Report of Independent Registered Public Accounting Firm

 

 

The Board of Directors and Contract Owners of EquiTrust Life Variable 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 Variable 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 1999.

 

Des Moines, Iowa

April 24, 2024

1

 

 

Appendix:

Subaccounts comprising EquiTrust Life Variable Account II

 

Subaccounts  

American Century VP Capital Appreciation Fund

American Century VP Mid Cap Value 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 Variable 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		   Total net assets   Cost   Shares owned   Accumulation
units outstanding		 
American Century VP Capital Appreciation Fund  $64,953   $64,953   $64,953   $62,195    4,567.69    1,340.80 
American Century VP Mid Cap Value Fund   55,482    55,482    55,482    53,337    2,854.00    1,693.43 
American Century VP Ultra® Fund   138,372    138,372    138,372    116,124    5,394.61    2,255.28 
American Century VP Value Fund   69,901    69,901    69,901    61,371    5,734.30    2,501.32 
BNY Mellon Sustainable U.S. Equity Portfolio - Service Shares   1,544    1,544    1,544    1,340    35.02    38.75 
BNY Mellon VIF Appreciation Portfolio - Initial Shares   2,746,795    2,746,795    2,746,795    2,926,920    78,435.04    58,495.54 
BNY Mellon VIF Growth & Income Portfolio - Initial Shares   1,010,112    1,010,112    1,010,112    923,927    31,253.46    21,199.33 
BNY Mellon VIF Opportunistic Small Cap Portfolio - Initial Shares   1,408,856    1,408,856    1,408,856    1,451,617    33,600.20    40,667.91 
Calvert VP NASDAQ-100 Index Portfolio   145,902    145,902    145,902    94,546    1,019.08    1,253.91 
Calvert VP Russell 2000® Small Cap Index Portfolio   201,484    201,484    201,484    188,567    2,526.13    4,647.23 
Calvert VP S&P MidCap 400 Index Portfolio   198,707    198,707    198,707    176,522    1,661.43    3,270.46 
Federated Hermes Government Money Fund II - Service Shares   662,440    662,440    662,440    662,440    662,440.41    67,721.63 
Federated Hermes Managed Volatility Fund II - Primary Shares   1,483,977    1,483,977    1,483,977    1,720,369    164,520.76    79,614.91 
Federated Hermes Quality Bond Fund II - Primary Shares   548,690    548,690    548,690    589,683    54,111.45    44,919.27 
Fidelity® VIP Contrafund® Portfolio - Initial Class   1,484,041    1,484,041    1,484,041    1,135,271    30,516.99    20,894.01 
Fidelity® VIP Growth & Income Portfolio - Initial Class   120,561    120,561    120,561    91,917    4,458.61    2,721.59 
Fidelity® VIP Growth Portfolio - Initial Class   518,977    518,977    518,977    455,710    5,574.40    8,597.64 
Fidelity® VIP High Income Portfolio - Service Class 2   97,868    97,868    97,868    111,654    22,344.22    3,468.24 
Fidelity® VIP Index 500 Portfolio - Initial Class   628,631    628,631    628,631    349,343    1,361.29    12,001.54 
Fidelity® VIP Mid Cap Portfolio - Service Class 2   654,761    654,761    654,761    617,930    18,874.62    10,049.95 
Fidelity® VIP Overseas Portfolio - Initial Class   79,386    79,386    79,386    67,682    3,074.60    2,738.05 
Franklin Global Real Estate VIP Fund - Class 2   54,793    54,793    54,793    64,083    4,366.00    3,255.01 
Franklin Mutual Shares VIP Fund - Class 2   147,004    147,004    147,004    162,142    9,589.31    4,687.49 
Franklin Small Cap Value VIP Fund - Class 2   288,288    288,288    288,288    302,571    21,724.82    5,061.63 
Franklin Small-Mid Cap Growth VIP Fund - Class 2   198,869    198,869    198,869    226,116    14,930.11    4,456.67 
Franklin U.S. Government Securities VIP Fund - Class 2   137,617    137,617    137,617    158,731    13,283.48    9,761.55 
Templeton Growth VIP Fund - Class 2   185,390    185,390    185,390    185,401    15,462.04    8,143.44 
LVIP JPMorgan Mid Cap Value Fund - Standard   431,820    431,820    431,820    443,506    42,447.67    6,449.68 
LVIP JPMorgan Small Cap Core Fund - Standard   237,213    237,213    237,213    247,568    11,950.87    5,558.49 
T. Rowe Price All-Cap Opportunities Portfolio   1,305,705    1,305,705    1,305,705    1,182,649    37,956.53    20,594.03 
T. Rowe Price Equity Income Portfolio   731,277    731,277    731,277    719,666    26,342.85    15,843.81 
T. Rowe Price Mid-Cap Growth Portfolio   2,410,888    2,410,888    2,410,888    2,312,269    82,819.94    25,957.67 
T. Rowe Price Moderate Allocation Portfolio   1,082,346    1,082,346    1,082,346    1,107,029    54,063.23    28,010.49 
T. Rowe Price International Stock Portfolio   374,582    374,582    374,582    374,587    24,955.53    16,789.51 

