a non-natural person) is age 55 or younger, and an additional 0.25% if on the Rider Application Date, the oldest Owner (or Annuitant if the Contract owner is a non-natural person) is between the ages of 56 and 65, and an additional 0.35% if, on the Rider Application Date, the oldest Contract owner (or Annuitant if the Contract owner is a non-natural person) is between the ages of 66 and 75. We charge the additional fees for the Enhanced Earnings Death Benefit Plus Option to compensate us for the additional risk that we accept by providing the Option. Page 28: Replace the first paragraph under "Death Benefit Options" with the following: The Performance Death Benefit Option, Death Benefit Combination Option, Income and Death Benefit Combination Option 2, and Enhanced Earnings Death Benefit Plus Option 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 the Performance Death Benefit Option, Death Benefit Combination Option, and Income and Death Benefit Combination Option 2, the death benefit will be the greater of Death Benefit Amounts (1) through (3) above, or (4) the death benefit option you selected. For Contracts with the Enhanced Earnings Death Benefit Plus Option, the death benefit will be increased as described on page __ below. The death benefit options may not be available in all states. Page 28: Insert the following section at the end of the section entitled "Death Benefit Options:" ENHANCED EARNINGS DEATH BENEFIT PLUS OPTION If the oldest Contract owner (or Annuitant if the Contract owner is a non-natural person) is age 75 or younger as of the Rider Application Date, you may elect the Enhanced Earnings Death Benefit Plus Option. You may elect the Enhanced Earnings Death Benefit Plus Option alone or together with any other death and/or income benefit option offered under the Contract. The Enhanced Earnings Death Benefit Plus Option may not be available in all states. We may discontinue offering this Option at any time. The Enhanced Earnings Death Benefit Plus Option and the charge for this option will terminate upon the change of Contract owner (or Annuitant if the Contract owner is a non-natural person) for reasons other than death. Under the Enhanced Earnings Death Benefit Plus Option, if the oldest Contract owner (or Annuitant if the Contract owner is a non-natural person) is age 55 or younger on the Rider Application Date, the death benefit is increased by: o the lesser of In-Force Premium, excluding purchase payments made after the Rider Date and in the twelve month period immediately preceding the date of death of the Contract owner (or Annuitant if the Contract owner is a non-natural person) or 50% of In-Force Earnings. If the oldest Contract owner (or the Annuitant if the Contract owner is a non-natural person) is between the ages of 56 and 65 on the date we receive the complete application or the date we receive the written request to add this option, whichever is later, the death benefit is increased by: o the lesser of 80% of In-Force Premium, excluding purchase payments made after the Rider Date and in the twelve month period immediately preceding the date of death of the Contract owner (or Annuitant if the Contract owner is a non-natural person) or 40% of In-Force Earnings. If the oldest Contract owner (or the Annuitant if the Contract owner is a non-natural person) is between the ages of 66 and 75 on the date we receive the complete application or the date we receive the written request to add this option, whichever is later, the death benefit is increased by: o the lesser of 50% of In-Force Premium, excluding purchase payments made after the Rider Date and in the twelve month period immediately preceding the date of death of the Contract owner (or Annuitant if the Contract owner is a non-natural person) or 25% of In-Force Earnings. For purpose of calculating the Enhanced Earnings Death Benefit Plus, the following definitions apply: In-Force Premium equals the Contract Value on the date the Enhanced Earnings Death Benefit Plus Option is made a part of your Contract ("Rider Date") plus all purchase payments made after the date the Rider Date less the sum of all Excess-of-Earnings Withdrawals after the Rider Date. If the Rider Date is the same as the Issue Date, then the Contract Value on the Rider Date