Report of Independent Registered Public Accounting Firm

 

 

 

The Board of Directors and Contract Owners of EquiTrust Life Annuity Account II

EquiTrust Life Insurance Company

 

Opinion on the Financial Statements

 

We have audited the accompanying statements of assets and liabilities of each of the subaccounts listed in the Appendix that comprise EquiTrust Life Annuity Account II (the Separate Account), as of December 31, 2023, and the related statements of operations for the year then ended, and the statements of changes in net assets for the two years in the period then ended, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of each subaccount as of December 31, 2023, the results of its operations for the year then ended and changes in its net assets for each of the two years then ended, in conformity with U.S. generally accepted accounting principles.

 

Basis for Opinion

 

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

 

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of December 31, 2023, by correspondence with the fund companies or their transfer agents, as applicable. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

 

/s/ Ernst & Young LLP

 

We have served as the Separate Account’s auditor since 1998.

 

Des Moines, Iowa

April 24, 2024

1

 

 

 

Appendix:

Subaccounts comprising EquiTrust Life Annuity Account II

 

Subaccounts  

American Century VP Capital Appreciation Fund

American Century VP Ultra® Fund

American Century VP Value Fund

BNY Mellon Sustainable U.S. Equity Portfolio – Service Shares

BNY Mellon VIF Appreciation Portfolio – Initial Shares

BNY Mellon VIF Growth & Income Portfolio – Initial Shares

BNY Mellon VIF Opportunistic Small Cap Portfolio – Initial Shares

Calvert VP NASDAQ-100 Index Portfolio

Calvert VP Russell 2000® Small Cap Index Portfolio

Calvert VP S&P MidCap 400 Index Portfolio

Federated Hermes Government Money Fund II - Service Shares

Federated Hermes Managed Volatility Fund II - Primary Shares

Federated Hermes Quality Bond Fund II - Primary Shares

Fidelity® VIP Contrafund® Portfolio - Initial Class

Fidelity® VIP Growth & Income Portfolio - Initial Class

Fidelity® VIP Growth Portfolio - Initial Class

Fidelity® VIP High Income Portfolio - Service Class 2

Fidelity® VIP Index 500 Portfolio - Initial Class

Fidelity® VIP Mid Cap Portfolio - Service Class 2

Fidelity® VIP Overseas Portfolio - Initial Class

 

Franklin Global Real Estate VIP Fund - Class 2

Franklin Mutual Shares VIP Fund - Class 2

Franklin Small Cap Value VIP Fund - Class 2

Franklin Small-Mid Cap Growth VIP Fund - Class 2

Franklin U.S. Government Securities VIP Fund - Class 2

Templeton Growth VIP Fund - Class 2

LVIP JPMorgan Mid Cap Value Fund - Standard

LVIP JPMorgan Small Cap Core Fund - Standard

T. Rowe Price All-Cap Opportunities Portfolio

T. Rowe Price Equity Income Portfolio

T. Rowe Price Mid-Cap Growth Portfolio

T. Rowe Price Moderate Allocation Portfolio

T. Rowe Price International Stock Portfolio

2

 

EquiTrust Life Annuity Account II
Statements of Assets and Liabilities
December 31, 2023

 

       Net assets   Investments in mutual funds         
Subaccount  Investments in
shares of
mutual funds,
at fair value		   Accumulation
Units		   Contracts in
annuitization
period		   Total net
assets		   Cost   Shares owned   Accumulation
units outstanding		   Annuitized
units
outstanding		 
American Century VP Capital Appreciation Fund  $116,132   $116,132   $-       $116,132   $109,238    8,166.82    2,722.71    -     
American Century VP Ultra® Fund   277,418    277,418    -        277,418    216,629    10,815.51    5,083.78    -     
American Century VP Value Fund   43,927    21,863    22,064    43,927    36,993    3,603.53    850.65    858.50 
BNY Mellon Sustainable U.S. Equity Portfolio - Service Shares   14,196    14,196    -        14,196    12,217    322.12    424.22    -     
BNY Mellon VIF Appreciation Portfolio - Initial Shares   2,424,037    2,420,562    3,475    2,424,037    2,551,416    69,218.66    59,224.50    85.01 
BNY Mellon VIF Growth & Income Portfolio - Initial Shares   1,053,774    1,053,774    -        1,053,774    956,658    32,604.39    24,409.74    -     
BNY Mellon VIF Opportunistic Small Cap Portfolio - Initial Shares   797,541    797,541    -        797,541    858,314    19,020.78    24,668.93    -     
Calvert VP NASDAQ-100 Index Portfolio   157,247    152,570    4,677    157,247    67,198    1,098.33    1,893.69    58.06 
Calvert VP Russell 2000® Small Cap Index Portfolio   289,480    286,809    2,671    289,480    275,418    3,629.39    7,230.23    67.34 
Calvert VP S&P MidCap 400 Index Portfolio   269,124    263,049    6,075    269,124    244,470    2,250.20    5,002.29    115.53 
Federated Hermes Government Money Fund II - Service Shares   480,261    480,261    -        480,261    480,261    480,260.97    52,217.76    -     
Federated Hermes Managed Volatility Fund II - Primary Shares   1,185,539    1,170,699    14,840    1,185,539    1,339,738    131,434.48    66,775.65    846.42 
Federated Hermes Quality Bond Fund II - Primary Shares   711,985    648,063    63,922    711,985    764,490    70,215.53    56,422.36    5,565.21 
Fidelity® VIP Contrafund® Portfolio - Initial Class   1,737,226    1,702,167    35,059    1,737,226    1,301,591    35,723.35    26,490.29    545.60 
Fidelity® VIP Growth & Income Portfolio - Initial Class   421,296    421,296    -        421,296    302,654    15,580.48    10,608.50    -     
Fidelity® VIP Growth Portfolio - Initial Class   344,211    344,211    -        344,211    293,577    3,697.22    6,413.53    -     
Fidelity® VIP High Income Portfolio - Service Class 2   55,173    55,173    -        55,173    62,978    12,596.50    2,128.24    -     
Fidelity® VIP Index 500 Portfolio - Initial Class   1,165,922    1,151,583    14,339    1,165,922    562,794    2,524.79    24,883.47    309.83 
Fidelity® VIP Mid Cap Portfolio - Service Class 2   660,922    660,922    -        660,922    624,521    19,052.23    11,289.95    -     
Fidelity® VIP Overseas Portfolio - Initial Class   104,464    104,464    -        104,464    92,183    4,045.86    3,782.31    -     
Franklin Global Real Estate VIP Fund - Class 2   24,271    24,271    -        24,271    28,462    1,933.94    1,341.92    -     
Franklin Mutual Shares VIP Fund - Class 2   188,456    171,060    17,396    188,456    208,657    12,293.30    6,288.84    639.54 
Franklin Small Cap Value VIP Fund - Class 2   382,536    382,536    -        382,536    410,341    28,827.16    7,734.34    -     
Franklin Small-Mid Cap Growth VIP Fund - Class 2   236,586    236,586    -        236,586    259,633    17,761.74    6,206.46    -     
Franklin U.S. Government Securities VIP Fund - Class 2   132,999    132,999    -        132,999    152,302    12,837.73    10,505.31    -     
Templeton Growth VIP Fund - Class 2   62,390    62,390    -        62,390    51,164    5,203.51    3,070.85    -     
LVIP JPMorgan Mid Cap Value Fund - Standard   804,904    804,904    -        804,904    815,837    79,121.56    13,731.36    -     
LVIP JPMorgan Small Cap Core Fund - Standard   77,898    77,898    -        77,898    77,610    3,924.51    1,923.90    -     
T. Rowe Price All-Cap Opportunities Portfolio   1,335,215    1,335,215    -        1,335,215    1,237,751    38,814.39    22,351.49    -     
T. Rowe Price Equity Income Portfolio   1,055,642    1,053,712    1,930    1,055,642    1,019,200    38,027.45    25,871.94    47.38 
T. Rowe Price Mid-Cap Growth Portfolio   2,193,076    2,189,110    3,966    2,193,076    2,126,508    75,337.56    25,857.77    46.84 
T. Rowe Price Moderate Allocation Portfolio   1,143,250    1,143,250    -        1,143,250    1,157,581    57,105.41    34,614.35    -     
T. Rowe Price International Stock Portfolio   256,139    256,139    -        256,139    258,256    17,064.55    13,405.94    -     

 

See accompanying notes, including note 6 which includes per unit information.

