<PAGE>

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                        SECURITIES AND EXCHANGE COMMISSION
                               Washington, DC 20549

                                     FORM 10-K

                Annual Report Pursuant to Section 13 or 15(d) of the
                         Securities Exchange Act of 1934


     The registrant meets the conditions set forth in General Instruction 
J(1)(a) and (b) of Form 10-K and is therefore filing this Form with the 
reduced disclosure format.

For fiscal year ended DECEMBER 31, 1995     Commission file numbers:  33-62193
                                                                      33-91916
                                                                      33-92842


                      GLENBROOK LIFE AND ANNUITY COMPANY
           (Exact name of registrant as specified in its charter)


             ILLINOIS                                         35-1113325
   (State or other jurisdiction of                         (I.R.S. Employer
   incorporation or organization)                         Identification No.)


                             3100 Sanders Road
                         Northbrook, Illinois 60062
              (Address of Principal executive offices) (Zip Code)


                               847/402-5000
              (Registrant's telephone number, including area code)

       Securities registered pursuant to Section 12(b) of the Act: None
       Securities registered pursuant to Section 12(g) of the Act: None

     Indicate by check mark whether the registrant (1) has filed all reports 
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 
1934 during the preceding 12 months (or for such shorter period that the 
registrant was required to file such reports), and (2) has been subject to 
such filing requirements for the past 90 days.

                              Yes  /X/       No

     As of December 31, 1995, there were 4,200 shares of common capital stock 
outstanding, par value $500 per share all of which shares are held by 
Allstate Life Insurance Company.

-------------------------------------------------------------------------------


<PAGE>


                      GLENBROOK LIFE AND ANNUITY COMPANY
         (A wholly owned subsidiary of Allstate Life Insurance Company

                      Annual Report for 1995 On Form 10-K

                               TABLE OF CONTENTS

                                                                          PAGE
                                                                          ----

PART I

Item 1.     Business**.......................................................3
Item 2.     Properties**.....................................................4
Item 3.     Legal Proceedings................................................4
Item 4.     Submission of Matters to a Vote of Security Holders*...........N/A

PART II

Item 5.     Market for Registrant's Common Equity and
              Related Stockholder Matters....................................5
Item 6.     Selected Financial Data*.......................................N/A
Item 7.     Management's Discussion and Analysis of Financial Condition
              and Results of Operations......................................5
Item 8.     Financial Statements.............................................8
Item 9.     Disagreements on Accounting and Financial Disclosure...........N/A

PART III

Item 10.    Directors and Executive Officers of the Registrant*............N/A
Item 11.    Executive Compensation*........................................N/A
Item 12.    Security Ownership of Certain Beneficial Owners and
              Management*..................................................N/A
Item 13.    Certain Relationships and Related Transactions*................N/A

PART IV

Item 14.    Exhibits, Financial Statement Schedules, and
              Reports on Form 8-K...........................................21

Index to Financial Statement Schedules.......................................8
Signatures..................................................................22

* Omitted pursuant to General Instruction J(2) of Form 10-K.
**Item prepared in accordance with General Instruction J(2) of Form 10-K.

                                     2
<PAGE>

                                   PART I

ITEM 1. BUSINESS

     Glenbrook Life and Annuity Company (hereinafter "Glenbrook Life" or the 
"Company"), is a stock life insurance company which was organized under the 
laws of the State of Illinois in 1992. The Company was originally organized 
under the laws of the State of Indiana in 1965. From 1965 to 1983 the Company 
was known as "United Standard Life Assurance Company" and from 1983 to 1992 
the Company was known as "William Penn Life Assurance Company of America." 
Glenbrook Life's products, group and individual annuities and life insurance, 
have been approved by the states where offered.

     Glenbrook Life is a wholly owned subsidiary of Allstate Life Insurance 
Company ("Allstate Life"), a stock life insurance company incorporated under 
the laws of Illinois. Allstate Life is a wholly owned subsidiary of Allstate 
Insurance Company ("Allstate"), a stock property-liability insurance company 
incorporated under the laws of Illinois. With the exception of directors' 
qualifying shares, all of the outstanding capital stock of Allstate is owned 
by The Allstate Corporation ("Corporation"). The Corporation was capitalized 
in 1993 with the contribution of all of the outstanding common stock of 
Allstate. Sears, Roebuck and Co. ("Sears") had previously been the direct 
owner of all the common stock of Allstate. On June 9, 1993 the  Corporation 
completed its initial public offering of 89,500,000 common shares. On June 
30, 1995, Sears distributed its remaining 80.3% ownership in the Corporation 
to Sears common shareholders through a tax-free dividend.

     Glenbrook Life and Allstate Life entered into reinsurance agreements, 
effective June 5, 1992, under which Glenbrook Life reinsures 
substantially all of its business with Allstate Life. Under the agreements, 
premiums, expenses and benefits under all general account contracts are 
transferred to Allstate Life and the net cash flows are invested by Allstate 
Life, to support the liabilities assumed under the reinsurance agreements.  
The funds necessary to support the operations of the Company are provided by 
Allstate Life.

     Under the Company's reinsurance agreements with Allstate Life, the 
Company reinsures all reserve liabilities with Allstate Life except for 
variable contracts. The Company's variable contract assets are held in 
legally-segregated, unitized separate accounts and are retained by the 
Company. Investment income and realized gains and losses of the separate 
account investments accrue directly to the contractholders (net of fees), and 
are not included in the Company's results of operations.

     Glenbrook Life's operations consist of one business segment which is the 
sale of life insurance and annuity products.

     Glenbrook Life's and Allstate Life's general account assets must be 
invested in accordance

                                       3
<PAGE>


with applicable state laws. These laws govern the nature and quality of 
investments that may be made by life insurance companies and the percentage 
of their assets that may be committed to any particular type of investment. 
Of Allstate Life's consolidated invested assets of $27,256 million on 
December 31, 1995, 81.5% was invested in fixed income securities, 2.9% in 
equities, 11.8% in mortgage loans, and 3.8% in real estate, short-term 
investments and other assets.

     Glenbrook Life is engaged in a business that is highly competitive 
because of the large number of stock and mutual life insurance companies and 
other entities competing in the sale of insurance and annuities. There are 
approximately 2,000 stock, mutual and other types of insurers in business in 
the United States. Several independent rating agencies regularly evaluate 
life insurer's claims paying ability, quality of investments and overall 
stability. A.M. Best Company assigns A+(Superior) to Allstate Life which 
automatically reinsures all net business of Glenbrook Life. A.M. Best Company 
also assigns Glenbrook Life the rating of A+(r) because Glenbrook Life 
automatically reinsures all business with Allstate Life. Standard & Poor's 
Insurance Rating Services assigned AA+(Excellent) to the Company's 
claims-paying ability and Moody's Investors Service assigned an Aa3 
(excellent) financial stability rating to the Company. Glenbrook Life shares 
the same ratings of its parent, Allstate Life.