is equal to your initial purchase payment. In-Force Earnings equal the Contract Value minus the In-Force Premium. The In-Force Earnings amount will never be less than zero. An Excess-of-Earnings Withdrawal is the amount of a withdrawal in excess of the Death Benefit Earnings in the Contract immediately prior to the withdrawal. We will calculate the Enhanced Earnings Death Benefit Plus as of the date we receive Due Proof of Death. We will pay the Enhanced Earnings Death Benefit Plus with the death benefit as described under "Death Benefit Payments" below. The value of the Enhanced Earnings Death Benefit Plus largely depends on the amount of earnings that accumulate under your Contract. If you expect to withdraw the earnings from your Contract Value, electing the Enhanced Earnings Death Benefit Plus Option may not be appropriate. For purposes of calculating the Enhanced Earnings Death Benefit Plus, earnings are considered to be withdrawn first before purchase payments. Your Financial Advisor can help you decide if the Enhanced Earnings Death Benefit Plus Option is right for you. For examples of how the death benefit is calculated under the Enhanced Earnings Death Benefit Plus Option, see Appendix A. Page 29: Insert the following after the second sentence of the second paragraph: If you elected the Enhanced Earnings Death Benefit Plus Option, and your spouse continues the Contract as described above, the Enhanced Earnings Death Benefit Plus Option and the daily charge for this Option will terminate if your spouse is over age 75 on the date the contract is continued, or if your spouse elects to terminate the Option. If the Enhanced Earnings Death Benefit Plus Option is not terminated, on the date the Contract is continued, the Rider Date for this Option will be reset to the date the contract is continued ("new Rider Date"). The age of the oldest Contract owner on the new Rider Date will be used to determine the Enhanced Earnings Death Benefit Plus after the new Rider Date. Also, the age of the oldest Contract owner on the new Rider Date will be used to determine the mortality and expense risk charge for the Option after the new Rider Date. Page __: Insert the following after the second paragraph under the heading "Tax Qualified Contracts": THE DEATH BENEFIT AND QUALIFIED CONTRACTS. Pursuant to IRS regulations, IRAs may not invest in life insurance contracts. We do not believe that these regulations prohibit a death benefit, including that provided by the optional Enhanced Earnings Death Benefit Plus, from being provided under the Contracts when we issue the Contracts as Traditional IRAs, Roth IRAs or SIMPLE IRAs. However, 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. It is also possible that the Enhanced Earnings Death Benefit Plus could be characterized as an incidental death benefit. If the Enhanced Earnings Death Benefit Plus were so characterized, this could result in currently taxable income to a Contract Owner. In addition, there are limitations on the amount of incidental death benefits that may be provided under qualified plans, such as in connection with a 403(b) plan. Page 34: Insert the following as Appendix A: CALCULATION OF ENHANCED EARNINGS DEATH BENEFIT PLUS AMOUNT EXAMPLE 1: Assume that the oldest Owner (or Annuitant if the Contract owner is a non-natural person) is age 55 on the Rider Application Date and elects the Enhanced Earnings Death Benefit Plus Option when the contract is issued. The Owner makes an initial purchase payment of $100,000. After four years, the Owner dies. On the date Northbrook receives Due Proof of Death, the Contract Value is $125,000. Prior to his death, the Owner did not make any additional purchase payments or take any withdrawals. The calculation is: (A) Contract Value: $125,000.00 (B) Total Purchase Payments $100,000.00 (C) Total Excess-of-Earnings Withdrawals: $0.00 (D) In-Force Premium: (D) = (B) - (C) $100,000.00 (E) In-Force (E) = (A) - (D) $25,000.00 Earnings: (F) Cap: (F) = 100% * (D) $100,000.00 - -------------------------------------------------------------------------------- (G) ENHANCED EARNINGS (G) = MIN[50% * (E); (F)] $12,500.00 DEATH BENEFIT PLUS*: - -------------------------------------------------------------------------------- * If the oldest Owner (or