3

 

EquiTrust Life Annuity Account II
Statements of Operations
Year Ended December 31, 2023

 

   Income   Expenses       Realized gain (loss) on
investments		             
Subaccount  Dividends   Mortality and
expense risk		   Net
investment
income (loss)		   Realized gain
(loss) on sale
of fund shares		   Realized gain
distributions		   Net realized
gain (loss) on
investments		   Change in
unrealized
appreciation/
depreciation of
investments		   Net increase in
net assets from
operations		 
American Century VP Capital Appreciation Fund  $-       $(1,814)  $(1,814)  $(3,571)  $213   $(3,358)  $28,557   $23,385 
American Century VP Ultra® Fund   -        (3,329)   (3,329)   713    16,589    17,302    67,566    81,539 
American Century VP Value Fund   1,011    (590)   421    269    3,379    3,648    (900)   3,169 
BNY Mellon Sustainable U.S. Equity Portfolio - Service Shares   67    (176)   (109)   41    1,503    1,544    1,096    2,531 
BNY Mellon VIF Appreciation Portfolio - Initial Shares   16,754    (32,623)   (15,869)   (98,435)   202,365    103,930    326,584    414,645 
BNY Mellon VIF Growth & Income Portfolio - Initial Shares   6,627    (14,216)   (7,589)   (1,329)   115,760    114,431    125,535    232,377 
BNY Mellon VIF Opportunistic Small Cap Portfolio - Initial Shares   2,639    (10,902)   (8,263)   (7,503)   17,785    10,282    57,141    59,160 
Calvert VP NASDAQ-100 Index Portfolio   466    (1,897)   (1,431)   5,266    -        5,266    51,380    55,215 
Calvert VP Russell 2000® Small Cap Index Portfolio   2,328    (3,697)   (1,369)   (3,464)   148    (3,316)   42,630    37,945 
Calvert VP S&P MidCap 400 Index Portfolio   3,083    (3,871)   (788)   13,441    10,403    23,844    17,314    40,370 
Federated Hermes Government Money Fund II - Service Shares   23,061    (7,241)   15,820    -        -        -        -        15,820 
Federated Hermes Managed Volatility Fund II - Primary Shares   22,178    (16,422)   5,756    (39,670)   -        (39,670)   114,726    80,812 
Federated Hermes Quality Bond Fund II - Primary Shares   20,922    (10,433)   10,489    (23,419)   -        (23,419)   46,306    33,376 
Fidelity® VIP Contrafund® Portfolio - Initial Class   7,711    (22,782)   (15,071)   52,332    56,565    108,897    354,516    448,342 
Fidelity® VIP Growth & Income Portfolio - Initial Class   6,601    (5,495)   1,106    17,524    14,867    32,391    29,031    62,528 
Fidelity® VIP Growth Portfolio - Initial Class   399    (4,498)   (4,099)   18,102    14,523    32,625    67,848    96,374 
Fidelity® VIP High Income Portfolio - Service Class 2   3,036    (732)   2,304    (782)   -        (782)   2,951    4,473 
Fidelity® VIP Index 500 Portfolio - Initial Class   15,588    (14,479)   1,109    30,291    9,329    39,620    188,150    228,879 
Fidelity® VIP Mid Cap Portfolio - Service Class 2   2,409    (8,585)   (6,176)   (147)   17,946    17,799    66,104    77,727 
Fidelity® VIP Overseas Portfolio - Initial Class   1,026    (1,393)   (367)   927    259    1,186    16,504    17,323 
Franklin Global Real Estate VIP Fund - Class 2   656    (316)   340    (230)   -        (230)   2,025    2,135 
Franklin Mutual Shares VIP Fund - Class 2   3,334    (2,599)   735    (4,929)   15,346    10,417    10,214    21,366 
Franklin Small Cap Value VIP Fund - Class 2   1,859    (4,945)   (3,086)   (10,125)   20,158    10,033    31,817    38,764 
Franklin Small-Mid Cap Growth VIP Fund - Class 2   -        (2,922)   (2,922)   (3,440)   -        (3,440)   54,135    47,773 
Franklin U.S. Government Securities VIP Fund - Class 2   3,678    (1,866)   1,812    (2,209)   -        (2,209)   4,327    3,930 
Templeton Growth VIP Fund - Class 2   3,018    (1,106)   1,912    (2,642)   -        (2,642)   15,361    14,631 
LVIP JPMorgan Mid Cap Value Fund - Standard   24,546    (10,784)   13,762    (8,955)   69,481    60,526    (3,532)   70,756 
LVIP JPMorgan Small Cap Core Fund - Standard   982    (979)   3    (165)   614    449    7,648    8,100 
T. Rowe Price All-Cap Opportunities Portfolio   3,060    (16,997)   (13,937)   26,301    87,938    114,239    195,423    295,725 
T. Rowe Price Equity Income Portfolio   22,605    (15,266)   7,339    (6,015)   42,956    36,941    38,320    82,600 
T. Rowe Price Mid-Cap Growth Portfolio   -        (29,844)   (29,844)   21,709    131,207    152,916    235,517    358,589 

 

See accompanying notes.

4

 

EquiTrust Life Annuity Account II
Statements of Operations (continued)
Year Ended December 31, 2023

 

   Income   Expenses       Realized gain (loss) on
investments		             
Subaccount  Dividends   Mortality and
expense risk		   Net
investment
income (loss)		   Realized gain
(loss) on sale
of fund shares		   Realized gain
distributions		   Net realized
gain (loss) on
investments		   Change in
unrealized
appreciation/
depreciation of
investments		   Net increase in
net assets from
operations		 
T. Rowe Price Moderate Allocation Portfolio  $25,708   $(15,505)  $10,203   $(14,010)  $3,099   $(10,911)  $147,083   $146,375 
T. Rowe Price International Stock Portfolio   2,432    (3,380)   (948)   (1,136)   -        (1,136)   35,523    33,439 

 

See accompanying notes.

5

 

EquiTrust Life Annuity Account II
Statements of Changes in Net Assets
For the Year Ended December 31, 2023

 

       Operations       Contract transactions             
Subaccount  Net Assets at
December 31,
2022		   Net
investment
income
(loss)		   Net realized
gain (loss)
on
investments		   Change in
unrealized
appreciation/
depreciation
of
investments		   Net increase
in net assets
from
operations		   Transfers
of net
premiums		   Transfers of
surrenders
and death
benefits		   Transfers of
administrative
and other
charges		   Transfers
between
subaccounts,
including
Declared
Interest
Option
account		   Net increase
(decrease) in
net assets
from
contract
transactions		   Total
increase
(decrease) in
net assets		   Net Assets at
December 31,
2023		 
American Century VP Capital Appreciation Fund  $136,308   $(1,814)  $(3,358)  $28,557   $23,385   $300   $(34,530)  $(114)  $(9,217)  $(43,561)  $(20,176)  $116,132 
American Century VP Ultra® Fund   196,434    (3,329)   17,302    67,566    81,539    1,100    (300)   (138)   (1,217)   (555)   80,984    277,418 
American Century VP Value Fund   43,584    421    3,648    (900)   3,169    54    (3,248)   226    142    (2,826)   343    43,927 
BNY Mellon Sustainable U.S. Equity Portfolio - Service Shares   11,352    (109)   1,544    1,096    2,531    -        -        (22)   335    313    2,844    14,196 
BNY Mellon VIF Appreciation Portfolio - Initial Shares   2,217,530    (15,869)   103,930    326,584    414,645    6,438    (193,280)   (2,294)   (19,002)   (208,138)   206,507    2,424,037 
BNY Mellon VIF Growth & Income Portfolio - Initial Shares   971,267    (7,589)   114,431    125,535    232,377    5,310    (145,523)   (907)   (8,750)   (149,870)   82,507    1,053,774 
BNY Mellon VIF Opportunistic Small Cap Portfolio - Initial Shares   790,312    (8,263)   10,282    57,141    59,160    3,424    (46,402)   (1,286)   (7,667)   (51,931)   7,229    797,541 
Calvert VP NASDAQ-100 Index Portfolio   107,152    (1,431)   5,266    51,380    55,215    -        (5,334)   (26)   240    (5,120)   50,095    157,247 
Calvert VP Russell 2000® Small Cap Index Portfolio   265,395    (1,369)   (3,316)   42,630    37,945    1,315    (9,156)   (140)   (5,879)   (13,860)   24,085    289,480 
Calvert VP S&P MidCap 400 Index Portfolio   286,784    (788)   23,844    17,314    40,370    1,085    (64,989)   (131)   6,005    (58,030)   (17,660)   269,124 
Federated Hermes Government Money Fund II - Service Shares   530,899    15,820    -        -        15,820    4,651    (66,828)   (766)   (3,515)   (66,458)   (50,638)   480,261 
Federated Hermes Managed Volatility Fund II - Primary Shares   1,194,248    5,756    (39,670)   114,726    80,812    6,509    (96,567)   (1,479)   2,016    (89,521)   (8,709)   1,185,539 
Federated Hermes Quality Bond Fund II - Primary Shares   798,484    10,489    (23,419)   46,306    33,376    4,570    (124,231)   (181)   (33)   (119,875)   (86,499)   711,985 
Fidelity® VIP Contrafund® Portfolio - Initial Class   1,477,250    (15,071)   108,897    354,516    448,342    8,130    (179,575)   (1,035)   (15,886)   (188,366)   259,976    1,737,226 
Fidelity® VIP Growth & Income Portfolio - Initial Class   370,258    1,106    32,391    29,031    62,528    3,357    (17,972)   (209)   3,334    (11,490)   51,038    421,296 
Fidelity® VIP Growth Portfolio - Initial Class   291,063    (4,099)   32,625    67,848    96,374    3,099    (45,845)   (280)   (200)   (43,226)   53,148    344,211 