 

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

3

EquiTrust Life Variable 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  $-       $(537)  $(537)  $(698)  $87   $(611)  $11,910   $10,762 
American Century VP Mid Cap Value Fund   1,241    (478)   763    974    5,920    6,894    (4,917)   2,740 
American Century VP Ultra® Fund   -        (1,082)   (1,082)   2,369    8,437    10,806    32,075    41,799 
American Century VP Value Fund   1,577    (588)   989    293    5,107    5,400    (1,114)   5,275 
BNY Mellon Sustainable U.S. Equity Portfolio - Service Shares   7    (12)   (5)   18    167    185    105    285 
BNY Mellon VIF Appreciation Portfolio - Initial Shares   18,422    (22,948)   (4,526)   (60,617)   217,346    156,729    313,636    465,839 
BNY Mellon VIF Growth & Income Portfolio - Initial Shares   6,094    (8,269)   (2,175)   5,558    98,597    104,155    106,822    208,802 
BNY Mellon VIF Opportunistic Small Cap Portfolio - Initial Shares   4,417    (12,048)   (7,631)   20,041    29,771    49,812    67,653    109,834 
Calvert VP NASDAQ-100 Index Portfolio   418    (1,107)   (689)   2,402    -        2,402    49,268    50,981 
Calvert VP Russell 2000® Small Cap Index Portfolio   1,637    (1,623)   14    (447)   104    (343)   26,910    26,581 
Calvert VP S&P MidCap 400 Index Portfolio   2,281    (1,638)   643    1,444    7,697    9,141    16,354    26,138 
Federated Hermes Government Money Fund II - Service Shares   29,258    (5,913)   23,345    -        -        -        -        23,345 
Federated Hermes Managed Volatility Fund II - Primary Shares   26,373    (12,634)   13,739    (40,805)   -        (40,805)   134,771    107,705 
Federated Hermes Quality Bond Fund II - Primary Shares   14,329    (4,833)   9,496    (7,335)   -        (7,335)   25,128    27,289 
Fidelity® VIP Contrafund® Portfolio - Initial Class   6,587    (11,864)   (5,277)   11,516    47,414    58,930    315,900    369,553 
Fidelity® VIP Growth & Income Portfolio - Initial Class   1,893    (995)   898    1,409    4,260    5,669    11,689    18,256 
Fidelity® VIP Growth Portfolio - Initial Class   602    (4,209)   (3,607)   10,502    21,711    32,213    111,434    140,040 
Fidelity® VIP High Income Portfolio - Service Class 2   5,379    (823)   4,556    (361)   -        (361)   4,067    8,262 
Fidelity® VIP Index 500 Portfolio - Initial Class   8,421    (5,051)   3,370    17,901    5,112    23,013    100,309    126,692 
Fidelity® VIP Mid Cap Portfolio - Service Class 2   2,384    (5,550)   (3,166)   (1,064)   17,799    16,735    66,225    79,794 
Fidelity® VIP Overseas Portfolio - Initial Class   779    (701)   78    2,212    197    2,409    11,701    14,188 
Franklin Global Real Estate VIP Fund - Class 2   1,417    (442)   975    (1,061)   -        (1,061)   5,212    5,126 
Franklin Mutual Shares VIP Fund - Class 2   2,586    (1,216)   1,370    (1,594)   11,904    10,310    4,736    16,416 
Franklin Small Cap Value VIP Fund - Class 2   1,440    (2,428)   (988)   (8,081)   15,610    7,529    24,533    31,074 
Franklin Small-Mid Cap Growth VIP Fund - Class 2   -        (1,568)   (1,568)   (1,632)   -        (1,632)   43,808    40,608 
Franklin U.S. Government Securities VIP Fund - Class 2   3,658    (1,200)   2,458    (1,315)   -        (1,315)   3,554    4,697 
Templeton Growth VIP Fund - Class 2   5,706    (1,526)   4,180    (278)   -        (278)   26,992    30,894 
LVIP JPMorgan Mid Cap Value Fund - Standard   12,805    (3,583)   9,222    1,443    34,847    36,290    (6,394)   39,118 
LVIP JPMorgan Small Cap Core Fund - Standard   3,033    (1,972)   1,061    (1,707)   1,937    230    24,361    25,652 
T. Rowe Price All-Cap Opportunities Portfolio   2,993    (10,526)   (7,533)   11,054    85,990    97,044    199,240    288,751 
T. Rowe Price Equity Income Portfolio   14,511    (6,188)   8,323    5,298    29,762    35,060    14,618    58,001 
T. Rowe Price Mid-Cap Growth Portfolio   -        (19,987)   (19,987)   3,598    144,264    147,862    263,861    391,736 
T. Rowe Price Moderate Allocation Portfolio   23,527    (9,046)   14,481    (1,259)   2,935    1,676    120,597    136,754 

 

See accompanying notes.