Annuitant if the Contract owner is a non-natural person) had been between the ages of 56 and 65 on the Rider Application Date, the Enhanced Earnings Death Benefit Plus Option would be 40% of the In-Force Earnings ($10,000.00).If the oldest Owner (or Annuitant if the Contract owner is a non-natural person) had been between the ages of 66 and 75 on the Rider Application Date, the Enhanced Earnings Death Benefit Plus Option would be 25% of the In-Force Earnings ($6,250.00). EXAMPLE 2: Assume the same facts as above, except that the Owner has taken a withdrawal of $10,000 during the second year of the Contract. Immediately prior to withdrawal, the Contract Value is $105,000. The Contract Value on the date Northbrook receives Due Proof of Death will be assumed to be $114,000. The calculation of the Total Excess-of-Earnings Withdrawals is: (1) Contract Value: $105,000.00 (2) Total Purchase Payments: $100,000.00 (3) Prior Excess-of-Earnings Withdrawals: $0.00 (4) In-Force Premium: $100,000.00 (5) In-Force Earnings: (5) = (1) - (4) $5,000.00 (6) Withdrawal Amount: $10,000.00 (7) Excess-of-Earnings (7) = (6) - (5) and cannot be $5,000.00 Withdrawal: negative (8) Total Excess-of- (8) = (3) + (7) $5,000.00 Earnings Withdrawals: The calculation of the Enhanced Earnings Death Benefit Plus Option is: (A) Contract Value: $114,000.00 (B) In-Force Premium (before withdrawal): $100,000.00 (C) Total Excess-of-Earnings Withdrawals: $5,000.00 (D) In-Force Premium (after withdrawal): (D) = (B) - (C) $95,000.00 (E) In-Force Earnings: (E) = (A) - (D) $19,000.00 (F) Cap: (F) = 100% * (D) $95,000.00 - -------------------------------------------------------------------------------- (G) ENHANCED EARNINGS (G) = MIN[50% * (E); (F)] $9,500.00 DEATH BENEFIT PLUS*: - -------------------------------------------------------------------------------- * If the oldest Owner (or Annuitant if the Contract owner is a non-natural person) had been between the ages of 56 and 65 on the Rider Application Date, the Enhanced Earnings Death Benefit Plus Option would be 40% of the In-Force Earnings ($7,600.00).If the oldest Owner (or Annuitant if the Contract owner is a non-natural person) had been between the ages of 66 and 75 on the Rider Application Date, the Enhanced Earnings Death Benefit Plus Option would be 25% of the In-Force Earnings ($4,750.00). EXAMPLE 3: This example is intended to illustrate the effect of adding the Enhanced Earnings Death Benefit Plus Rider after the Contract has been issued and the effect of later purchase payments. Assume that the oldest Owner (or Annuitant if the Contract owner is a non-natural person) is age 70 on the Rider Application Date. At the time the Contract is issued, the Owner makes a purchase payment of $100,000. After two years pass, the Owner elects to add the Enhanced Earnings Death Benefit Plus Rider. On the date this Rider is added, the Contract Value is $110,000. Two years later, the Owner withdraws $50,000. Immediately prior to the withdrawal, the Contract Value is $130,000. Another two years later, the Owner makes an additional purchase payment of $40,000. Two years later, the Owner dies with a Contract Value of $140,000 on the date Northbrook receives Due Proof of Death. The calculation of the Total Excess-of-Earnings Withdrawals is: (1) Contract Value: $130,000.00 (2) Contract Value on Rider Date: $110,000.00 (3) Prior Excess-of-Earnings Withdrawals: $0.00 (4) In-Force Premium $110,000.00 (5) In-Force Earnings: (5) = (1) - (4) $20,000.00 (6) Withdrawal Amount: $50,000.00 (7) Excess-of-Earnings (7) = (6) - (5) and cannot be $30,000.00 Withdrawal: negative (8) Total Excess-of- (8) = (3) + (7) $30,000.00 Earnings Withdrawals: The calculation of the Enhanced Earnings Death Benefit Plus is: (A) Contract Value: $140,000.00 (B) In-Force Premium (before withdrawal and $110,000.00 purchase payment): (C) Total Excess-of-Earnings Withdrawals: $30,000.00 (D) Additional Purchase Payment: $40,000.00 (E) In-Force Premium (after withdrawal and purchase $120,000.00 payment): (F) In-Force Earnings: (F) = (A) - (E) $20,000.00 (G) Cap: (G) = 50% * (E) $60,000.00 - -------------------------------------------------------------------------------- (H) ENHANCED EARNINGS (H) = MIN[25% * (F); (G)] $5,000.00 DEATH BENEFIT PLUS*: - -------------------------------------------------------------------------------- * If the oldest Owner (or Annuitant if the Contract owner is a non-natural person) had been age 55 or younger on the Rider Application Date, the Enhanced Earnings Death Benefit Plus Option would be 50% of the In-Force Earnings ($10,000.00).If the oldest Owner (or Annuitant if the Contract owner is a non-natural person) had been between the ages of 56 and 65 on the Rider Application Date, the Enhanced Earnings Death Benefit Plus Option would be 40% of the In-Force Earnings ($8,000.00). PART B NORTHBROOK LIFE INSURANCE COMPANY NORTHBROOK VARIABLE ANNUITY ACCOUNT II SUPPLEMENT, DATED ______________ 2001, TO THE MORGAN STANLEY DEAN WITTER VARIABLE ANNUITY 3 STATEMENT OF ADDITIONAL INFORMATION DATED MAY 1, 2000 This supplement amends certain disclosure contained in the above-referenced Statement of Additional Information ("SAI") for the Morgan Stanley Dean Witter Variable Annuity 3 Contract ("Contract") offered by Northbrook Life Insurance Company ("Northbrook") to add the Enhanced Earnings Death Benefit Plus Option to the Contract. Under the section entitled "Standardized Total Returns", add the following separate paragraph immediately after the sixth paragraph: Contracts with the Enhanced Earnings Death Benefit Plus Option were first offered to the public as of May 1, 2001. 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 Enhanced Earnings Death Benefit Plus Option 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 under "Standardized Total Returns":
(WITH THE ENHANCED EARNINGS DEATH BENEFIT PLUS OPTION (OLDEST CONTRACT OWNER (OR ANNUITANT IF THE CONTRACT OWNER IS A NON-NATURAL PERSON) IS AGE 66-75)) 10 Years or Variable Sub-Account One Year Five Years Since Inception ------------------------------------------- (WITH THE ENHANCED EARNINGS DEATH BENEFIT PLUS OPTION (OLDEST CONTRACT OWNER (OR ANNUITANT IF THE CONTRACT OWNER IS A NON-NATURAL PERSON) IS AGE 66-75) AND THE PERFORMANCE DEATH BENEFIT OPTION) 10 Years or Variable Sub-Account One Year Five Years Since Inception ------------------------------------------- (WITH THE ENHANCED EARNINGS DEATH BENEFIT PLUS OPTION (OLDEST CONTRACT OWNER (OR ANNUITANT IF THE CONTRACT OWNER IS A NON-NATURAL PERSON) IS AGE 66-75) AND THE DEATH BENEFIT COMBINATION OPTION) 10 Years or Variable Sub-Account One Year Five Years Since Inception ------------------------------------------- (WITH THE ENHANCED EARNINGS DEATH BENEFIT PLUS OPTION (OLDEST CONTRACT OWNER (OR ANNUITANT IF THE CONTRACT OWNER IS A NON-NATURAL PERSON) IS AGE 66-75) AND THE INCOME BENEFIT COMBINATION OPTION 2) 10 Years or Variable Sub-Account One Year Five Years Since Inception ------------------------------------------- (WITH THE ENHANCED EARNINGS DEATH BENEFIT PLUS OPTION (OLDEST CONTRACT OWNER (OR ANNUITANT IF THE CONTRACT OWNER IS A NON-NATURAL PERSON) IS AGE 66-75) AND THE INCOME AND DEATH 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 Enhanced Earnings Death Benefit Plus Option were first offered to the public as of May 1, 2001. 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 Enhanced Earnings Death Benefit Plus Option reflect the historical performance of the Variable Sub-Accounts, adjusted to reflect the current charge for this feature as if it had been available throughout the periods shown, excluding the withdrawal charge but including the contract maintenance charge. Add the following tables to the performance tables under "Non-Standardized Total Returns": (WITH THE ENHANCED EARNINGS DEATH BENEFIT PLUS OPTION (OLDEST CONTRACT OWNER (OR ANNUITANT IF THE CONTRACT OWNER IS A NON-NATURAL PERSON) IS AGE 66-75)) 10 Years or Variable Sub-Account One Year Five Years Since Inception ------------------------------------------- (WITH THE ENHANCED EARNINGS DEATH BENEFIT PLUS OPTION (OLDEST CONTRACT OWNER (OR ANNUITANT IF THE CONTRACT OWNER IS A NON-NATURAL PERSON) IS AGE 66-75) AND THE PERFORMANCE DEATH BENEFIT OPTION) 10 Years or Variable Sub-Account One Year Five Years Since Inception ------------------------------------------- (WITH THE ENHANCED EARNINGS DEATH BENEFIT PLUS OPTION (OLDEST CONTRACT OWNER (OR ANNUITANT IF THE CONTRACT OWNER IS A NON-NATURAL PERSON) IS AGE 66-75) AND THE DEATH BENEFIT COMBINATION OPTION) 10 Years or Variable Sub-Account