 

See accompanying notes.

6

 

EquiTrust Life Annuity Account II
Statements of Changes in Net Assets (continued)
For the Year Ended December 31, 2023

 

       Operations       Contract transactions             
Subaccount  Net Assets at
December 31,
2022		   Net
investment
income
(loss)		   Net realized
gain (loss)
on
investments		   Change in
unrealized
appreciation/
depreciation
of
investments		   Net increase
in net assets
from
operations		   Transfers
of net
premiums		   Transfers of
surrenders
and death
benefits		   Transfers of
administrative
and other
charges		   Transfers
between
subaccounts,
including
Declared
Interest
Option
account		   Net increase
(decrease) in
net assets
from
contract
transactions		   Total
increase
(decrease) in
net assets		   Net Assets at
December 31,
2023		 
Fidelity® VIP High Income Portfolio - Service Class 2  $51,861   $2,304   $(782)  $2,951   $4,473   $18   $(2,003)  $(93)  $917   $(1,161)  $3,312   $55,173 
Fidelity® VIP Index 500 Portfolio - Initial Class   930,072    1,109    39,620    188,150    228,879    3,981    (24,204)   (426)   27,620    6,971    235,850    1,165,922 
Fidelity® VIP Mid Cap Portfolio - Service Class 2   600,259    (6,176)   17,799    66,104    77,727    4,335    (20,646)   (567)   (186)   (17,064)   60,663    660,922 
Fidelity® VIP Overseas Portfolio - Initial Class   95,569    (367)   1,186    16,504    17,323    2,237    (8,892)   (96)   (1,677)   (8,428)   8,895    104,464 
Franklin Global Real Estate VIP Fund - Class 2   22,382    340    (230)   2,025    2,135    -        (472)   (56)   282    (246)   1,889    24,271 
Franklin Mutual Shares VIP Fund - Class 2   189,969    735    10,417    10,214    21,366    120    (21,382)   98    (1,715)   (22,879)   (1,513)   188,456 
Franklin Small Cap Value VIP Fund - Class 2   353,650    (3,086)   10,033    31,817    38,764    4,240    (14,019)   (314)   215    (9,878)   28,886    382,536 
Franklin Small-Mid Cap Growth VIP Fund - Class 2   192,513    (2,922)   (3,440)   54,135    47,773    324    (1,062)   (156)   (2,806)   (3,700)   44,073    236,586 
Franklin U.S. Government Securities VIP Fund - Class 2   139,047    1,812    (2,209)   4,327    3,930    1,093    (8,241)   (250)   (2,580)   (9,978)   (6,048)   132,999 
Templeton Growth VIP Fund - Class 2   88,438    1,912    (2,642)   15,361    14,631    180    (36,752)   (67)   (4,040)   (40,679)   (26,048)   62,390 
LVIP JPMorgan Mid Cap Value Fund - Standard   790,894    13,762    60,526    (3,532)   70,756    9,088    (49,848)   (412)   (15,574)   (56,746)   14,010    804,904 
LVIP JPMorgan Small Cap Core Fund - Standard   68,060    3    449    7,648    8,100    -        -        (70)   1,808    1,738    9,838    77,898 
T. Rowe Price All-Cap Opportunities Portfolio   1,109,735    (13,937)   114,239    195,423    295,725    9,434    (74,396)   (1,123)   (4,160)   (70,245)   225,480    1,335,215 
T. Rowe Price Equity Income Portfolio   1,147,512    7,339    36,941    38,320    82,600    7,846    (176,736)   (1,040)   (4,540)   (174,470)   (91,870)   1,055,642 
T. Rowe Price Mid-Cap Growth Portfolio   2,051,495    (29,844)   152,916    235,517    358,589    15,943    (223,911)   (2,276)   (6,764)   (217,008)   141,581    2,193,076 
T. Rowe Price Moderate Allocation Portfolio   1,098,971    10,203    (10,911)   147,083    146,375    4,998    (113,165)   (1,408)   7,479    (102,096)   44,279    1,143,250 

 

See accompanying notes.

7

 

EquiTrust Life Annuity Account II
Statements of Changes in Net Assets (continued)
For the Year Ended December 31, 2023

 

       Operations       Contract transactions             
Subaccount  Net Assets at
December 31,
2022		   Net
investment
income
(loss)		   Net realized
gain (loss)
on
investments		   Change in
unrealized
appreciation/
depreciation
of
investments		   Net increase
in net assets
from
operations		   Transfers
of net
premiums		   Transfers of
surrenders
and death
benefits		   Transfers of
administrative
and other
charges		   Transfers
between
subaccounts,
including
Declared
Interest
Option
account		   Net increase
(decrease) in
net assets
from
contract
transactions		   Total
increase
(decrease) in
net assets		   Net Assets at
December 31,
2023		 
T. Rowe Price International Stock Portfolio  $231,533   $(948)  $(1,136)  $35,523   $33,439   $1,445   $(6,014)  $(288)  $(3,976)  $(8,833)  $24,606   $256,139 

 

See accompanying notes.

8

 

EquiTrust Life Annuity Account II
Statements of Changes in Net Assets
For the Year Ended December 31, 2022

 