4

EquiTrust Life Variable 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 International Stock Portfolio  $3,556   $(3,189)  $367   $(2,489)  $-       $(2,489)  $52,768   $50,646 

 

See accompanying notes.

5

EquiTrust Life Variable 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 policy loans   Transfers of cost of insurance and other charges   Transfers between subaccounts, including Declared Interest Option account   Net increase (decrease) in net assets from contract transactions   Total increase in net assets   Net Assets at December 31, 2023 
American Century VP Capital Appreciation Fund  $55,417   $(537)  $(611)  $11,910   $10,762   $3,411   $(1,578)  $-       $(3,059)  $-       $(1,226)  $9,536   $64,953 
American Century VP Mid Cap Value Fund   53,857    763    6,894    (4,917)   2,740    474    -        -        (1,582)   (7)   (1,115)   1,625    55,482 
American Century VP Ultra® Fund   99,428    (1,082)   10,806    32,075    41,799    3,525    (2,100)   -        (4,280)   -        (2,855)   38,944    138,372 
American Century VP Value Fund   65,125    989    5,400    (1,114)   5,275    2,623    (201)   (621)   (2,347)   47    (499)   4,776    69,901 
BNY Mellon Sustainable U.S. Equity Portfolio - Service Shares   1,293    (5)   185    105    285    76    -        -        (110)   -        (34)   251    1,544 
BNY Mellon VIF Appreciation Portfolio - Initial Shares   2,384,685    (4,526)   156,729    313,636    465,839    68,882    (47,164)   (10,637)   (97,382)   (17,428)   (103,729)   362,110    2,746,795 
BNY Mellon VIF Growth & Income Portfolio - Initial Shares   824,220    (2,175)   104,155    106,822    208,802    25,331    (2,584)   (10,169)   (35,376)   (112)   (22,910)   185,892    1,010,112 
BNY Mellon VIF Opportunistic Small Cap Portfolio - Initial Shares   1,328,198    (7,631)   49,812    67,653    109,834    53,117    (13,874)   (3,904)   (56,735)   (7,780)   (29,176)   80,658    1,408,856 
Calvert VP NASDAQ-100 Index Portfolio   96,723    (689)   2,402    49,268    50,981    2,696    -        -        (4,237)   (261)   (1,802)   49,179    145,902 
Calvert VP Russell 2000® Small Cap Index Portfolio   174,953    14    (343)   26,910    26,581    9,762    (11,528)   -        (8,894)   10,610    (50)   26,531    201,484 
Calvert VP S&P MidCap 400 Index Portfolio   174,943    643    9,141    16,354    26,138    7,000    (1,804)   -        (7,491)   (79)   (2,374)   23,764    198,707 
Federated Hermes Government Money Fund II - Service Shares   657,487    23,345    -        -        23,345    45,767    (32,999)   (1,434)   (29,669)   (57)   (18,392)   4,953    662,440 
Federated Hermes Managed Volatility Fund II - Primary Shares   1,414,348    13,739    (40,805)   134,771    107,705    84,647    (41,411)   (8,991)   (64,796)   (7,525)   (38,076)   69,629    1,483,977 
Federated Hermes Quality Bond Fund II - Primary Shares   540,860    9,496    (7,335)   25,128    27,289    34,958    (13,971)   (1,993)   (31,518)   (6,935)   (19,459)   7,830    548,690 
Fidelity® VIP Contrafund® Portfolio - Initial Class   1,161,139    (5,277)   58,930    315,900    369,553    40,081    (29,605)   (1,452)   (53,098)   (2,577)   (46,651)   322,902    1,484,041 
Fidelity® VIP Growth & Income Portfolio - Initial Class   103,708    898    5,669    11,689    18,256    5,025    -        -        (6,174)   (254)   (1,403)   16,853    120,561 

 

See accompanying notes.