One Year Five Years Since Inception ------------------------------------------- (WITH THE ENHANCED EARNINGS DEATH BENEFIT PLUS OPTION (OLDEST CONTRACT OWNER (OR ANNUITANT IF THE CONTRACT OWNER IS A NON-NATURAL PERSON) IS AGE 66-75) AND THE INCOME BENEFIT COMBINATION OPTION 2) 10 Years or Variable Sub-Account One Year Five Years Since Inception ------------------------------------------- (WITH THE ENHANCED EARNINGS DEATH BENEFIT PLUS OPTION (OLDEST CONTRACT OWNER (OR ANNUITANT IF THE CONTRACT OWNER IS A NON-NATURAL PERSON) IS AGE 66-75) AND THE INCOME AND DEATH BENEFIT COMBINATION OPTION 2) 10 Years or Variable Sub-Account One Year Five Years Since Inception ------------------------------------------- Insert the following after the first paragraph under the heading "Adjusted Historical Total Returns": Where the returns included in the following tables give effect to the Enhanced Earnings Death Benefit Plus Option, 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 under "Adjusted Historical Total Returns": (WITH THE ENHANCED EARNINGS DEATH BENEFIT PLUS OPTION (OLDEST CONTRACT OWNER (OR ANNUITANT IF THE CONTRACT OWNER IS A NON-NATURAL PERSON) IS AGE 66-75)) 10 Years or Variable Sub-Account One Year Five Years Since Inception ------------------------------------------- (WITH THE ENHANCED EARNINGS DEATH BENEFIT PLUS OPTION (OLDEST CONTRACT OWNER (OR ANNUITANT IF THE CONTRACT OWNER IS A NON-NATURAL PERSON) IS AGE 66-75) AND THE PERFORMANCE DEATH BENEFIT OPTION) 10 Years or Variable Sub-Account One Year Five Years Since Inception ------------------------------------------- (WITH THE ENHANCED EARNINGS DEATH BENEFIT PLUS OPTION (OLDEST CONTRACT OWNER (OR ANNUITANT IF THE CONTRACT OWNER IS A NON-NATURAL PERSON) IS AGE 66-75) AND THE DEATH BENEFIT COMBINATION OPTION) 10 Years or Variable Sub-Account One Year Five Years Since Inception ------------------------------------------- (WITH THE ENHANCED EARNINGS DEATH BENEFIT PLUS OPTION (OLDEST CONTRACT OWNER (OR ANNUITANT IF THE CONTRACT OWNER IS A NON-NATURAL PERSON) IS AGE 66-75) AND THE INCOME BENEFIT COMBINATION OPTION 2) 10 Years or Variable Sub-Account One Year Five Years Since Inception ------------------------------------------- (WITH THE ENHANCED EARNINGS DEATH BENEFIT PLUS OPTION (OLDEST CONTRACT OWNER (OR ANNUITANT IF THE CONTRACT OWNER IS A NON-NATURAL PERSON) IS AGE 66-75) AND THE INCOME AND DEATH BENEFIT COMBINATION OPTION 2) 10 Years or Variable Sub-Account One Year Five Years Since Inception -------------------------------------------
Page __: Replace the two paragraphs under the heading "Experts" with the following: The consolidated financial statements of Northbrook as of December 31, 2000 and 1999 and for each of the three years in the period ended December 31, 2000 and related financial statement schedules 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, 2000 and for each of 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. Page __: Replace the first sentence under the heading "Financial Statements" with the following: The financial statements of the Variable Account as of December 31, 2000 and for the periods in the two years then ended, the financial statements and related financial statement schedule of Northbrook as of December 31, 2000 and 1999 and for each of the three years in the period ended December 31, 2000 and the accompanying Independent Auditors' Reports appear in the pages that follow. [To be filed by amendment.] PART C Part C is hereby amended to include the following exhibits: Item 24(b). EXHIBITS (4)(f) Enhanced Earnings Death Benefit Plus Rider (9)(d) Opinion and Consent of General Counsel (10)(a) Consent of Independent Auditors * (10)(b) Consent of Outside Counsel * (13)(d) 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 Northbrook, State of Illinois, on the 16th day of March, 2001. 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 16th day of March, 2001.
*/THOMAS J. WILSON, II President, Chief Operating Officer - ---------------------- and Director Thomas J. Wilson, II (Principal Executive Officer) /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 - ---------------------- (Principal Accounting Officer) Samuel H. Pilch */KEVIN R. SLAWIN Vice President - ---------------------- (Principal Accounting Officer) Kevin R. Slawin */ By Michael J. Velotta, pursuant to Powers of Attorney, filed in Registrant's Registration Statement (File no. 333-43086). **/By Michael J. Velotta, pursuant to Powers of Attorney, to be filed by Subsequent Amendment.