       Operations       Contract transactions             
Subaccount  Net Assets at
December 31,
2021		   Net
investment
income
(loss)		   Net realized
gain (loss)
on
investments		   Change in
unrealized
appreciation/
depreciation
of
investments		   Net decrease
in net assets
from
operations		   Transfers
of net
premiums		   Transfers of
surrenders
and death
benefits		   Transfers of
administrative
and other
charges		   Transfers
between
subaccounts,
including
Declared
Interest
Option
account		   Net increase
(decrease) in
net assets
from
contract
transactions		   Total
decrease in
net assets		   Net Assets at
December 31,
2022		 
American Century VP Capital Appreciation Fund  $240,566   $(2,211)  $18,342   $(85,041)  $(68,910)  $611   $(16,786)  $(119)  $(19,054)  $(35,348)  $(104,258)  $136,308 
American Century VP Ultra® Fund   497,912    (4,959)   82,470    (227,665)   (150,154)   905    (153,372)   (140)   1,283    (151,324)   (301,478)   196,434 
American Century VP Value Fund   50,658    304    5,024    (5,785)   (457)   76    (4,267)   207    (2,633)   (6,617)   (7,074)   43,584 
BNY Mellon Sustainable U.S. Equity Portfolio - Service Shares   54,478    (329)   11,605    (20,006)   (8,730)   -        (34,023)   (22)   (351)   (34,396)   (43,126)   11,352 
BNY Mellon VIF Appreciation Portfolio - Initial Shares   2,867,054    (16,845)   668,979    (1,198,415)   (546,281)   4,037    (88,660)   (2,354)   (16,266)   (103,243)   (649,524)   2,217,530 
BNY Mellon VIF Growth & Income Portfolio - Initial Shares   1,196,620    (6,073)   216,996    (400,411)   (189,488)   3,883    (16,780)   (883)   (22,085)   (35,865)   (225,353)   971,267 
BNY Mellon VIF Opportunistic Small Cap Portfolio - Initial Shares   1,227,060    (13,390)   292,591    (486,228)   (207,027)   3,497    (174,605)   (1,403)   (57,210)   (229,721)   (436,748)   790,312 
Calvert VP NASDAQ-100 Index Portfolio   180,313    (1,613)   19,297    (75,308)   (57,624)   -        (15,742)   (35)   240    (15,537)   (73,161)   107,152 
Calvert VP Russell 2000® Small Cap Index Portfolio   348,897    (1,651)   29,564    (102,605)   (74,692)   749    (13,193)   (163)   3,797    (8,810)   (83,502)   265,395 
Calvert VP S&P MidCap 400 Index Portfolio   470,151    (1,724)   62,136    (125,723)   (65,311)   1,448    (117,420)   (135)   (1,949)   (118,056)   (183,367)   286,784 
Federated Hermes Government Money Fund II - Service Shares   576,511    (1,420)   -        -        (1,420)   5,273    (38,285)   (785)   (10,395)   (44,192)   (45,612)   530,899 
Federated Hermes Managed Volatility Fund II - Primary Shares   1,677,239    7,507    258,194    (507,268)   (241,567)   8,023    (197,319)   (1,665)   (50,463)   (241,424)   (482,991)   1,194,248 
Federated Hermes Quality Bond Fund II - Primary Shares   1,006,670    11,073    (4,860)   (111,692)   (105,479)   3,523    (98,532)   (319)   (7,379)   (102,707)   (208,186)   798,484 
Fidelity® VIP Contrafund® Portfolio - Initial Class   2,256,649    (14,954)   124,092    (706,274)   (597,136)   6,459    (160,606)   (1,122)   (26,994)   (182,263)   (779,399)   1,477,250 
Fidelity® VIP Growth & Income Portfolio - Initial Class   400,904    1,039    16,405    (42,351)   (24,907)   3,750    (4,429)   (225)   (4,835)   (5,739)   (30,646)   370,258 
Fidelity® VIP Growth Portfolio - Initial Class   396,272    (2,513)   27,796    (126,363)   (101,080)   3,456    (3,797)   (285)   (3,503)   (4,129)   (105,209)   291,063 

 

See accompanying notes.

9

 

EquiTrust Life Annuity Account II
Statements of Changes in Net Assets (continued)
For the Year Ended December 31, 2022

 

       Operations       Contract transactions             
Subaccount  Net Assets at
December 31,
2021		   Net
investment
income
(loss)		   Net realized
gain (loss)
on
investments		   Change in
unrealized
appreciation/
depreciation
of
investments		   Net decrease
in net assets
from
operations		   Transfers
of net
premiums		   Transfers of
surrenders
and death
benefits		   Transfers of
administrative
and other
charges		   Transfers
between
subaccounts,
including
Declared
Interest
Option
account		   Net increase
(decrease) in
net assets
from
contract
transactions		   Total
decrease in
net assets		   Net Assets at
December 31,
2022		 
Fidelity® VIP High Income Portfolio - Service Class 2  $61,116   $2,038   $(474)  $(9,397)  $(7,833)  $25   $(783)  $(95)  $(569)  $(1,422)  $(9,255)  $51,861 
Fidelity® VIP Index 500 Portfolio - Initial Class   1,304,607    (171)   106,679    (353,386)   (246,878)   5,308    (129,316)   (413)   (3,236)   (127,657)   (374,535)   930,072 
Fidelity® VIP Mid Cap Portfolio - Service Class 2   805,818    (7,424)   38,453    (161,842)   (130,813)   5,441    (26,658)   (617)   (52,912)   (74,746)   (205,559)   600,259 
Fidelity® VIP Overseas Portfolio - Initial Class   126,866    (302)   875    (33,272)   (32,699)   3,115    (5,067)   (97)   3,451    1,402    (31,297)   95,569 
Franklin Global Real Estate VIP Fund - Class 2   31,528    251    2,052    (10,571)   (8,268)   -        (961)   (61)   144    (878)   (9,146)   22,382 
Franklin Mutual Shares VIP Fund - Class 2   220,695    879    17,437    (37,171)   (18,855)   145    (10,017)   76    (2,075)   (11,871)   (30,726)   189,969 
Franklin Small Cap Value VIP Fund - Class 2   423,448    (1,468)   56,012    (102,290)   (47,746)   3,192    (13,466)   (331)   (11,447)   (22,052)   (69,798)   353,650 
Franklin Small-Mid Cap Growth VIP Fund - Class 2   396,986    (3,886)   31,000    (161,496)   (134,382)   135    (80,048)   (168)   9,990    (70,091)   (204,473)   192,513 
Franklin U.S. Government Securities VIP Fund - Class 2   165,770    1,478    (1,595)   (17,733)   (17,850)   1,059    (10,937)   (270)   1,275    (8,873)   (26,723)   139,047 
Templeton Growth VIP Fund - Class 2   152,115    (1,370)   (14,238)   (2,070)   (17,678)   180    (44,129)   (71)   (1,979)   (45,999)   (63,677)   88,438 
LVIP JPMorgan Mid Cap Value Fund - Standard   1,023,433    (4,103)   144,667    (233,997)   (93,433)   10,083    (111,125)   (488)   (37,576)   (139,106)   (232,539)   790,894 
LVIP JPMorgan Small Cap Core Fund - Standard   96,263    (706)   17,258    (36,119)   (19,567)   -        -        (79)   (8,557)   (8,636)   (28,203)   68,060 
T. Rowe Price All-Cap Opportunities Portfolio   1,515,820    (17,156)   87,088    (412,726)   (342,794)   4,039    (77,193)   (1,222)   11,085    (63,291)   (406,085)   1,109,735 
T. Rowe Price Equity Income Portfolio   1,437,614    5,721    124,422    (193,578)   (63,435)   6,092    (211,790)   (1,135)   (19,834)   (226,667)   (290,102)   1,147,512 
T. Rowe Price Mid-Cap Growth Portfolio   3,109,668    (32,186)   57,440    (754,748)   (729,494)   13,497    (181,553)   (2,459)   (158,164)   (328,679)   (1,058,173)   2,051,495 
T. Rowe Price Moderate Allocation Portfolio   1,507,252    1,839    25,085    (313,923)   (286,999)   5,024    (124,444)   (1,524)   (338)   (121,282)   (408,281)   1,098,971 

 

See accompanying notes.

10

 

EquiTrust Life Annuity Account II
Statements of Changes in Net Assets (continued)
For the Year Ended December 31, 2022

 

       Operations       Contract transactions             
Subaccount  Net Assets at
December 31,
2021		   Net
investment
income
(loss)		   Net realized
gain (loss)
on
investments		   Change in
unrealized
appreciation/
depreciation
of
investments		   Net decrease
in net assets
from
operations		   Transfers
of net
premiums		   Transfers of
surrenders
and death
benefits		   Transfers of
administrative
and other
charges		   Transfers
between
subaccounts,
including
Declared
Interest
Option
account		   Net increase
(decrease) in
net assets
from
contract
transactions		   Total
decrease in
net assets		   Net Assets at
December 31,
2022		 
T. Rowe Price International Stock Portfolio  $306,116   $(1,531)  $2,143   $(51,614)  $(51,002)  $1,775   $(32,715)  $(275)  $7,634   $(23,581)  $(74,583)  $231,533 

 

See accompanying notes.

11

 

EquiTrust Life Annuity Account II

 

Notes to Financial Statements

 

December 31, 2023

 

1. Organization and Significant Accounting Policies

 

Organization

 

EquiTrust Life Annuity Account II (the Account), a unit investment trust registered under the Investment Company Act of 1940, as amended, was established by EquiTrust Life Insurance Company (the Company). The Account is a funding vehicle for individual variable annuity contracts issued by the Company. The Company discontinued sales of variable annuity contracts but continues to receive premiums from sales that occurred prior to this change.

 

The assets and liabilities of the Account are clearly identified and distinguished from the Company’s other assets and liabilities. The portion of the Account’s assets applicable to the variable annuity contracts is not available to satisfy liabilities arising out of any other business the Company may conduct.