6

EquiTrust Life Variable 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 policy loans   Transfers of cost of insurance and other charges   Transfers between subaccounts, including Declared Interest Option account   Net increase (decrease) in net assets from contract transactions   Total increase in net assets   Net Assets at December 31, 2023 
Fidelity® VIP Growth Portfolio -Initial Class  $412,041   $(3,607)  $32,213   $111,434   $140,040   $14,544   $(26,711)  $(763)  $(24,110)  $3,936   $(33,104)  $106,936   $518,977 
Fidelity® VIP High Income Portfolio - Service Class 2   88,099    4,556    (361)   4,067    8,262    3,836    (394)   (681)   (2,810)   1,556    1,507    9,769    97,868 
Fidelity® VIP Index 500 Portfolio - Initial Class   510,344    3,370    23,013    100,309    126,692    17,411    (8,633)   (1,817)   (18,231)   2,865    (8,405)   118,287    628,631 
Fidelity® VIP Mid Cap Portfolio - Service Class 2   606,730    (3,166)   16,735    66,225    79,794    26,479    (29,628)   (1,736)   (37,730)   10,852    (31,763)   48,031    654,761 
Fidelity® VIP Overseas Portfolio - Initial Class   74,824    78    2,409    11,701    14,188    3,589    (10,142)   (624)   (2,240)   (209)   (9,626)   4,562    79,386 
Franklin Global Real Estate VIP Fund - Class 2   47,786    975    (1,061)   5,212    5,126    4,977    -        -        (2,976)   (120)   1,881    7,007    54,793 
Franklin Mutual Shares VIP Fund - Class 2   130,234    1,370    10,310    4,736    16,416    7,650    (2,732)   (641)   (5,659)   1,736    354    16,770    147,004 
Franklin Small Cap Value VIP Fund - Class 2   270,065    (988)   7,529    24,533    31,074    12,610    (13,029)   (144)   (13,049)   761    (12,851)   18,223    288,288 
Franklin Small-Mid Cap Growth VIP Fund - Class 2   158,661    (1,568)   (1,632)   43,808    40,608    4,433    (72)   (220)   (5,028)   487    (400)   40,208    198,869 
Franklin U.S. Government Securities VIP Fund - Class 2   133,494    2,458    (1,315)   3,554    4,697    4,881    (605)   (661)   (5,292)   1,103    (574)   4,123    137,617 
Templeton Growth VIP Fund - Class 2   154,846    4,180    (278)   26,992    30,894    9,113    (842)   (631)   (7,906)   (84)   (350)   30,544    185,390 
LVIP JPMorgan Mid Cap Value Fund - Standard   396,847    9,222    36,290    (6,394)   39,118    12,422    (389)   (2,438)   (17,556)   3,816    (4,145)   34,973    431,820 
LVIP JPMorgan Small Cap Core Fund - Standard   215,089    1,061    230    24,361    25,652    7,291    (2,381)   -        (8,721)   283    (3,528)   22,124    237,213 
T. Rowe Price All-Cap Opportunities Portfolio   1,052,568    (7,533)   97,044    199,240    288,751    22,929    (5,738)   (2,966)   (49,093)   (746)   (35,614)   253,137    1,305,705 
T. Rowe Price Equity Income Portfolio   706,232    8,323    35,060    14,618    58,001    19,618    (26,789)   -        (26,256)   471    (32,956)   25,045    731,277 
T. Rowe Price Mid-Cap Growth Portfolio   2,115,485    (19,987)   147,862    263,861    391,736    48,873    (60,729)   (1,324)   (74,235)   (8,918)   (96,333)   295,403    2,410,888 

 

See accompanying notes.

7

EquiTrust Life Variable 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 policy loans   Transfers of cost of insurance and other charges   Transfers between subaccounts, including Declared Interest Option account   Net increase (decrease) in net assets from contract transactions   Total increase in net assets   Net Assets at December 31, 2023 
T. Rowe Price Moderate Allocation  Portfolio  $965,181   $14,481   $1,676   $120,597   $136,754$   39,040   $(6,016)  $(1,832)  $(40,497)  $(10,284)  $(19,589)  $117,165   $1,082,346 
T. Rowe Price International Stock Portfolio   337,522    367    (2,489)   52,768    50,646    16,179    (8,525)   (1,115)   (13,896)   (6,229)   (13,586)   37,060    374,582 

 

See accompanying notes.