EXHIBIT LIST - -------------------------------------------------------------------------------- The following exhibits are filed herewith: - -------------------------------------------------------------------------------- EXHIBIT NO. DESCRIPTION (4)(f) Enhanced Earnings Death Benefit Plus Rider (9)(d) Opinion and Consent of General Counsel (10)(a) Consent of Independent Auditors * (10)(b) Consent of Outside Counsel * (13)(d) Performance Data Calculations * * To be filed by subsequent amendment. EX-4 2 0002.txt EEDB RIDER NORTHBROOK LIFE INSURANCE COMPANY (herein called "we" or "us") Enhanced Earnings Death Benefit Plus Rider This rider was issued because you selected the Enhanced Earnings Death Benefit Plus Rider. For purposes of this benefit, "Rider Date" is the date the Enhanced Earnings Death Benefit Plus Rider was made a part of your Contract: xx/xx/xxxx Definition of terms as used in this rider o Contract: The Contract or Certificate to which this rider is attached. o In-Force Earnings: The greater of (a) the current Contract Value less current In-Force Premium; or (b) zero. o In-Force Premium: If the Rider Date is equal to the Contract Date: The sum of all the purchase payments less the sum of all the Excess-of-Earnings Withdrawals. If the Rider Date is after the Contract Date: The Contract Value as of the Rider Date plus all the purchase payments made after the Rider Date less the sum of all the Excess-of-Earnings Withdrawals after the Rider Date. o Excess-of-Earnings Withdrawals: For each withdrawal, this amount is equal to the excess, if any, of the amount of the withdrawal less the amount of In-Force Earnings in the Contract immediately prior to the withdrawal. Under this rider, the following death benefit is payable upon death of any Owner (or Annuitant, if the Owner is a non-natural person) and in addition to any other Death Benefit payable under this Contract. The Enhanced Earnings Death Benefit Plus Rider will be calculated as of the date we receive due proof of death. 1. If the oldest Owner, or the Annuitant if the Owner is a non-natural person, is age 55 or younger on the date we receive the completed application or the date we receive the written request to add this rider, whichever is later, the Enhanced Earnings Death Benefit Plus Rider will be: o The lesser of 100% of In-Force Premium, excluding purchase payments made after the Rider Date and in the twelve month period immediately preceding the death of an Owner (or Annuitant, if the Owner is a non-natural person), or 50% of In-Force Earnings, calculated as of the date we receive due proof of death. If the oldest Owner, or the Annuitant if the Owner is a non-natural person, is between the ages of 56 and 65 on the date we receive the completed application or the date we receive the written request to add this rider, whichever is later, the Enhanced Earnings Death Benefit Plus Rider will be: o The lesser of 80% of In-Force Premium, excluding purchase payments made after the Rider Date and in the twelve month period immediately preceding the death of an Owner (or Annuitant, if the Owner is a non-natural person) or 40% of In-Force Earnings, calculated as of the date we receive due proof of death. If the oldest Owner, or the Annuitant if the Owner is a non-natural person, is between the ages of 66 and 75 on the date we receive the completed application or the date we receive the written request to add this rider, whichever is later, the Enhanced Earnings Death Benefit Plus Rider will be: o The lesser of 50% of In-Force Premium, excluding purchase payments made after the Rider Date and in the twelve month period immediately preceding the death of an Owner (or Annuitant, if the Owner is a non-natural person) or 25% of In-Force Earnings, calculated as of the date we receive due proof of death. If the Owner is a natural person, the Enhanced Earnings Death Benefit Plus Rider is payable and this rider will terminate and charges for this rider will cease upon receipt of due proof of death of the Owner unless the rider is continued as defined in