 

At the direction of eligible contract owners, the Account invests in the following thirty-five investment subaccounts which, in turn, own open-end mutual fund shares of registered investment companies (the Funds). Eligible contract owners may also allocate funds to the Declared Interest Option (DIO) account. The DIO is funded by the general account of the Company and pays interest at declared rates with a guaranteed minimum. Assets and liabilities associated with funds allocated to the DIO are excluded from the Account as these are included in the Company’s general account.

 

Subaccount / Fund

    Fidelity® Variable Insurance Products Funds
American Century Variable Portfolios, Inc.   (continued)
American Century VP Capital Appreciation Fund   Fidelity® VIP Growth Portfolio - Initial Class
American Century VP Inflation Protection Bond Fund (1)   Fidelity® VIP High Income Portfolio - Service Class 2
American Century VP Mid Cap Value Fund (1)   Fidelity® VIP Index 500 Portfolio - Initial Class
American Century VP Ultra® Fund   Fidelity® VIP Mid Cap Portfolio - Service Class 2
American Century VP Value Fund   Fidelity® VIP Overseas Portfolio - Initial Class
BNY Mellon Sustainable U.S. Equity Portfolio, Inc.   Franklin Templeton Variable Insurance Products Trust
BNY Mellon Sustainable U.S. Equity Portfolio - Service Shares   Franklin Global Real Estate VIP Fund - Class 2
BNY Mellon Variable Investment Fund   Franklin Mutual Shares VIP Fund - Class 2
BNY Mellon VIF Appreciation Portfolio - Initial Shares   Franklin Small Cap Value VIP Fund - Class 2
BNY Mellon VIF Growth & Income Portfolio - Initial Shares   Franklin Small-Mid Cap Growth VIP Fund - Class 2
BNY Mellon VIF Opportunistic Small Cap Portfolio - Initial Shares   Franklin U.S. Government Securities VIP Fund - Class 2
Calvert Variable Products, Inc.   Templeton Growth VIP Fund - Class 2
Calvert VP NASDAQ-100 Index Portfolio   Lincoln Variable Insurance Products Trust (2)
Calvert VP Russell 2000® Small Cap Index Portfolio   LVIP JPMorgan Mid Cap Value Fund – Standard (2)
Calvert VP S&P MidCap 400 Index Portfolio   LVIP JPMorgan Small Cap Core Fund – Standard (2)
Federated Hermes Insurance Series   T. Rowe Price Equity Series, Inc.
Federated Hermes Government Money Fund II - Service Shares   T. Rowe Price All-Cap Opportunities Portfolio
Federated Hermes Managed Volatility Fund II - Primary Shares   T. Rowe Price Equity Income Portfolio
Federated Hermes Quality Bond Fund II - Primary Shares   T. Rowe Price Mid-Cap Growth Portfolio
Fidelity® Variable Insurance Products Funds   T. Rowe Price Moderate Allocation Portfolio
Fidelity® VIP Contrafund® Portfolio - Initial Class   T. Rowe Price International Series, Inc.
Fidelity® VIP Growth & Income Portfolio - Initial Class   T. Rowe Price International Stock Portfolio

12

 

EquiTrust Life Annuity Account II

 

Notes to Financial Statements (continued)

 

(1)Subaccount was inactive during 2023 and 2022; accordingly, a Statement of Assets and Liabilities, a Statement of Operations and a Statement of Changes in Net Assets have not been presented herein.
(2)On April 28, 2023, J.P. Morgan Insurance Trust funds were reorganized into newly formed funds of Lincoln Variable Insurance Products Trust. On that date, assets of each fund were transferred as noted below. In addition, subaccounts that had invested in the J.P. Morgan Insurance Trust funds transferred their investment into the respective newly formed fund as noted below.

 

Newly formed fund/portfolio   Former fund/portfolio
LVIP JPMorgan Mid Cap Value Fund – Standard   J.P. Morgan Ins. Trust Mid Cap Value Portfolio - Class 1
LVIP JPMorgan Small Cap Core Fund – Standard   J.P. Morgan Ins. Trust Small Cap Core Portfolio - Class 1

 

Investments

 

Investments in shares of the Funds are stated at fair value, which is the closing net asset value per share as determined by the Funds. The first-in, first-out cost basis has been used in determining the net realized gain or loss from investment transactions and unrealized appreciation or depreciation on investments. Investment transactions are accounted for on the trade date.

 

The inputs used in determining the fair value of the Account’s investments are summarized in three broad levels listed below:

Level 1 – quoted prices in active markets for identical securities 

Level 2 – other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.) 

Level 3 – significant unobservable inputs (including the Account’s own assumptions in determining the fair value of the investments)

 

At December 31, 2023, all valuation inputs used to determine the fair value of mutual fund shares owned by the Account were classified as Level 1. There were no transfers into or out of Level 3 during the year.

 

Dividends and realized capital gain distributions are taken into income on an accrual basis as of the ex-dividend date and are automatically reinvested in shares of the Funds on the payable date.

 

Contracts in Annuitization Period

 

Net assets allocated to contracts in the annuitization period are computed according to the mortality table indicated in the original contract with an assumed investment return determined at the time of annuitization. The mortality risk is fully borne by the Company and may result in additional amounts being transferred into the variable annuity account by the Company to cover greater longevity of annuitants than expected. Conversely, if amounts allocated exceed amounts required, transfers may be made to the insurance company.

 

Use of Estimates in the Preparation of Financial Statements

 

The preparation of the Account’s financial statements and accompanying notes in accordance with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported and disclosed. These estimates and assumptions could change in the future as more information becomes known, which could impact the amounts reported and disclosed in the financial statements and accompanying notes.

13

 

EquiTrust Life Annuity Account II

 

Notes to Financial Statements (continued)

 

2. Expense Charges and Related Party Transactions

 

Paid to the Company

 

The Account pays the Company certain amounts relating to the distribution and administration of the contracts funded by the Account and as reimbursement for certain mortality and other risks assumed by the Company. The following summarizes those amounts.

 

Mortality and Expense Risk Charges: The Company deducts a daily mortality and expense risk charge from the Account at an effective annual rate of 1.40% of the average daily net asset value of the Account. These charges are assessed in return for the Company’s assumption of risks associated with adverse mortality experience or excess administrative expenses in connection with contracts issued.

 

Administrative Charge: Prior to the annuity payment period, the Company will deduct an annual administrative charge of $45 to reimburse it for administrative expenses related to the contract. A portion of this charge may be deducted from funds held in the fixed interest subaccount.

 

Transfer Charge: A transfer charge of $25 may be imposed for the thirteenth and each subsequent transfer between subaccounts in any one contract year.

 

3. Federal Income Taxes

 

The operations of the Account are included in the federal income tax return of the Company, which is taxed as a life insurance company under the provisions of the Internal Revenue Code (IRC). Under the current provisions of the IRC, the Company does not expect to incur federal income taxes on the earnings of the Account to the extent the earnings are credited under the contracts. Based on this, no charge is being made currently to the Account for federal income taxes. The Company will review periodically the status of this policy. In the event of changes in the tax law, a charge may be made in future years for any federal income taxes that would be attributable to the contracts.