8

EquiTrust Life Variable 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 increase (decrease) in net assets from operations   Transfers of net premiums   Transfers of surrenders and death benefits   Transfers of policy loans   Transfers of cost of insurance 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  $82,321   $(545)  $7,758   $(30,653)  $(23,440)  $5,777   $(2,464)  $(2,556)  $(2,964)  $(1,257)  $(3,464)  $(26,904)  $55,417 
American Century VP Mid Cap Value Fund   56,991    734    9,008    (10,910)   (1,168)   326    -        (767)   (1,525)   -        (1,966)   (3,134)   53,857 
American Century VP Ultra® Fund   148,809    (1,022)   15,011    (62,588)   (48,599)   7,432    (2,450)   -        (4,041)   (1,723)   (782)   (49,381)   99,428 
American Century VP Value Fund   74,984    770    9,173    (10,056)   (113)   2,754    -        (4,462)   (2,284)   (5,754)   (9,746)   (9,859)   65,125 
BNY Mellon Sustainable U.S. Equity Portfolio - Service Shares   1,732    (9)   125    (528)   (412)   76    -        -        (103)   -        (27)   (439)   1,293 
BNY Mellon VIF Appreciation Portfolio - Initial Shares   3,076,379    (5,652)   732,913    (1,297,648)   (570,387)   73,398    (89,771)   (3,395)   (94,691)   (6,848)   (121,307)   (691,694)   2,384,685 
BNY Mellon VIF Growth & Income Portfolio - Initial Shares   1,005,705    (854)   190,763    (345,409)   (155,500)   27,499    (15,828)   -        (33,982)   (3,674)   (25,985)   (181,485)   824,220 
BNY Mellon VIF Opportunistic Small Cap Portfolio - Initial Shares   1,802,021    (13,378)   415,535    (707,479)   (305,322)   53,703    (114,368)   (47,168)   (56,359)   (4,309)   (168,501)   (473,823)   1,328,198 
Calvert VP NASDAQ-100 Index Portfolio   142,619    (788)   7,762    (54,325)   (47,351)   2,500    -        -        (3,867)   2,822    1,455    (45,896)   96,723 
Calvert VP Russell 2000® Small Cap Index Portfolio   225,415    (118)   21,215    (67,747)   (46,650)   10,704    (8,955)   -        (7,423)   1,862    (3,812)   (50,462)   174,953 
Calvert VP S&P MidCap 400 Index Portfolio   208,632    85    22,916    (52,028)   (29,027)   8,201    (4,705)   -        (6,821)   (1,337)   (4,662)   (33,689)   174,943 
Federated Hermes Government Money Fund II - Service Shares   657,662    1,681    -        -        1,681    48,528    (14,500)   (5,388)   (29,424)   (1,072)   (1,856)   (175)   657,487 
Federated Hermes Managed Volatility Fund II - Primary Shares   1,731,601    14,922    308,667    (573,071)   (249,482)   84,962    (50,621)   (32,266)   (63,328)   (6,518)   (67,771)   (317,253)   1,414,348 
Federated Hermes Quality Bond Fund II - Primary Shares   639,672    9,977    1,867    (75,800)   (63,956)   34,246    (3,440)   (32,839)   (30,681)   (2,142)   (34,856)   (98,812)   540,860 
Fidelity® VIP Contrafund® Portfolio - Initial Class   1,726,766    (5,283)   106,598    (555,761)   (454,446)   41,950    (77,369)   (28,993)   (48,235)   1,466    (111,181)   (565,627)   1,161,139 
Fidelity® VIP Growth & Income Portfolio - Initial Class   122,037    788    5,404    (12,765)   (6,573)   5,003    (10,414)   -        (5,937)   (408)   (11,756)   (18,329)   103,708 

 

See accompanying notes.

9

EquiTrust Life Variable 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 increase (decrease) in net assets from operations   Transfers of net premiums   Transfers of surrenders and death benefits   Transfers of policy loans   Transfers of cost of insurance 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 Growth Portfolio - Initial Class