Section III below. If the Owner is a non-natural person, the Enhanced Earnings Death Benefit Plus Rider is payable and this rider will terminate and charges for this rider will cease upon receipt of due proof of death of the Annuitant. II. Under this rider, the maximum annualized Mortality and Expense Risk Charge, as defined in the Contract, is increased as follows: On the date we receive the completed application or the date we receive the written request to add this rider, whichever is later, if the oldest Owner (or Annuitant, if the Owner is a non-natural person) is age 55 or younger, the maximum annualized Mortality and Expense Risk Charge will be increased on the Rider Date by 0.15%. On the date we receive the completed application or the date we receive the written request to add this rider, whichever is later, if the oldest Owner (or Annuitant, if the Owner is a non-natural person) is between the ages of 56 and 65, the maximum annualized Mortality and Expense Risk Charge will be increased on the Rider Date by 0.25%. On the date we receive the completed application or the date we receive the written request to add this rider, whichever is later, if the oldest Owner (or Annuitant, if the Owner is a non-natural person) is between the ages of 66 and 75, the maximum annualized Mortality and Expense Risk Charge will be increased on the Rider Date by 0.35%. III. Spousal Continuation of Enhanced Earnings Death Benefit Plus Rider Upon the death of any Owner, if the sole new Owner is your spouse and your spouse continues the Contract under the Death of Owner provision in your Contract, then this rider will also continue unless one of the following conditions apply: o The oldest new Owner is over age 75 on the date we receive due proof of death; or o The new Owner elects to terminate this rider. If this rider is terminated under the conditions described above, then the charge for this rider will cease as of the date we receive due proof of death. If the rider is continued, then the following conditions apply: o The Rider Date is reset to the date the Contract is continued; NLU944 Page 4 (02/01) o The new Rider Date is used to calculate the In-Force Premium; o The age of the oldest new Owner as of the new Rider Date will be used to determine the Enhanced Earnings Death Benefit Plus Rider after the new Rider Date; o The Mortality and Expense Risk Charge (as described above) used to determine the rider fee will change to reflect the age of the oldest new Owner as of the new Rider Date; and o The Enhanced Earnings Death Benefit Plus Rider is added to the Death Benefit amount for purposes of determining the new Contract Value on the date the Contract is continued. IV. The Enhanced Earnings Death Benefit Plus Rider will terminate and charges for this rider will cease when the Owner (or Annuitant, if the Owner is a non-natural person) is changed for reasons other than death. V. Misstatement of Age for the Enhanced Earnings Death Benefit Plus Rider If an Owner or the Annuitant's age is misstated, the Enhanced Earnings Death Benefit Plus Rider will be based on the corrected age and the Contract will be adjusted to reflect the fees that should have been assessed based on the corrected age. Except as amended by this rider, the Contract remains unchanged. [GRAPHIC OMITTED] [GRAPHIC OMITTED] Secretary Chairman and Chief Executive Officer EX-9 3 0003.txt OPINION AND CONSENT OF GENERAL COUNSEL NORTHBROOK LIFE INSURANCE COMPANY LAW AND REGULATION DEPARTMENT 3100 Sanders Road, J5B Northbrook, Illinois 60062 Direct Dial Number 847-402-2400 Facsimile 847-402-4371 Michael J. Velotta Senior Vice President, Secretary and General Counsel March 16, 2001 TO: NORTHBROOK LIFE INSURANCE COMPANY NORTHBROOK, ILLINOIS 60062 FROM: MICHAEL J. VELOTTA SENIOR 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 FILES 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 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 March 16, 2001: 1. The Company is duly organized and existing under the laws of the State of Illinois and has been duly authorized to do business by the Director of Insurance of the State of Illinois. 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 Senior Vice President, Secretary and General Counsel -----END PRIVACY-ENHANCED MESSAGE-----