14

 

EquiTrust Life Annuity Account II

 

Notes to Financial Statements (continued)

 

4. Purchases and Sales of Investment Securities

 

The aggregate cost of investment securities purchased and proceeds from investment securities sold by subaccount were as follows during the year ended December 31, 2023:

 

   Cost of   Proceeds 
Subaccount  Purchases   from Sales 
         
American Century Variable Portfolios, Inc.:          
American Century VP Capital Appreciation Fund  $437   $45,599 
American Century VP Ultra® Fund   17,491    4,786 
American Century VP Value Fund   4,810    3,836 
           
BNY Mellon Sustainable U.S. Equity Portfolio, Inc.:          
BNY Mellon Sustainable U.S. Equity Portfolio - Service Shares   1,903    196 
           
BNY Mellon Variable Investment Fund:          
BNY Mellon VIF Appreciation Portfolio - Initial Shares   227,438    249,080 
BNY Mellon VIF Growth & Income Portfolio - Initial Shares   131,284    172,983 
BNY Mellon VIF Opportunistic Small Cap Portfolio - Initial Shares   25,708    68,117 
           
Calvert Variable Products, Inc.:          
Calvert VP NASDAQ-100 Index Portfolio   591    7,142 
Calvert VP Russell 2000® Small Cap Index Portfolio   6,778    21,859 
Calvert VP S&P MidCap 400 Index Portfolio   21,463    69,878 
           
Federated Hermes Insurance Series:          
Federated Hermes Government Money Fund II - Service Shares   33,772    84,410 
Federated Hermes Managed Volatility Fund II - Primary Shares   32,836    116,601 
Federated Hermes Quality Bond Fund II - Primary Shares   38,206    147,592 
           
Fidelity® Variable Insurance Products Funds:          
Fidelity® VIP Contrafund® Portfolio - Initial Class   76,741    223,613 
Fidelity® VIP Growth & Income Portfolio - Initial Class   30,194    25,711 
Fidelity® VIP Growth Portfolio - Initial Class   19,892    52,694 
Fidelity® VIP High Income Portfolio - Service Class 2   3,949    2,806 
Fidelity® VIP Index 500 Portfolio - Initial Class   62,028    44,619 
Fidelity® VIP Mid Cap Portfolio - Service Class 2   27,542    32,836 
Fidelity® VIP Overseas Portfolio - Initial Class   4,080    12,616 

15

 

EquiTrust Life Annuity Account II

 

Notes to Financial Statements (continued)

 

   Cost of   Proceeds 
Subaccount  Purchases   from Sales 
         
Franklin Templeton Variable Insurance Products Trust:          
Franklin Global Real Estate VIP Fund - Class 2  $934   $840 
Franklin Mutual Shares VIP Fund - Class 2   19,847    26,645 
Franklin Small Cap Value VIP Fund - Class 2   30,480    23,286 
Franklin Small-Mid Cap Growth VIP Fund - Class 2   1,861    8,483 
Franklin U.S. Government Securities VIP Fund - Class 2   5,375    13,541 
Templeton Growth VIP Fund - Class 2   3,073    41,840 
           
Lincoln Variable Insurance Products Trust:          
LVIP JPMorgan Mid Cap Value Fund - Standard   105,587    79,090 
LVIP JPMorgan Small Cap Core Fund - Standard   3,380    1,025 
           
T. Rowe Price Equity Series, Inc.:          
T. Rowe Price All-Cap Opportunities Portfolio   108,580    104,824 
T. Rowe Price Equity Income Portfolio   75,175    199,350 
T. Rowe Price Mid-Cap Growth Portfolio   147,209    262,854 
T. Rowe Price Moderate Allocation Portfolio   55,744    144,538 
           
T. Rowe Price International Series, Inc.:          
T. Rowe Price International Stock Portfolio   7,880    17,661 

16

 

EquiTrust Life Annuity Account II

 

Notes to Financial Statements (continued)

 

5. Summary of Changes from Unit Transactions

 

Transactions in units of each subaccount were as follows for the periods ended December 31, 2023 and 2022:

 

       Period Ended December 31,     
   2023   2022 
           Net           Net 
           Increase           Increase 
Subaccount  Purchased     Redeemed   (Decrease)   Purchased     Redeemed   (Decrease) 
                         
American Century Variable Portfolios, Inc.:                              
American Century VP Capital Appreciation Fund   8    1,089    (1,081)   93    1,049    (956)
American Century VP Ultra® Fund   23    34    (11)   50    3,568    (3,518)
American Century VP Value Fund   19    135    (116)   14    292    (278)
                               
BNY Mellon Sustainable U.S. Equity Portfolio, Inc.:                              
BNY Mellon Sustainable U.S. Equity Portfolio - Service Shares   13    2    11    -        1,092    (1,092)
                               
BNY Mellon Variable Investment Fund:                              
BNY Mellon VIF Appreciation Portfolio - Initial Shares   251    5,672    (5,421)   162    3,057    (2,895)
BNY Mellon VIF Growth & Income Portfolio - Initial Shares   249    3,949    (3,700)   126    1,110    (984)
BNY Mellon VIF Opportunistic Small Cap Portfolio - Initial Shares   216    1,894    (1,678)   90    7,380    (7,290)
                               
Calvert Variable Products, Inc.:                              
Calvert VP NASDAQ-100 Index Portfolio   5    78    (73)   4    243    (239)
Calvert VP Russell 2000® Small Cap Index Portfolio   128    524    (396)   130    364    (234)
Calvert VP S&P MidCap 400 Index Portfolio   178    1,306    (1,128)   23    2,528    (2,505)
                               
Federated Hermes Insurance Series:                              
Federated Hermes Government Money Fund II - Service Shares   1,300    8,584    (7,284)   529    5,489    (4,960)
Federated Hermes Managed Volatility Fund II - Primary Shares   786    6,178    (5,392)   367    14,572    (14,205)
Federated Hermes Quality Bond Fund II - Primary Shares   1,674    12,454    (10,780)   582    9,898    (9,316)
                               
Fidelity® Variable Insurance Products Funds:                              
Fidelity® VIP Contrafund® Portfolio - Initial Class   286    3,508    (3,222)   290    3,622    (3,332)
Fidelity® VIP Growth & Income Portfolio - Initial Class   260    567    (307)   115    279    (164)
Fidelity® VIP Growth Portfolio - Initial Class   130    1,003    (873)   82    186    (104)
Fidelity® VIP High Income Portfolio - Service Class 2   38    85    (47)   2    60    (58)
Fidelity® VIP Index 500 Portfolio - Initial Class   934    753    181    163    3,450    (3,287)
Fidelity® VIP Mid Cap Portfolio - Service Class 2   146    465    (319)   110    1,571    (1,461)
Fidelity® VIP Overseas Portfolio - Initial Class   116    446    (330)   264    218    46 

17

 

EquiTrust Life Annuity Account II

 

Notes to Financial Statements (continued)

 

       Period Ended December 31,     
   2023   2022 
           Net           Net 
           Increase           Increase 
Subaccount  Purchased   Redeemed   (Decrease)   Purchased   Redeemed   (Decrease) 
                         
Franklin Templeton Variable Insurance Products Trust:                        
Franklin Global Real Estate VIP Fund - Class 2   17    35    (18)   16    53    (37)
Franklin Mutual Shares VIP Fund - Class 2   55    942    (887)   15    489    (474)
Franklin Small Cap Value VIP Fund - Class 2   197    414    (217)   92    585    (493)
Franklin Small-Mid Cap Growth VIP Fund - Class 2   59    165    (106)   307    2,507    (2,200)
Franklin U.S. Government Securities VIP Fund - Class 2   143    954    (811)   174    865    (691)
Templeton Growth VIP Fund - Class 2   4    2,128    (2,124)   37    2,641    (2,604)
                               
Lincoln Variable Insurance Products Trust:                              
LVIP JPMorgan Mid Cap Value Fund - Standard   227    1,255    (1,028)   182    2,722    (2,540)
LVIP JPMorgan Small Cap Core Fund - Standard   51    2    49    58    292    (234)
                               
T. Rowe Price Equity Series, Inc.:                              
T. Rowe Price All-Cap Opportunities Portfolio   380    1,657    (1,277)   597    1,952    (1,355)
T. Rowe Price Equity Income Portfolio   307    4,826    (4,519)   137    6,050    (5,913)
T. Rowe Price Mid-Cap Growth Portfolio   269    3,033    (2,764)   251    4,762    (4,511)
T. Rowe Price Moderate Allocation Portfolio   941    4,179    (3,238)   346    4,316    (3,970)
                               
T. Rowe Price International Series, Inc.:                              
T. Rowe Price International Stock Portfolio   321    807    (486)   514    1,871    (1,357)

18

 

EquiTrust Life Annuity Account II

 

Notes to Financial Statements (continued)

 

6. Unit Values

 

The following summarizes units outstanding, unit values, and net assets at December 31, 2023, 2022, 2021, 2020 and 2019, and investment income ratios, expense ratios, and total return ratios for the periods then ended:

 

    As of December 31   Investment         
        Unit       Income   Expense   Total 
Subaccount   Units   Value (A)   Net Assets   Ratio (B)   Ratio (C)   Return (D) 
                          