     Although the federal government generally does not directly regulate the 
business of insurance, federal initiatives often have an impact on the 
business in a variety of ways. Current and proposed measures which may 
significantly affect the Company's insurance business relate to the taxation 
of insurance companies, the tax treatment of insurance products and the 
removal of barriers preventing banks from engaging in the insurance business.

     Glenbrook Life is regulated by the Securities and Exchange Commission 
("SEC") as an issuer of registered products. The SEC also regulates certain 
Glenbrook Life Separate Accounts through which the Company issues variable 
annuity contracts.

ITEM 2. PROPERTIES

     Glenbrook Life occupies office space provided by its parent, Allstate 
Life, in Northbrook, Illinois. Expenses associated with these offices are 
allocated on a indirect basis to Glenbrook Life.

ITEM 3. LEGAL PROCEEDINGS

     The Company and its Board of Directors know of no material legal 
proceedings pending to which the Company is a party or which would materially 
affect the Company. The Company is involved in pending and threatened 
litigation in the normal course of its business in which claims for monetary 
damages are asserted. Management, after consultation with legal counsel, does 
not anticipate the ultimate liability arising from such pending or threatened 
litigation to have a material effect on the financial condition of the 
Company.

                                        4
<PAGE>


                                    PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

     All of the Company's outstanding shares are owned by its parent, 
Allstate Life.  Allstate Life's outstanding shares are owned by Allstate.  
With the exception of director's qualifying shares, all of the outstanding 
capital stock of Allstate is owned by The Allstate Corporation 
("Corporation").  The Corporation was capitalized in 1993 with the 
contribution of all of the outstanding common stock of Allstate.  Sears, 
Roebuck and Co. ("Sears") had previously been the direct owner of all the 
common stock of Allstate.  On June 9, 1993 the Corporation completed its 
initial public offering of 89,500,000 common shares.  On June 30, 1995, Sears 
distributed it's remaining 80.3% ownership in the Corporation to Sears common 
shareholders through a tax-free dividend.

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND 
RESULTS OF OPERATIONS



                      MANAGEMENT'S DISCUSSION AND ANALYSIS
                OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 

GENERAL

 

    The   following  highlights  significant   factors  influencing  results  of
operations and financial position.

 

    Glenbrook Life and Annuity Company ("the Company"), which is wholly owned by
Allstate Life  Insurance Company  ("Allstate Life"),  currently issues  flexible
premium  fixed  annuities,  and  beginning in  1995,  flexible  premium deferred
variable annuity contracts  through its Separate  Accounts. The Company  markets
its products through banks and other financial institutions.

 

    The  Company reinsures all  of its annuity deposits  with Allstate Life, and
all life insurance in  force with other  reinsurers. Accordingly, the  financial
results  reflected in the Company's statements  of operations relate only to the
investment of those assets of the  Company that are not transferred to  Allstate
Life or other reinsurers under the reinsurance treaties.

 

    Separate  Account assets and liabilities  are legally segregated and carried
at fair value  in the  statements of  financial position.  The Separate  Account
investment  portfolios  were  initially funded  with  a $10  million  seed money
contribution from the Company in 1995. Investment income and realized gains  and
losses  of the Separate  Account investments, other than  the portion related to
the Company's  participation, accrue  directly to  the contractholders  (net  of
fees)   and,  therefore,  are  not  included  in  the  Company's  statements  of
operations.

                                         5 
<PAGE>

RESULTS OF OPERATIONS

 

<TABLE>
<CAPTION>
                                                                                               1995       1994       1993
                                                                                             ---------  ---------  ---------
                                                                                                     $ IN THOUSANDS
<S>                                                                                          <C>        <C>        <C>
Net investment income......................................................................  $   3,996  $   2,017  $     753
                                                                                             ---------  ---------  ---------
Realized capital gains (losses), after tax.................................................  $     298  $  --      $      54
                                                                                             ---------  ---------  ---------
Net income.................................................................................  $   2,879  $   1,294  $     529
                                                                                             ---------  ---------  ---------
Fixed income securities, at amortized cost.................................................  $  44,112  $  51,527  $   9,543
                                                                                             ---------  ---------  ---------
</TABLE>

 

    Net investment income increased  $2.0 million in 1995,  and $1.3 million  in
1994.  In both years, the  increases were attributable to  an increased level of
investments, including  the Company's  participation  in the  Separate  Accounts
during  1995, and a $40 million capital contribution received from Allstate Life
in the third  quarter of 1994.  Net income  increases of $1.6  million and  $0.8
million reflect the change in net investment income in both years.

 

    Realized  capital gains after tax of $0.3 million in 1995 were the result of
sales of  investments  to  fund  the Company's  participation  in  the  Separate
Accounts.

 

FINANCIAL POSITION

 

<TABLE>
<CAPTION>
                                                                                                      1995       1994
                                                                                                   ----------  ---------
                                                                                                      $ IN THOUSANDS
<S>                                                                                                <C>         <C>
Fixed income securities, at fair value...........................................................  $   48,815  $  49,807
                                                                                                   ----------  ---------
Unrealized net capital gains (losses) (1)........................................................  $    5,164  $  (1,720)
                                                                                                   ----------  ---------
Separate Account assets, at fair value...........................................................  $   15,578  $  --
                                                                                                   ----------  ---------
Contractholder funds.............................................................................  $1,340,925  $ 696,854
                                                                                                   ----------  ---------
Reinsurance recoverable from Allstate Life.......................................................  $1,340,925  $ 696,854
                                                                                                   ----------  ---------
</TABLE>

 
-----------------

(1)  Unrealized net capital gains (losses) exclude the effect of deferred income
    taxes.

 

    Fixed income securities are classified as available for sale and carried  in
the  statements  of  financial  position at  fair  value.  Although  the Company
generally intends to hold  its fixed income securities  for the long-term,  such
classification  affords  the Company  flexibility in  managing the  portfolio in
response to changes in market conditions.

 

    At December 31, 1995 unrealized capital gains were $5.2 million compared  to
unrealized  capital losses of $1.7 million at December 31, 1994. The significant
change in the unrealized capital gain/loss position is primarily attributable to
declining interest rates.