  $742,066   $(1,420)  $74,668   $(255,228)  $(181,980)  $16,052   $(13,913)  $(119,004)  $(23,539)  $(7,641)  $(148,045)  $(330,025)  $412,041 
Fidelity® VIP High Income Portfolio - Service Class 2   100,776    3,924    (683)   (15,790)   (12,549)   3,701    -        -        (2,665)   (1,164)   (128)   (12,677)   88,099 
Fidelity® VIP Index 500 Portfolio - Initial Class   634,880    3,146    20,684    (143,789)   (119,959)   20,716    (8,606)   -        (16,652)   (35)   (4,577)   (124,536)   510,344 
Fidelity® VIP Mid Cap Portfolio - Service Class 2   752,216    (3,943)   43,617    (155,582)   (115,908)   27,743    (12,062)   (12,596)   (35,601)   2,938    (29,578)   (145,486)   606,730 
Fidelity® VIP Overseas Portfolio - Initial Class   99,667    153    1,614    (26,624)   (24,857)   3,655    (1,996)   -        (2,170)   525    14    (24,843)   74,824 
Franklin Global Real Estate VIP Fund - Class 2   63,392    795    3,244    (21,105)   (17,066)   4,845    -        -        (3,295)   (90)   1,460    (15,606)   47,786 
Franklin Mutual Shares VIP Fund - Class 2   144,396    1,272    12,557    (25,468)   (11,639)   8,392    (2,198)   (1,368)   (5,350)   (1,999)   (2,523)   (14,162)   130,234 
Franklin Small Cap Value VIP Fund - Class 2   321,796    260    45,531    (80,312)   (34,521)   13,278    (6,905)   (10,749)   (12,909)   75    (17,210)   (51,731)   270,065 
Franklin Small-Mid Cap Growth VIP Fund - Class 2   250,351    (1,615)   39,841    (123,943)   (85,717)   7,425    (8,161)   (3,433)   (4,862)   3,058    (5,973)   (91,690)   158,661 
Franklin U.S. Government Securities VIP Fund - Class 2   151,186    2,037    (1,217)   (16,701)   (15,881)   5,039    (1,845)   -        (5,127)   122    (1,811)   (17,692)   133,494 
Templeton Growth VIP Fund - Class 2   173,737    (1,153)   113    (19,938)   (20,978)   8,811    (793)   (2,104)   (6,795)   2,968    2,087    (18,891)   154,846 
LVIP JPMorgan Mid Cap Value Fund - Standard   462,954    258    71,136    (112,668)   (41,274)   12,634    (162)   (16,388)   (17,129)   (3,788)   (24,833)   (66,107)   396,847 
LVIP JPMorgan Small Cap Core Fund - Standard   285,396    (1,037)   50,017    (105,570)   (56,590)   7,915    (5,399)   (8,530)   (8,323)   620    (13,717)   (70,307)   215,089 
T. Rowe Price All-Cap Opportunities Portfolio   1,432,122    (10,333)   78,878    (378,639)   (310,094)   24,414    (38,889)   (2,337)   (47,605)   (5,043)   (69,460)   (379,554)   1,052,568 
T. Rowe Price Equity Income Portfolio   776,488    7,131    55,645    (93,449)   (30,673)   23,733    (33,451)   -        (26,112)   (3,753)   (39,583)   (70,256)   706,232 
T. Rowe Price Mid-Cap Growth Portfolio   2,939,789    (20,625)   89,108    (741,583)   (673,100)   53,765    (126,825)   (3,874)   (73,103)   (1,167)   (151,204)   (824,304)   2,115,485 

 

See accompanying notes. 

10

EquiTrust Life Variable 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 increase (decrease) in net assets from operations   Transfers of net premiums   Transfers of surrenders and death benefits   Transfers of policy loans   Transfers of cost of insurance 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 Moderate Allocation Portfolio  $1,259,523   $6,965   $23,961   $(268,813)  $(237,887)  $41,539   $(21,075)  $(34,900)  $(39,298)  $(2,721)  $(56,455)  $(294,342)  $965,181 
T. Rowe Price International Stock Portfolio   388,914    (310)   7,402    (71,005)   (63,913)   16,618    (4,772)   -        (12,977)   13,652    12,521    (51,392)   337,522 

 

  

See accompanying notes. 

11

EquiTrust Life Variable Account II

 

Notes to Financial Statements

 

December 31, 2023

 

1. Organization and Significant Accounting Policies

 

Organization

 

EquiTrust Life Variable 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 flexible premium variable life insurance policies and flexible premium last survivor variable life insurance policies issued by the Company. The Company discontinued underwriting new sales of all variable life insurance policies 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 life insurance policies is not available to satisfy liabilities arising out of any other business the Company may conduct.

 

At the direction of eligible policy 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 policy 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

 

 

American Century Variable Portfolios, Inc.
American Century VP Capital Appreciation Fund
American Century VP Inflation Protection Bond Fund (1)
American Century VP Mid Cap Value Fund
American Century VP Ultra® Fund
American Century VP Value Fund
BNY Mellon Sustainable U.S. Equity Portfolio, Inc.
BNY Mellon Sustainable U.S. Equity Portfolio – Service Shares
BNY Mellon Variable Investment Fund
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 Variable Products, Inc.
Calvert VP NASDAQ-100 Index Portfolio
Calvert VP Russell 2000® Small Cap Index Portfolio
Calvert VP S&P MidCap 400 Index Portfolio
Federated Hermes Insurance Series
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® Variable Insurance Products Funds
Fidelity® VIP Contrafund® Portfolio - Initial Class
Fidelity® VIP Growth & Income Portfolio - Initial Class
Fidelity® VIP Growth Portfolio - Initial Class
Fidelity® Variable Insurance Products Funds (cont.)
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 Templeton Variable Insurance Products Trust
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
Lincoln Variable Insurance Products Trust (2)
LVIP JPMorgan Mid Cap Value Fund – Standard (2)
LVIP JPMorgan Small Cap Core Fund – Standard (2)
T. Rowe Price Equity Series, Inc.
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 Series, Inc.
T. Rowe Price International Stock Portfolio


12

EquiTrust Life Variable 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.

 

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.