American Century VP Capital Appreciation Fund:
2023    2,723   $42.65   $ 116,132    -    %   1.40%   19.03%
2022    3,804    35.83    136,308    -        1.40    (29.11)
2021    4,760    50.54    240,566    -        1.40    9.61 
2020    5,246    46.11    241,863    -        1.40    40.49 
2019    7,368    32.82    241,812    -        1.40    33.69 
American Century VP Ultra® Fund:
2023    5,084    54.57    277,418    -        1.40    41.52 
2022    5,095    38.56    196,434    -        1.40    (33.30)
2021    8,613    57.81    497,912    -        1.40    21.45 
2020    8,885    47.60    422,890    -        1.40    47.78 
2019    11,473    32.21    369,509    -        1.40    32.72 
American Century VP Value Fund:
2023    1,709    25.70    43,927    2.38    1.40    7.58 
2022    1,825    23.89    43,584    2.05    1.40    (0.83)
2021    2,103    24.09    50,658    1.72    1.40    22.78 
2020    3,401    19.62    66,729    2.24    1.40    (0.41)
2019    6,158    19.70    121,311    2.08    1.40    25.32 
BNY Mellon Sustainable U.S. Equity Portfolio - Service Shares:
2023    424    33.46    14,196    0.53    1.40    21.81 
2022    413    27.47    11,352    0.40    1.40    (24.14)
2021    1,505    36.21    54,478    0.60    1.40    24.95 
2020    1,775    28.98    51,437    0.89    1.40    22.12 
2019    1,817    23.73    43,119    1.25    1.40    32.20 
BNY Mellon VIF Appreciation Portfolio - Initial Shares:
2023    59,310    40.87    2,424,037    0.71    1.40    19.29 
2022    64,731    34.26    2,217,530    0.67    1.40    (19.20)
2021    67,626    42.40    2,867,054    0.44    1.40    25.41 
2020    69,973    33.81    2,366,098    0.79    1.40    21.97 
2019    80,732    27.72    2,238,046    1.16    1.40    34.24 
BNY Mellon VIF Growth & Income Portfolio - Initial Shares:
2023    24,410    43.17    1,053,774    0.65    1.40    24.95 
2022    28,110    34.55    971,267    0.80    1.40    (16.00)
2021    29,094    41.13    1,196,620    0.47    1.40    23.92 
2020    30,976    33.19    1,028,284    0.77    1.40    22.88 
2019    33,549    27.01    906,134    1.08    1.40    27.35 
BNY Mellon VIF Opportunistic Small Cap Portfolio - Initial Shares:
2023    24,669    32.33    797,541    0.34    1.40    7.77 
2022    26,347    30.00    790,312    -        1.40    (17.76)
2021    33,637    36.48    1,227,060    0.11    1.40    14.86 
2020    37,322    31.76    1,185,405    0.67    1.40    18.24 
2019    43,394    26.86    1,165,692    -        1.40    20.07 

19

 

EquiTrust Life Annuity Account II

 

Notes to Financial Statements (continued)

 

    As of December 31   Investment         
        Unit       Income   Expense   Total 
Subaccount   Units   Value (A)   Net Assets   Ratio (B)   Ratio (C)   Return (D) 
                          
Calvert VP NASDAQ-100 Index Portfolio:
2023    1,952   $80.57   $ 157,247    0.34%   1.40%   52.28%
2022    2,025    52.91    107,152    0.17    1.40    (33.57)
2021    2,264    79.65    180,313    0.28    1.40    25.12 
2020    2,387    63.66    151,925    0.47    1.40    46.18 
2019    2,462    43.55    107,216    0.53    1.40    36.86 
Calvert VP Russell 2000® Small Cap Index Portfolio:
2023    7,298    39.67    289,480    0.87    1.40    14.99 
2022    7,694    34.50    265,395    0.81    1.40    (21.61)
2021    7,928    44.01    348,897    0.74    1.40    12.96 
2020    8,625    38.96    336,039    1.07    1.40    17.99 
2019    10,322    33.02    340,847    0.94    1.40    23.35 
Calvert VP S&P MidCap 400 Index Portfolio:
2023    5,118    52.59    269,124    1.10    1.40    14.53 
2022    6,246    45.92    286,784    0.94    1.40    (14.52)
2021    8,751    53.72    470,151    0.79    1.40    22.70 
2020    11,230    43.78    491,683    1.20    1.40    11.74 
2019    12,062    39.18    472,564    1.18    1.40    24.11 
Federated Hermes Government Money Fund II - Service Shares:
2023    52,218    9.20    480,261    4.42    1.40    3.14 
2022    59,502    8.92    530,899    1.13    1.40    (0.22)
2021    64,462    8.94    576,511    -        1.40    (1.43)
2020    62,795    9.07    569,451    0.12    1.40    (1.20)
2019    32,798    9.18    300,986    1.64    1.40    0.22 
Federated Hermes Managed Volatility Fund II - Primary Shares:
2023    67,622    17.53    1,185,539    1.87    1.40    7.15 
2022    73,014    16.36    1,194,248    1.93    1.40    (14.92)
2021    87,219    19.23    1,677,239    1.79    1.40    16.90 
2020    90,410    16.45    1,487,579    2.62    1.40    (0.48)
2019    108,033    16.53    1,785,855    2.11    1.40    18.58 
Federated Hermes Quality Bond Fund II - Primary Shares:
2023    61,988    11.49    711,985    2.78    1.40    4.74 
2022    72,768    10.97    798,484    2.62    1.40    (10.52)
2021    82,084    12.26    1,006,670    2.51    1.40    (2.78)
2020    94,834    12.61    1,196,000    2.64    1.40    6.59 
2019    90,399    11.83    1,069,268    3.08    1.40    7.94 
Fidelity® VIP Contrafund® Portfolio - Initial Class:
2023    27,036    64.26    1,737,226    0.47    1.40    31.63 
2022    30,258    48.82    1,477,250    0.50    1.40    (27.33)
2021    33,590    67.18    2,256,649    0.06    1.40    26.06 
2020    35,493    53.29    1,891,375    0.24    1.40    28.75 
2019    44,048    41.39    1,822,962    0.45    1.40    29.79 
Fidelity® VIP Growth & Income Portfolio - Initial Class:            
2023    10,609    39.71    421,296    1.66    1.40    17.07 
2022    10,916    33.92    370,258    1.66    1.40    (6.25)
2021    11,080    36.18    400,904    2.44    1.40    24.20 
2020    11,011    29.13    320,748    2.16    1.40    6.35 
2019    10,806    27.39    295,965    3.56    1.40    28.29 

20

 

EquiTrust Life Annuity Account II

 

Notes to Financial Statements (continued)

 

    As of December 31   Investment         
        Unit       Income   Expense   Total 
Subaccount   Units   Value (A)   Net Assets   Ratio (B)   Ratio (C)   Return (D) 
                          
Fidelity® VIP Growth Portfolio - Initial Class:
2023    6,414   $53.67   $ 344,211    0.12%   1.40%   34.38%
2022    7,287    39.94    291,063    0.61    1.40    (25.50)
2021    7,391    53.61    396,272    -        1.40    21.51 
2020    7,812    44.12    344,660    0.07    1.40    41.91 
2019    6,873    31.09    213,695    0.26    1.40    32.47 
Fidelity® VIP High Income Portfolio - Service Class 2:
2023    2,128    25.92    55,173    5.75    1.40    8.72 
2022    2,175    23.84    51,861    5.12    1.40    (12.90)
2021    2,233    27.37    61,116    5.37    1.40    2.86 
2020    2,202    26.61    58,594    4.79    1.40    0.99 
2019    2,551    26.35    67,207    4.96    1.40    13.19 
Fidelity® VIP Index 500 Portfolio - Initial Class:
2023    25,193    46.28    1,165,922    1.49    1.40    24.44 
2022    25,012    37.19    930,072    1.37    1.40    (19.33)
2021    28,299    46.10    1,304,607    1.25    1.40    26.82 
2020    31,623    36.35    1,149,698    1.78    1.40    16.58 
2019    32,197    31.18    1,003,877    1.93    1.40    29.54 
Fidelity® VIP Mid Cap Portfolio - Service Class 2:
2023    11,290    58.54    660,922    0.39    1.40    13.23 
2022    11,609    51.70    600,259    0.26    1.40    (16.15)
2021    13,070    61.66    805,818    0.36    1.40    23.59 
2020    14,605    49.89    728,689    0.40    1.40    16.24 
2019    16,088    42.92    690,526    0.68    1.40    21.48 
Fidelity® VIP Overseas Portfolio - Initial Class:
2023    3,782    27.62    104,464    1.02    1.40    18.85 
2022    4,112    23.24    95,569    1.08    1.40    (25.51)
2021    4,066    31.20    126,866    0.54    1.40    18.05 
2020    4,035    26.43    106,659    0.32    1.40    14.02 
2019    7,465    23.18    173,068    1.72    1.40    25.98 
Franklin Global Real Estate VIP Fund - Class 2:
2023    1,342    18.09    24,271    2.88    1.40    9.90 
2022    1,360    16.46    22,382    2.37    1.40    (27.07)
2021    1,397    22.57    31,528    1.02    1.40    25.04 
2020    976    18.05    17,616    3.28    1.40    (6.72)
2019    1,242    19.35    24,023    2.65    1.40    20.71 
Franklin Mutual Shares VIP Fund - Class 2:
2023    6,928    27.20    188,456    1.78    1.40    11.89 
2022    7,815    24.31    189,969    1.83    1.40    (8.71)
2021    8,289    26.63    220,695    2.87    1.40    17.57 
2020    9,869    22.65    223,587    2.67    1.40    (6.37)
2019    11,000    24.19    266,127    1.83    1.40    20.89 
Franklin Small Cap Value VIP Fund - Class 2:            
2023    7,734    49.46    382,536    0.52    1.40    11.20 
2022    7,951    44.48    353,650    0.99    1.40    (11.31)
2021    8,444    50.15    423,448    1.01    1.40    23.64 
2020    8,941    40.56    362,654    1.51    1.40    3.73 
2019    10,108    39.10    395,254    1.06    1.40    24.60 