 

    At December 31, 1995 both contractholder funds and amounts recoverable  from
Allstate  Life under reinsurance  treaties reflect an  increase of $644 million.
These increases result from sales of  the Company's single and flexible  premium
deferred  annuities partially offset by surrenders. Reinsurance recoverable from
Allstate Life relates to policy benefit obligations ceded to Allstate Life.

                                         6
<PAGE>

    The Company's participation  in the  Separate Accounts of  $10.5 million  at
December  31, 1995 is  included in the Separate  Accounts assets. Unrealized net
capital gains arising from the Company's participation in the Separate  Accounts
was $0.3 million, net of tax, at December 31, 1995.

 

LIQUIDITY AND CAPITAL RESOURCES

 

    Allstate  Life made a $40 million capital contribution to the Company in the
third quarter of 1994.

 

    Under the  terms  of  intercompany reinsurance  agreements,  assets  of  the
Company  that relate to  insurance in force,  excluding Separate Account assets,
are transferred to Allstate  Life or other  reinsurers, who maintain  investment
portfolios which support the Company's products.

                                          7 

<PAGE>


ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

                             Financial Statements

                                     INDEX

                                                                          PAGE
                                                                          ----

Independent Auditors' Report                                                 9

Financial Statements:

     Statements of Financial Position,
       December 31, 1995 and 1994                                           10

     Statements of Operations for the Years Ended
       December 31, 1995, 1994 and 1993                                     11

     Statements of Shareholder's Equity for the Years Ended
       December 31, 1995, 1994 and 1993                                     12

     Statements of Cash Flows for the Years Ended
       December 31, 1995, 1994 and 1993                                     13

     Notes to Financial Statements                                          14

     Schedule IV - Reinsurance for the Years Ended
       December 31, 1995, 1994 and 1993                                     20

                                         8
<PAGE>

                          INDEPENDENT AUDITORS' REPORT

 

TO THE BOARD OF DIRECTORS AND SHAREHOLDER OF
GLENBROOK LIFE AND ANNUITY COMPANY:

 

    We  have  audited  the  accompanying  Statements  of  Financial  Position of
Glenbrook Life and Annuity  Company as of  December 31, 1995  and 1994, and  the
related  Statements of Operations, Shareholder's Equity  and Cash Flows for each
of the  three years  in the  period ended  December 31,  1995. Our  audits  also
included  Schedule IV --  Reinsurance. These financial  statements and financial
statement schedule  are  the responsibility  of  the Company's  management.  Our
responsibility  is  to  express an  opinion  on these  financial  statements and
financial statement schedule based on our audits.

 

    We conducted  our  audits in  accordance  with generally  accepted  auditing
standards.  Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence  supporting
the  amounts and disclosures in the financial statements. An audit also includes
assessing the  accounting  principles used  and  significant estimates  made  by
management,  as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

 

    In our opinion, such  financial statements present  fairly, in all  material
respects,  the financial  position of Glenbrook  Life and Annuity  Company as of
December 31, 1995 and 1994, and the results of its operations and its cash flows
for each of the three years in the period ended December 31, 1995 in  conformity
with generally accepted accounting principles. Also, in our opinion, Schedule IV
--  Reinsurance, when considered  in relation to  the basic financial statements
taken as a whole, presents fairly, in all material respects, the information set
forth therein.

 

    As discussed in  Note 3  to the financial  statements, in  1993 the  Company
changed its method of accounting for investments in fixed income securities.

 

/s/ DELOITTE & TOUCHE LLP

 

Chicago, IL


March 1, 1996

 
                                      9
<PAGE>
                       GLENBROOK LIFE AND ANNUITY COMPANY
                        STATEMENTS OF FINANCIAL POSITION
 

<TABLE>
<CAPTION>
                                                                                                       DECEMBER 31,
                                                                                                   ---------------------
                                                                                                      1995       1994
                                                                                                   ----------  ---------
                                                                                                     ($ IN THOUSANDS)
<S>                                                                                                <C>         <C>
Assets
  Investments
    Fixed income securities
      Available for sale, at fair value (amortized cost $44,112 and $51,527).....................  $   48,815  $  49,807
    Short-term...................................................................................       2,102        924
                                                                                                   ----------  ---------
        Total investments........................................................................      50,917     50,731
  Reinsurance recoverable from Allstate Life Insurance Company...................................   1,340,925    696,854
  Cash...........................................................................................         264
  Deferred income taxes..........................................................................                    542
  Other assets...................................................................................       2,021      2,118
  Separate Accounts..............................................................................      15,578
                                                                                                   ----------  ---------
        Total assets.............................................................................  $1,409,705  $ 750,245
                                                                                                   ----------  ---------
                                                                                                   ----------  ---------
Liabilities
  Contractholder funds...........................................................................  $1,340,925  $ 696,854
  Income taxes payable...........................................................................       1,637        605
  Deferred income taxes..........................................................................       1,828
  Net payable to Allstate Life Insurance Company.................................................         255        128
  Separate Accounts..............................................................................       5,048
                                                                                                   ----------  ---------
        Total liabilities........................................................................   1,349,693    697,587
                                                                                                   ----------  ---------
Shareholder's equity
  Common stock ($500 par value, 4,200 shares authorized, issued, and outstanding)................       2,100      2,100
  Additional capital paid-in.....................................................................      49,641     49,641
  Unrealized net capital gains (losses)..........................................................       3,357     (1,118)
  Retained income................................................................................       4,914      2,035
                                                                                                   ----------  ---------
        Total shareholder's equity...............................................................      60,012     52,658
                                                                                                   ----------  ---------
        Total liabilities and shareholder's equity...............................................  $1,409,705  $ 750,245
                                                                                                   ----------  ---------
                                                                                                   ----------  ---------
</TABLE>

 

                       See notes to financial statements.

 
                                     10
<PAGE>

                       GLENBROOK LIFE AND ANNUITY COMPANY
                            STATEMENTS OF OPERATIONS

 

<TABLE>
<CAPTION>
                                                                                                  YEAR ENDED DECEMBER 31,
                                                                                              -------------------------------
                                                                                                1995       1994       1993
                                                                                              ---------  ---------  ---------
                                                                                                     ($ IN THOUSANDS)
<S>                                                                                           <C>        <C>        <C>
Revenues
  Net investment income.....................................................................  $   3,996  $   2,017  $     753
  Realized capital gains (losses)...........................................................        459                    83
                                                                                              ---------  ---------        ---
Income before income taxes..................................................................      4,455      2,017        836
Income tax expense..........................................................................      1,576        723        307
                                                                                              ---------  ---------        ---
Net income..................................................................................  $   2,879  $   1,294  $     529
                                                                                              ---------  ---------        ---
                                                                                              ---------  ---------        ---
</TABLE>

 

                       See notes to financial statements.