 

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 policies 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 0.90% of the average daily net asset value of the Account. These charges are assessed in return for

13

EquiTrust Life Variable Account II

 

Notes to Financial Statements (continued)

 

the Company’s assumption of risks associated with adverse mortality experience or excess administrative expenses in connection with policies issued.

 

Premium Expense Charge: Premiums paid by the policyholders are reduced by a 7% premium expense charge for flexible premium variable life insurance policies. (For any flexible premium variable life insurance policy issued prior to May 1, 2005, the premium expense charge is 7% of each premium up to the target premium, as defined in the prospectus, and 2% for each premium over the target premium.) Premiums paid by the policyholders are reduced by a 7% premium expense charge up to the target premium, as defined in the prospectus, and 2% for each premium over the target premium for flexible premium last survivor variable life insurance policies. The charge is used to compensate the Company for expenses incurred in connection with the distribution of the policies and for premium taxes imposed by various states and political subdivisions.

 

Cost of Insurance and Policy Charges: The Company assumes the responsibility for providing insurance benefits included in the policy. The cost of insurance is determined each month based upon the applicable insurance rate and current net amount at risk. A policy expense charge of $7 and $10 for flexible premium variable life insurance policies and flexible premium last survivor variable life insurance policies, respectively, is deducted monthly for the administration of policies and the Account. (For any flexible premium variable life insurance policy purchased prior to May 1, 2005, a $5 expense charge is deducted monthly for administration of policies and the Account.) Flexible premium last survivor variable life insurance policies apply an additional monthly charge of $.03 per $1,000 of the Specified Amount (amount of insurance selected) for the administration of policies and the Account. During the first twelve policy months immediately following an increase in Specified Amount, a monthly charge of $.07 and $.10 for flexible premium variable life insurance policies and flexible premium last survivor variable life insurance policies, respectively, for every $1,000 of the Specified Amount or increase in the Specified Amount is deducted. (For any flexible premium variable life insurance policy purchased prior to May 1, 2005, a $.05 expense is charged per $1,000 of the Specified Amount or increase in the Specified Amount.)

 

Other Charges: A transfer charge of $25 may be imposed for the thirteenth and each subsequent transfer between subaccounts in any one policy year. In the event of a partial withdrawal, a fee equal to the lesser of $25 or 2% of the accumulated value withdrawn will be imposed. A surrender charge is applicable for all full policy surrenders or lapses in the first six and ten years for flexible premium variable life insurance policies and flexible premium last survivor variable life insurance policies, respectively, of the policy or following increases in the Specified Amount. This surrender charge varies based on age, sex, underwriting class and policy year as described in the Account’s prospectus.

 

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 policies. 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 policies. 

14

EquiTrust Life Variable 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  $2,446   $4,122 
American Century VP Mid Cap Value Fund   7,639    2,071 
American Century VP Ultra® Fund   11,356    6,856 
American Century VP Value Fund   8,262    2,665 
           
BNY Mellon Sustainable U.S. Equity Portfolio, Inc.:          
BNY Mellon Sustainable U.S. Equity Portfolio - Service Shares   218    90 
           
BNY Mellon Variable Investment Fund:          
BNY Mellon VIF Appreciation Portfolio - Initial Shares   257,504    148,413 
BNY Mellon VIF Growth & Income Portfolio - Initial Shares   114,882    41,370 
BNY Mellon VIF Opportunistic Small Cap Portfolio - Initial Shares   62,058    69,094 
           
Calvert Variable Products, Inc.:          
Calvert VP NASDAQ-100 Index Portfolio   2,337    4,828 
Calvert VP Russell 2000® Small Cap Index Portfolio   18,110    18,042 
Calvert VP S&P MidCap 400 Index Portfolio   14,840    8,874 
           
Federated Hermes Insurance Series:          
Federated Hermes Government Money Fund II - Service Shares   56,166    51,213 
Federated Hermes Managed Volatility Fund II - Primary Shares   69,286    93,623 
Federated Hermes Quality Bond Fund II - Primary Shares   32,643    42,606 
           
Fidelity® Variable Insurance Products Funds:          
Fidelity® VIP Contrafund® Portfolio - Initial Class   71,807    76,321 
Fidelity® VIP Growth & Income Portfolio - Initial Class   9,033    5,278 
Fidelity® VIP Growth Portfolio - Initial Class   33,684    48,684 
Fidelity® VIP High Income Portfolio - Service Class 2   9,553    3,490 
Fidelity® VIP Index 500 Portfolio - Initial Class   25,716    25,639 
Fidelity® VIP Mid Cap Portfolio - Service Class 2   46,874    64,004 
Fidelity® VIP Overseas Portfolio - Initial Class   3,450    12,801 