21

 

EquiTrust Life Annuity Account II

 

Notes to Financial Statements (continued)

 

    As of December 31   Investment         
        Unit       Income   Expense   Total 
Subaccount   Units   Value (A)   Net Assets   Ratio (B)   Ratio (C)   Return (D) 
                      
Franklin Small-Mid Cap Growth VIP Fund - Class 2:
2023    6,206   $38.12   $ 236,586    -    %   1.40%   24.98%
2022    6,312    30.50    192,513    -        1.40    (34.61)
2021    8,512    46.64    396,986    -        1.40    8.52 
2020    9,518    42.98    409,119    -        1.40    52.95 
2019    10,935    28.10    307,310    -        1.40    29.61 
Franklin U.S. Government Securities VIP Fund - Class 2:
2023    10,505    12.66    132,999    2.73    1.40    3.01 
2022    11,316    12.29    139,047    2.38    1.40    (11.01)
2021    12,007    13.81    165,770    2.39    1.40    (3.16)
2020    18,020    14.26    256,959    2.72    1.40    2.37 
2019    12,667    13.93    176,409    2.82    1.40    3.80 
Templeton Growth VIP Fund - Class 2:
2023    3,071    20.32    62,390    3.79    1.40    19.39 
2022    5,195    17.02    88,438    0.16    1.40    (12.76)
2021    7,799    19.51    152,115    1.08    1.40    3.45 
2020    10,438    18.86    196,856    3.09    1.40    4.31 
2019    13,797    18.08    249,393    2.76    1.40    13.57 
LVIP JPMorgan Mid Cap Value Fund - Standard:
2023    13,731    58.62    804,904    3.15    1.40    9.39 
2022    14,759    53.59    790,894    0.94    1.40    (9.42)
2021    17,299    59.16    1,023,433    0.90    1.40    28.11 
2020    19,000    46.18    877,569    1.48    1.40    (1.03)
2019    22,108    46.66    1,031,625    1.60    1.40    25.03 
LVIP JPMorgan Small Cap Core Fund - Standard:
2023    1,924    40.49    77,898    1.39    1.40    11.54 
2022    1,875    36.30    68,060    0.47    1.40    (20.46)
2021    2,109    45.64    96,263    0.53    1.40    19.73 
2020    2,950    38.12    112,471    0.84    1.40    12.08 
2019    2,355    34.01    80,078    0.39    1.40    22.87 
T. Rowe Price All-Cap Opportunities Portfolio:
2023    22,351    59.74    1,335,215    0.25    1.40    27.19 
2022    23,628    46.97    1,109,735    -        1.40    (22.59)
2021    24,983    60.68    1,515,820    -        1.40    19.14 
2020    27,285    50.93    1,389,695    -        1.40    42.38 
2019    30,494    35.77    1,090,861    0.41    1.40    33.07 
T. Rowe Price Equity Income Portfolio:
2023    25,919    40.73    1,055,642    2.05    1.40    8.04 
2022    30,438    37.70    1,147,512    1.83    1.40    (4.68)
2021    36,351    39.55    1,437,614    1.55    1.40    23.83 
2020    40,809    31.94    1,303,466    2.33    1.40    (0.22)
2019    43,515    32.01    1,392,935    2.29    1.40    24.65 
T. Rowe Price Mid-Cap Growth Portfolio:
2023    25,905    84.66    2,193,076    -        1.40    18.31 
2022    28,669    71.56    2,051,495    -        1.40    (23.64)
2021    33,180    93.72    3,109,668    -        1.40    13.26 
2020    34,300    82.75    2,838,239    -        1.40    22.10 
2019    40,198    67.77    2,724,357    0.13    1.40    29.48 

22

 

EquiTrust Life Annuity Account II

 

Notes to Financial Statements (continued)

 

    As of December 31   Investment         
        Unit       Income   Expense   Total 
Subaccount   Units   Value (A)   Net Assets   Ratio (B)   Ratio (C)   Return (D) 
                          
T. Rowe Price Moderate Allocation Portfolio:
2023    34,614   $33.03   $1,143,250    2.30%   1.40%   13.78%
2022    37,852    29.03    1,098,971    1.53    1.40    (19.45)
2021    41,822    36.04    1,507,252    0.98    1.40    8.55 
2020    43,054    33.20    1,429,518    1.38    1.40    12.93 
2019    44,521    29.40    1,308,704    1.95    1.40    18.17 
T. Rowe Price International Stock Portfolio:
2023    13,406    19.11    256,139    1.00    1.40    14.64 
2022    13,892    16.67    231,533    0.76    1.40    (16.94)
2021    15,249    20.07    306,116    0.58    1.40    (0.10)
2020    18,246    20.09    366,556    0.52    1.40    12.87 
2019    21,862    17.80    389,132    2.38    1.40    26.06 

23

 

EquiTrust Life Annuity Account II

 

Notes to Financial Statements (continued)

 

(A)There are no differences in unit value between accumulation units and units of contracts in annuitization period since there are no differences in charges that result in direct reductions of unit values.

 

(B)These ratios represent the dividends, excluding distributions of capital gains, received by the subaccount from the underlying mutual fund, net of management fees assessed by the fund manager, divided by the average net assets. These ratios exclude those expenses, such as mortality and expense charges, that result in direct reductions in the unit values. The recognition of investment income by the subaccount is affected by the timing of the declaration of dividends by the underlying fund in which the subaccounts invest.

 

(C)These ratios represent the annualized contract expenses of the separate account, consisting of mortality and expense risk charges, for the period indicated. The ratios include only those expenses that result in a direct reduction to unit values. Charges made directly to contract owner accounts through the redemption of units and expenses of the underlying fund are excluded.

 

(D)These ratios represent the total return for the period indicated, including changes in the value of the underlying fund, and reflect deductions for all items included in the expense ratio. The total return does not include any expenses assessed through the redemption of units; inclusion of these expenses in the calculation would result in a reduction in the total return presented.

 

7. Subsequent Events

 

Reorganization of American Century Variable Portfolio funds into newly formed funds of Lincoln Variable Insurance Products Trust was approved April 4, 2024. On or about April 26, 2024, assets of each fund will be transferred as noted below. In addition, subaccounts that invest in the American Century Variable Portfolio funds will transfer their investment into the respective newly formed fund as noted below.

 

New formed fund/portfolio   Former fund/portfolio
LVIP American Century Capital Appreciation Fund – Standard II   American Century VP Capital Appreciation Fund
LVIP American Century Inflation Protection Fund – Standard II   American Century VP Inflation Protection Bond Fund
LVIP American Century Mid Cap Value Fund – Standard II   American Century VP Mid Cap Value Fund
LVIP American Century Ultra Fund – Standard II   American Century VP Ultra® Fund
LVIP American Century Value Fund – Standard II   American Century VP Value Fund

24