 
                                      11
<PAGE>
                       GLENBROOK LIFE AND ANNUITY COMPANY
                       STATEMENTS OF SHAREHOLDER'S EQUITY
 

<TABLE>
<CAPTION>
                                                                            ADDITIONAL   UNREALIZED NET
                                                                 COMMON       CAPITAL     CAPITAL GAINS    RETAINED
                                                                  STOCK       PAID-IN       (LOSSES)        INCOME       TOTAL
                                                               -----------  -----------  ---------------  -----------  ---------
                                                                                       ($ IN THOUSANDS)
<S>                                                            <C>          <C>          <C>              <C>          <C>
Balance, December 31, 1992...................................   $   2,100    $   9,641      $     (10)     $     212   $  11,943
  Net income.................................................                                                    529         529
  Change in unrealized net capital gains and losses..........                                     703                        703
                                                                    -----   -----------        ------          -----   ---------
Balance, December 31, 1993...................................       2,100        9,641            693            741      13,175
  Net income.................................................                                                  1,294       1,294
  Capital contribution.......................................                   40,000                                    40,000
  Change in unrealized net capital gains and losses..........                                  (1,811)                    (1,811)
                                                                    -----   -----------        ------          -----   ---------
Balance, December 31, 1994...................................       2,100       49,641         (1,118)         2,035      52,658
  Net income.................................................                                                  2,879       2,879
  Change in unrealized net capital gains and losses..........                                   4,475                      4,475
                                                                    -----   -----------        ------          -----   ---------
Balance, December 31, 1995...................................   $   2,100    $  49,641      $   3,357      $   4,914   $  60,012
                                                                    -----   -----------        ------          -----   ---------
                                                                    -----   -----------        ------          -----   ---------
</TABLE>

 

                       See notes to financial statements.

 
                                      12
<PAGE>

                       GLENBROOK LIFE AND ANNUITY COMPANY
                            STATEMENTS OF CASH FLOWS

 

<TABLE>
<CAPTION>
                                                                                             YEAR ENDED DECEMBER 31,
                                                                                         -------------------------------
                                                                                           1995       1994       1993
                                                                                         ---------  ---------  ---------
                                                                                                ($ IN THOUSANDS)
<S>                                                                                      <C>        <C>        <C>
Cash flows from operating activities
  Net income...........................................................................  $   2,879  $   1,294  $     529
  Adjustments to reconcile net income to net cash from operating activities
    Deferred income taxes..............................................................        (39)
    Realized capital gains.............................................................       (459)                  (83)
    Changes in other operating assets and liabilities..................................      1,217       (180)       656
                                                                                         ---------  ---------  ---------
      Net cash from operating activities...............................................      3,598      1,114      1,102
                                                                                         ---------  ---------  ---------
Cash flows from investing activities
  Fixed income securities available for sale
    Proceeds from sales................................................................      7,836                 3,015
    Investment collections.............................................................      1,568        649        969
    Investment purchases...............................................................     (1,491)   (42,729)    (3,737)
  Participation in Separate Account....................................................    (10,069)
  Change in short-term investments, net................................................     (1,178)       667     (1,102)
                                                                                         ---------  ---------  ---------
      Net cash from investing activities...............................................     (3,334)   (41,413)      (855)
                                                                                         ---------  ---------  ---------
Cash flows from financing activities
  Capital contribution.................................................................                40,000
                                                                                         ---------  ---------  ---------
      Net cash from financing activities...............................................     --         40,000     --
                                                                                         ---------  ---------  ---------
Net increase (decrease) in cash........................................................        264       (299)       247
Cash at beginning of year..............................................................     --            299         52
                                                                                         ---------  ---------  ---------
Cash at end of year....................................................................  $     264  $  --      $     299
                                                                                         ---------  ---------  ---------
                                                                                         ---------  ---------  ---------
</TABLE>

 

                       See notes to financial statements.

 
                                      13
<PAGE>

                       GLENBROOK LIFE AND ANNUITY COMPANY
                         NOTES TO FINANCIAL STATEMENTS
                                ($ IN THOUSANDS)

 

1.  ORGANIZATION AND NATURE OF OPERATIONS


    Glenbrook  Life  and  Annuity Company  (the  "Company") is  wholly  owned by
Allstate Life  Insurance Company  ("Allstate Life"),  which is  wholly owned  by
Allstate  Insurance  Company  ("Allstate"),  a  wholly-owned  subsidiary  of The
Allstate Corporation (the "Corporation"). On  June 30, 1995, Sears, Roebuck  and
Co. ("Sears") distributed its 80.3% ownership in the Corporation to Sears common
shareholders through a tax-free dividend (the "Distribution").

 

    The  Company develops and markets flexible premium deferred variable annuity
contracts and  single and  flexible premium  deferred annuities  to  individuals
through banks and financial institutions in the United States.

 

    Annuity  contracts  issued  by  the  Company  are  subject  to discretionary
withdrawal or surrender by the  contractholder, subject to applicable  surrender
charges. These contracts are reinsured with Allstate Life (Note 4) which selects
assets   to  meet  the  anticipated  cash   flow  requirements  of  the  assumed
liabilities. Allstate Life utilizes various modeling techniques in managing  the
relationship  between assets and liabilities  and employs strategies to maintain
investments which are sufficiently liquid to meet obligations to contractholders
in various interest rate scenarios.

 

    The Company monitors  economic and  regulatory developments  which have  the
potential  to impact its business. Currently there is proposed legislation which
would permit banks greater participation  in securities businesses, which  could
eventually  present an increased level of competition for sales of the Company's
annuity contracts. Furthermore, the federal  government may enact changes  which
could  possibly eliminate  the tax-advantaged  nature of  annuities or eliminate
consumers' need for tax deferral,  thereby reducing the incentive for  customers
to  purchase the  Company's products.  While it is  not possible  to predict the
outcome of such issues  with certainty, management  evaluates the likelihood  of
various  outcomes and  develops strategies, as  appropriate, to  respond to such
challenges.

 

    Certain reclassifications  have  been  made  to  the  prior  year  financial
statements to conform to the presentation for the current year.

 

2.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES


LIFE INSURANCE ACCOUNTING

 

    The  Company sells long-duration  contracts that do  not involve significant
risk of policyholder  mortality or  morbidity (principally  single and  flexible
premium annuities) which are considered investment contracts.

 

CONTRACTHOLDER FUNDS

 

    Contractholder  funds  arise  from  the  issuance  of  individual  and group
annuities that include an investment  component. Payments received are  recorded
as  interest-bearing  liabilities. Contractholder  funds  are equal  to deposits
received and  interest  accrued  to  the  benefit  of  the  contractholder  less
withdrawals,  mortality charges  and administrative  expenses. Credited interest
rates on contractholder funds ranged from 3.0% to 7.4% for those contracts  with
fixed interest rates and from 4.25% to 7.9% for those with flexible rates during
1995.

 

SEPARATE ACCOUNTS

 

    During  1995, the Company issued  flexible premium deferred variable annuity
contracts, the  assets  and liabilities  of  which are  legally  segregated  and
reflected  in the  accompanying statements of  financial position  as assets and
liabilities of  the  Separate  Accounts  (Glenbrook  Life  and  Annuity  Company
Variable Annuity Account and Glenbrook Life and Annuity Company Separate Account
A),  unit  investment  trusts  registered   with  the  Securities  and  Exchange
Commission. Assets of the Separate Accounts are invested in funds of  management
investment  companies. For certain  variable annuity contracts,  the Company has
entered into an exclusive distribution arrangement with distributors.

 

    The assets of the  Separate Accounts are carried  at fair value.  Unrealized
gains  and losses on the Company's participation in the Separate Account, net of
deferred income taxes,  is shown  as a  component of  shareholder's equity.  The
Company's  participation  in  the  Separate  Account,  amounting  to  $10,530 at
December 31,  1995, is  subject  to certain  withdrawal restrictions  which  are
dependent  upon aggregate fund net asset  values. In addition, limitations exist
with regard to the maximum amount which  can be withdrawn by the Company  within
any 30-day period.

 

    Investment  income and realized  gains and losses  of the Separate Accounts,
other than the portion related  to the Company's participation, accrue  directly
to  the contractholders  and, therefore,  are not  included in  the accompanying
statements of operations.  Revenues to  the Company from  the Separate  Accounts
consist  of  contract maintenance  fees, administrative  fees and  mortality and
expense risk charges, which are entirely ceded to Allstate Life.

 
                                      14
<PAGE>

                       GLENBROOK LIFE AND ANNUITY COMPANY
                   NOTES TO FINANCIAL STATEMENTS (CONTINUED)
                                ($ IN THOUSANDS)

 

2.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)


REINSURANCE

 

    Beginning June 5, 1992, the Company  reinsures all new business to  Allstate
Life  (Note  4).  Life  insurance  in  force prior  to  that  date  is  ceded to
non-affiliated reinsurers.

 

    Contract charges and credited interest are  ceded and reflected net of  such
cessions   in  the   statements  of  operations.   Reinsurance  recoverable  and
contractholder funds  are reported  separately in  the statements  of  financial
position.

 

INVESTMENTS

 

    Fixed  income securities include bonds and mortgage-backed securities. Fixed
income securities are carried  at fair value.  The difference between  amortized
cost  and fair value, net  of deferred income taxes,  is reflected as a separate
component of  shareholder's  equity.  Provisions  are made  to  write  down  the
carrying  value of fixed income securities for  declines in value that are other
than temporary.  Such writedowns  are  included in  realized capital  gains  and
losses.

 

    Short-term investments are carried at cost which approximates fair value.

 

    Investment  income consists primarily of interest, which is recognized on an
accrual basis. Interest  income on mortgage-backed  securities is determined  on
the effective yield method, based on the estimated principal repayments. Accrual
of  income is suspended for fixed income  securities that are in default or when
the receipt of interest payments is in doubt. Realized capital gains and  losses
are determined on a specific identification basis.

 

INCOME TAXES

 

    The  income tax provision is calculated under the liability method. Deferred
tax assets and  liabilities are  recorded based  on the  difference between  the
financial  statement and tax bases of assets and liabilities and the enacted tax
rates. Deferred income taxes also arise from unrealized capital gains or  losses
on fixed income securities carried at fair value.

 

USE OF ESTIMATES

 

    The  preparation  of  financial  statements  in  conformity  with  generally
accepted  accounting  principles  requires  management  to  make  estimates  and
assumptions  that affect  the amounts reported  in the  financial statements and
accompanying notes. Actual results could differ from those estimates.

 

3.  ACCOUNTING CHANGE


    Effective December  31, 1993,  the Company  adopted Statement  of  Financial
Accounting  Standards ("SFAS") No.  115, "Accounting for  Certain Investments in
Debt and Equity Securities." SFAS  No. 115 requires that investments  classified
as  available  for  sale be  carried  at  fair value.  Previously,  fixed income
securities classified  as  available for  sale  were  carried at  the  lower  of
amortized  cost or fair  value, determined in  the aggregate. Unrealized holding
gains and losses are reflected as a separate component of shareholder's  equity,
net  of deferred  income taxes.  The net  effect of  adoption of  this statement
increased shareholder's equity at December 31,  1993 by $693, with no impact  on
net income.

 

4.  RELATED PARTY TRANSACTIONS


REINSURANCE

 

    Contract  charges ceded to  Allstate Life under  reinsurance agreements were
$1,523 and $409 in 1995 and  1994, respectively. Credited interest and  expenses
ceded  to  Allstate Life  amounted  to $71,905  and  $26,177 in  1995  and 1994,
respectively.  Investment   income   earned   on  the   assets   which   support
contractholder  funds is not  included in the  Company's financial statements as
those assets were transferred  to Allstate Life under  the terms of  reinsurance
treaties.  Reinsurance ceded  arrangements do not  discharge the  Company as the
primary insurer.

 

BUSINESS OPERATIONS

 

    The Company utilizes services and  business facilities owned or leased,  and
operated  by  Allstate  in  conducting  its  business  activities.  The  Company
reimburses Allstate for the operating expenses incurred by Allstate on behalf of
the Company. The cost to the Company is determined by various allocation methods
and is primarily related to the level of services provided. Operating  expenses,
including  compensation and retirement and  other benefit programs, allocated to
the Company  were $348,  $271 and  $59  in 1995,  1994 and  1993,  respectively.
Investment-related  expenses are  retained by the  Company. All  other costs are
assumed by Allstate Life under reinsurance treaties.

 
                                      15
<PAGE>

                       GLENBROOK LIFE AND ANNUITY COMPANY
                   NOTES TO FINANCIAL STATEMENTS (CONTINUED)
                                ($ IN THOUSANDS)

 

4.  RELATED PARTY TRANSACTIONS (CONTINUED)


LAUGHLIN GROUP

 

    Laughlin Group,  Inc. ("Laughlin"),  a wholly-owned  subsidiary of  Laughlin
Group  Holdings  Inc.,  a wholly-owned  subsidiary  of Allstate  Life  which was
acquired in  September 1995,  is a  third-party marketer  which distributes  the
products  of  insurance carriers  including  the Company.  Laughlin  markets the
Company's flexible  premium deferred  variable  annuity contracts  and  flexible
premium deferred annuities. Sales commissions paid to Laughlin subsequent to the
acquisition date of $3,439 were ceded to Allstate Life.

 

5.  INCOME TAXES


    Allstate  Life and its  life insurance subsidiaries,  including the Company,
will file a consolidated federal income tax return. Tax liabilities and benefits
realized by the consolidated group are allocated as generated by the  respective
subsidiaries,  whether or not such benefits  generated by the subsidiaries would
be available  on a  separate  return basis.  The  Corporation and  its  domestic
subsidiaries  including the Company (the "Allstate  Group"), will be eligible to
file a consolidated tax return beginning in the year 2000.

 

    Prior to the  Distribution, the  Allstate Group  joined with  Sears and  its
domestic  business units  (the "Sears  Group") in  the filing  of a consolidated
federal income tax return (the "Sears Tax Group") and were parties to a  federal
income  tax allocation agreement  (the "Tax Sharing Agreement").  As a member of
the Sears Tax Group,  the Corporation was jointly  and severally liable for  the
consolidated  income tax liability of the Sears Tax Group. Under the Tax Sharing
Agreement, the Company, through  the Corporation, paid to  or received from  the
Sears  Group the amount, if  any, by which the  Sears Tax Group's federal income
tax liability was affected by virtue of  inclusion of the Allstate Group in  the
consolidated  federal  income  tax  return. Effectively,  this  resulted  in the
Company's annual income tax provision being  computed as if the Company filed  a
separate  return, except that items such as net operating losses, capital losses
or similar  items which  might not  be immediately  recognizable in  a  separate
return,  were allocated according to the  Tax Sharing Agreement and reflected in
the Company's provision  to the  extent that such  items reduced  the Sears  Tax
Group's federal tax liability.

 

    The  Allstate Group  and Sears  Group have  entered into  an agreement which
governs their respective rights and  obligations with respect to federal  income
taxes  for all periods prior to the Distribution ("Consolidated Tax Years"). The
agreement provides that all Consolidated Tax Years will continue to be  governed
by  the Tax Sharing Agreement  with respect to the  Company's federal income tax
liability and taxes payable to or recoverable from the Sears Group.

 

    The components of the deferred income tax assets and liabilities at December
31, 1995 and 1994 are as follows:

 

<TABLE>
<CAPTION>
                                                                                                           1995       1994
                                                                                                         ---------  ---------
<S>                                                                                                      <C>        <C>
Unrealized net capital losses on fixed income securities...............................................  $  --      $     602
Other..................................................................................................                     4
                                                                                                         ---------        ---
  Total deferred assets................................................................................     --            606
                                                                                                         ---------        ---
                                                                                                         ---------        ---
Unrealized net capital gains on fixed income securities................................................  $  (1,807)
Difference in tax bases of investments.................................................................        (21)
Other..................................................................................................                   (64)
                                                                                                         ---------        ---
  Total deferred liabilities...........................................................................     (1,828)       (64)
                                                                                                         ---------        ---
  Net deferred (liability) asset.......................................................................  $  (1,828) $     542
                                                                                                         ---------        ---
                                                                                                         ---------        ---
</TABLE>

 

    The components of income tax expense are as follows:

 

<TABLE>
<CAPTION>
                                                                                                  YEAR ENDED DECEMBER 31,
                                                                                              -------------------------------
                                                                                                1995       1994       1993
                                                                                              ---------  ---------  ---------
<S>                                                                                           <C>        <C>        <C>
Current.....................................................................................  $   1,615  $     652  $     290
Deferred....................................................................................        (39)        71         17
                                                                                              ---------        ---        ---
  Income tax expense........................................................................  $   1,576  $     723  $     307
                                                                                              ---------        ---        ---
                                                                                              ---------        ---        ---
</TABLE>

 

    The Company paid income taxes of $874, $57 and $290 in 1995, 1994 and  1993,
respectively,  under the  Tax Sharing  Agreement. The  Company had  income taxes
payable to Allstate  Life of  $1,637 and  $605 at  December 31,  1995 and  1994,
respectively.

 
                                      16
<PAGE>

                       GLENBROOK LIFE AND ANNUITY COMPANY
                   NOTES TO FINANCIAL STATEMENTS (CONTINUED)
                                ($ IN THOUSANDS)

 

6.  INVESTMENTS


FAIR VALUES

 

    The  amortized cost,  fair value and  gross unrealized gains  and losses for
fixed income securities are as follows:

 

<TABLE>
<CAPTION>
                                                                                                GROSS UNREALIZED
                                                                                  AMORTIZED   --------------------
                                                                                    COST        GAINS     LOSSES    FAIR VALUE
                                                                                 -----------  ---------  ---------  -----------
<S>                                                                              <C>          <C>        <C>        <C>
AT DECEMBER 31, 1995
U.S. government and agencies...................................................   $  24,722   $   3,470     --       $  28,192
Corporate......................................................................       1,304         120                  1,424
Mortgage-backed securities.....................................................      18,086       1,113                 19,199
                                                                                 -----------  ---------  ---------  -----------
  Totals.......................................................................   $  44,112   $   4,703     --       $  48,815
                                                                                 -----------  ---------  ---------  -----------
                                                                                 -----------  ---------  ---------  -----------
AT DECEMBER 31, 1994
U.S. government and agencies...................................................   $  31,005   $      30  $   1,126   $  29,909
Mortgage-backed securities.....................................................      20,522                    624      19,898
                                                                                 -----------  ---------  ---------  -----------
  Total........................................................................   $  51,527   $      30  $   1,750   $  49,807
                                                                                 -----------  ---------  ---------  -----------
                                                                                 -----------  ---------  ---------  -----------
</TABLE>

 

SCHEDULED MATURITIES

 

    The scheduled maturities of  fixed income securities  available for sale  at
December 31, 1995 are as follows:

 

<TABLE>
<CAPTION>
                                                                                                      AMORTIZED     FAIR
                                                                                                        COST        VALUE
                                                                                                     -----------  ---------
<S>                                                                                                  <C>          <C>
Due in one year or less............................................................................   $     398   $     403
Due after one year through five years..............................................................
Due after five years through ten years.............................................................      15,883      17,681
Due after ten years................................................................................       9,745      11,532
                                                                                                     -----------  ---------
                                                                                                         26,026      29,616
Mortgage-backed securities.........................................................................      18,086      19,199
                                                                                                     -----------  ---------
  Total............................................................................................   $  44,112   $  48,815
                                                                                                     -----------  ---------
                                                                                                     -----------  ---------
</TABLE>

 

    Actual maturities may differ from those scheduled as a result of prepayments
by the issuers.

 

UNREALIZED NET CAPITAL GAINS AND LOSSES

 

    Unrealized  net capital gains and losses  on fixed income securities and the
Company's participation in the Separate Account included in shareholder's equity
at December 31, 1995 are as follows:

 

<TABLE>
<CAPTION>
                                                                                                                UNREALIZED
                                                                                         AMORTIZED     FAIR     NET GAINS/
                                                                                           COST        VALUE     (LOSSES)
                                                                                        -----------  ---------  -----------
<S>                                                                                     <C>          <C>        <C>
Fixed income securities...............................................................   $  44,112   $  48,815   $   4,703
Participation in Separate Account.....................................................      10,069      10,530         461
Deferred income taxes.................................................................                              (1,807)
                                                                                                                -----------
  Total...............................................................................                           $   3,357
                                                                                                                -----------
                                                                                                                -----------
</TABLE>

 
                                      17
<PAGE>

                       GLENBROOK LIFE AND ANNUITY COMPANY
                   NOTES TO FINANCIAL STATEMENTS (CONTINUED)
                                ($ IN THOUSANDS)

 

6.  INVESTMENTS (CONTINUED)


    The change  in unrealized  net capital  gains and  losses for  fixed  income
securities  and  the  Company's  participation in  the  Separate  Account  is as
follows:

 

<TABLE>
<CAPTION>
                                                                                                  YEAR ENDED DECEMBER 31,
                                                                                              -------------------------------
                                                                                                1995       1994       1993
                                                                                              ---------  ---------  ---------
<S>                                                                                           <C>        <C>        <C>
Fixed income securities.....................................................................  $   6,423  $  (2,786) $   1,076
Participation in Separate Account in 1995...................................................        461
Deferred income taxes.......................................................................     (2,409)       975       (373)
                                                                                              ---------  ---------  ---------
Change in unrealized net capital gains and losses...........................................  $   4,475  $  (1,811) $     703
                                                                                              ---------  ---------  ---------
                                                                                              ---------  ---------  ---------
</TABLE>

 

COMPONENTS OF NET INVESTMENT INCOME

 

    Investment income by investment type is as follows:

 

<TABLE>
<CAPTION>
                                                                                                     YEAR ENDED DECEMBER 31,
                                                                                                 -------------------------------
                                                                                                   1995       1994       1993
                                                                                                 ---------  ---------  ---------
<S>                                                                                              <C>        <C>        <C>
Investment income:
  Fixed income securities......................................................................  $   3,850  $   1,984  $     729
  Short-term...................................................................................        113         48         35
  Participation in Separate Account in 1995....................................................         69
                                                                                                 ---------  ---------        ---
Investment income, before expense..............................................................      4,032      2,032        764
Investment expense.............................................................................         36         15         11
                                                                                                 ---------  ---------        ---
Net investment income..........................................................................  $   3,996  $   2,017  $     753
                                                                                                 ---------  ---------        ---
                                                                                                 ---------  ---------        ---
</TABLE>

 

REALIZED CAPITAL GAINS AND LOSSES

 

    Realized capital gains on investments are as follows:

 

<TABLE>
<CAPTION>
                                                                                                         YEAR ENDED
                                                                                                        DECEMBER 31,
                                                                                                      ----------------
                                                                                                      1995  1994  1993
                                                                                                      ----  ----  ----
<S>                                                                                                   <C>   <C>   <C>
Fixed income securities.............................................................................  $459  $--   $83
Income tax..........................................................................................   161         29
                                                                                                      ----  ----  ----
Net realized gains..................................................................................  $298  $--   $54
                                                                                                      ----  ----  ----
                                                                                                      ----  ----  ----
</TABLE>

 

PROCEEDS FROM SALES OF FIXED INCOME SECURITIES

 

    The proceeds from sales of investments in fixed income securities, excluding
calls, were $7,836 and $3,015, with related gross realized gains of $459 and $22
for 1995 and 1993, respectively. There were no such amounts realized in 1994.

 

SECURITIES ON DEPOSIT

 

    At December  31, 1995,  fixed income  securities with  a carrying  value  of
$10,085 were on deposit with regulatory authorities as required by law.

 

7.  FINANCIAL INSTRUMENTS


    In  the normal course of business,  the Company invests in various financial
assets and incurs various financial liabilities. The fair value of all financial
assets other  than  fixed  income  securities and  all  liabilities  other  than
contractholder funds approximates their carrying value as they are short-term in
nature.

 

    Fair  values for fixed income securities  are based on quoted market prices.
The December 31, 1995 and 1994 fair  values and carrying values of fixed  income
securities are discussed in Note 6.

 

    The  fair value of contractholder funds  on investment contracts is based on
the terms of the underlying contracts. Reserves on investment contracts with  no
stated  maturities (single premium and  flexible premium deferred annuities) are
valued at the fund  balance less surrender charge.  The fair value of  immediate
annuities with fixed terms are estimated using discounted cash flow calculations
based on

 
                                      18
<PAGE>

                       GLENBROOK LIFE AND ANNUITY COMPANY
                   NOTES TO FINANCIAL STATEMENTS (CONTINUED)
                                ($ IN THOUSANDS)

 

7.  FINANCIAL INSTRUMENTS (CONTINUED)


interest  rates currently offered for contracts with similar terms and duration.
Contractholder funds on investment contracts had a carrying value of  $1,340,925
at December 31, 1995 and a fair value of $1,282,248. The carrying value and fair
value at December 31, 1994 were $696,854 and $670,930, respectively.

 

8.  STATUTORY FINANCIAL INFORMATION


    The  following  tables  reconcile  net income  and  shareholder's  equity as
reported herein in conformity with generally accepted accounting principles with
statutory net  income and  capital and  surplus, determined  in accordance  with
statutory  accounting practices prescribed or  permitted by insurance regulatory
authorities:

 

<TABLE>
<CAPTION>
                                                                                                       NET INCOME
                                                                                                       YEAR ENDED
                                                                                                      DECEMBER 31,
                                                                                             -------------------------------
                                                                                               1995       1994       1993
                                                                                             ---------  ---------  ---------
<S>                                                                                          <C>        <C>        <C>
Balance per generally accepted accounting principles.......................................  $   2,879  $   1,294  $     529
  Income taxes.............................................................................       (164)        29          8
  Interest maintenance reserve.............................................................                   (53)        27
  Non-admitted assets and statutory reserves...............................................        (46)        15        (47)
                                                                                             ---------  ---------        ---
Balance per statutory accounting practices.................................................  $   2,669  $   1,285  $     517
                                                                                             ---------  ---------        ---
                                                                                             ---------  ---------        ---
</TABLE>

 

<TABLE>
<CAPTION>
                                                                                   SHAREHOLDER'S
                                                                                       EQUITY
                                                                                    DECEMBER 31,
                                                                                  ----------------
                                                                                   1995     1994
                                                                                  -------  -------
<S>                                                                               <C>      <C>
Balance per generally accepted accounting principles............................  $60,012  $52,658
  Income taxes..................................................................      698     (575)
  Unrealized net capital gains (losses).........................................   (4,703)   1,719
  Non-admitted assets and statutory reserves....................................   (1,702)  (1,635)
                                                                                  -------  -------
Balance per statutory accounting practices......................................  $54,305  $52,167
                                                                                  -------  -------
                                                                                  -------  -------
</TABLE>

 

PERMITTED STATUTORY ACCOUNTING PRACTICES

 

    The Company prepares their statutory financial statements in accordance with
accounting principles and  practices prescribed  or permitted  by the  insurance
department  of the State of  Illinois. Prescribed statutory accounting practices
include a  variety of  publications  of the  National Association  of  Insurance
Commissioners,  as well as  state laws, regulations,  and general administrative
rules.  Permitted  statutory  accounting  practices  encompass  all   accounting
practices not so prescribed. The Company does not follow any permitted statutory
accounting  practices  that  have  a material  effect  on  statutory  surplus or
risk-based capital.

 

DIVIDENDS

 

    The ability  of  the Company  to  pay  dividends is  dependent  on  business
conditions, income, cash requirements of the Company and other relevant factors.
The  payment of shareholder  dividends by insurance  companies without the prior
approval of the state insurance regulator is limited to formula amounts based on
net income  and capital  and surplus,  determined in  accordance with  statutory
accounting  practices, as well as the timing and amount of dividends paid in the
preceding twelve months. The  maximum amount of dividends  that the Company  can
distribute  during  1996  without  prior  approval  of  both  the  Illinois  and
California Departments of Insurance is $5,220.

 
                                      19
<PAGE>

                       GLENBROOK LIFE AND ANNUITY COMPANY
                            SCHEDULE IV--REINSURANCE
                                ($ IN THOUSANDS)


<TABLE>
<CAPTION>
                                                                                                 GROSS
                                                                                                AMOUNT       CEDED    NET AMOUNT
                                                                                              -----------  ---------  -----------
<S>                                                                                           <C>          <C>        <C>
YEAR ENDED DECEMBER 31, 1995
Life insurance in force.....................................................................   $   1,250   $   1,250   $  --
                                                                                                   -----   ---------       -----
                                                                                                   -----   ---------       -----
Premiums and contract charges:
  Life and annuities........................................................................   $   6,571   $   6,571   $  --
                                                                                                   -----   ---------       -----
                                                                                                   -----   ---------       -----
 
<CAPTION>
 
                                                                                                 GROSS
                                                                                                AMOUNT       CEDED    NET AMOUNT
                                                                                              -----------  ---------  -----------
<S>                                                                                           <C>          <C>        <C>
YEAR ENDED DECEMBER 31, 1994
Life insurance in force.....................................................................   $   1,250   $   1,250   $  --
                                                                                                   -----   ---------       -----
                                                                                                   -----   ---------       -----
Premiums and contract charges:
  Life and annuities........................................................................   $     409   $     409   $  --
                                                                                                   -----   ---------       -----
                                                                                                   -----   ---------       -----
<CAPTION>
 
                                                                                                 GROSS
                                                                                                AMOUNT       CEDED    NET AMOUNT
                                                                                              -----------  ---------  -----------
<S>                                                                                           <C>          <C>        <C>
YEAR ENDED DECEMBER 31, 1993
Life insurance in force.....................................................................   $   1,250   $   1,250   $  --
                                                                                                   -----   ---------       -----
                                                                                                   -----   ---------       -----
Premiums and contract charges:
  Life......................................................................................           6           6      --
  Contract charges..........................................................................          70          70      --
                                                                                                   -----   ---------       -----
                                                                                               $      76   $      76   $  --
                                                                                                   -----   ---------       -----
                                                                                                   -----   ---------       -----
</TABLE>

 
                                      20

<PAGE>


                                    PART IV

ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

     (a)  The following documents are filed as part of this Report.  The page 
number, if any, listed opposite a document indicates the page number in the 
sequential numbering system in the manually signed original of this Report 
where such document can be found.

          (1)  The financial statements filed as part of this Report are 
               listed in Item 8.

          (2)  Financial Statement Schedules

               Schedule IV - Reinsurance                     page 20

          (3)  Exhibits

               None


                                       21


<PAGE>

                                    SIGNATURES

     Pursuant to the requirements of Section 13 or 15(d) of the Securities 
Exchange Act of 1934, the Registrant has duly caused this report to be signed 
on its behalf by the undersigned, thereunto duly authorized.

                                            GLENBROOK LIFE AND ANNUITY COMPANY


                                                    By /s/   Louis G. Lower, II
                                                             Louis G. Lower, II
                                           Chief Executive Officer and Chairman
                                                   (Principal Executive Officer)


                                                   Date  March 29, 1996


     Pursuant to the Requirements of the Securities Exchange Act of 1934, 
this report has been signed below by the following persons on behalf of the 
Registrant and in the capacities and on the dates indicated.

                                                    By /s/   Louis G. Lower, II
                                                             Louis G. Lower, II
                                           Chief Executive Officer and Chairman
                                                   (Principal Executive Officer)


                                                   Date  March 29, 1996


                                                    By /s/        Barry S. Paul
                                                                  Barry S. Paul
                                        Assistant Vice President and Controller
                                                      (Chief Accounting Officer)


                                                   Date   March 29, 1996

                                      22