15

EquiTrust Life Variable 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  $5,736   $2,880 
Franklin Mutual Shares VIP Fund - Class 2   21,287    7,659 
Franklin Small Cap Value VIP Fund - Class 2   26,587    24,816 
Franklin Small-Mid Cap Growth VIP Fund - Class 2   3,048    5,016 
Franklin U.S. Government Securities VIP Fund - Class 2   7,282    5,398 
Templeton Growth VIP Fund - Class 2   12,724    8,894 
           
Lincoln Variable Insurance Products Trust:          
LVIP JPMorgan Mid Cap Value Fund - Standard   57,847    17,923 
LVIP JPMorgan Small Cap Core Fund - Standard   10,098    10,628 
           
T. Rowe Price Equity Series, Inc.:          
T. Rowe Price All-Cap Opportunities Portfolio   97,140    54,297 
T. Rowe Price Equity Income Portfolio   53,352    48,223 
T. Rowe Price Mid-Cap Growth Portfolio   161,086    133,142 
T. Rowe Price Moderate Allocation Portfolio   45,132    47,305 
           
T. Rowe Price International Series, Inc.:          
T. Rowe Price International Stock Portfolio   11,550    24,769 

16

EquiTrust Life Variable 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   57    84    (27)   74    154    (80)
American Century VP Mid Cap Value Fund   16    52    (36)   24    87    (63)
American Century VP Ultra® Fund   62    112    (50)   136    143    (7)
American Century VP Value Fund   65    84    (19)   78    449    (371)
                               
BNY Mellon Sustainable U.S. Equity Portfolio, Inc.:                              
BNY Mellon Sustainable U.S. Equity Portfolio - Service Shares   1    2    (1)   1    2    (1)
                               
BNY Mellon Variable Investment Fund:                              
BNY Mellon VIF Appreciation Portfolio - Initial Shares   633    3,024    (2,391)   857    3,755    (2,898)
BNY Mellon VIF Growth & Income Portfolio - Initial Shares   281    801    (520)   432    1,087    (655)
BNY Mellon VIF Opportunistic Small Cap Portfolio - Initial Shares   943    1,801    (858)   911    5,942    (5,031)
                               
Calvert Variable Products, Inc.:                              
Calvert VP NASDAQ-100 Index Portfolio   22    40    (18)   62    42    20 
Calvert VP Russell 2000® Small Cap Index Portfolio   419    435    (16)   278    348    (70)
Calvert VP S&P MidCap 400 Index Portfolio   95    139    (44)   125    205    (80)
                               
Federated Hermes Insurance Series:                              
Federated Hermes Government Money Fund II - Service Shares   3,045    4,952    (1,907)   3,891    4,089    (198)
Federated Hermes Managed Volatility Fund II - Primary Shares   2,711    4,830    (2,119)   2,660    6,461    (3,801)
Federated Hermes Quality Bond Fund II - Primary Shares   1,670    3,328    (1,658)   1,511    4,466    (2,955)
                               
Fidelity® Variable Insurance Products Funds:                              
Fidelity® VIP Contrafund® Portfolio - Initial Class   335    1,064    (729)   398    2,258    (1,860)
Fidelity® VIP Growth & Income Portfolio - Initial Class   78    111    (33)   85    384    (299)
Fidelity® VIP Growth Portfolio - Initial Class   236    855    (619)   177    3,388    (3,211)
Fidelity® VIP High Income Portfolio - Service Class 2   166    109    57    109    114    (5)
Fidelity® VIP Index 500 Portfolio - Initial Class   291    475    (184)   359    461    (102)
Fidelity® VIP Mid Cap Portfolio - Service Class 2   468    1,014    (546)   360    835    (475)
Fidelity® VIP Overseas Portfolio - Initial Class   99    443    (344)   131    122    9 

17

EquiTrust Life Variable 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   283    163    120    280    193    87 
Franklin Mutual Shares VIP Fund - Class 2   249    232    17    214    294    (80)
Franklin Small Cap Value VIP Fund - Class 2   199    435    (236)   197    526    (329)
Franklin Small-Mid Cap Growth VIP Fund - Class 2   89    98    (9)   184    349    (165)
Franklin U.S. Government Securities VIP Fund - Class 2   285    327    (42)   227    354    (127)
Templeton Growth VIP Fund - Class 2   356    371    (15)   550    420    130 
                               
Lincoln Variable Insurance Products Trust:                              
LVIP JPMorgan Mid Cap Value Fund - Standard   177    243    (66)   117    520    (403)
LVIP JPMorgan Small Cap Core Fund - Standard   143    235    (92)   157    499    (342)
                               
T. Rowe Price Equity Series, Inc.:                              
T. Rowe Price All-Cap Opportunities Portfolio   175    801    (626)   280    1,519    (1,239)
T. Rowe Price Equity Income Portfolio   245    1,013    (768)   408    1,293    (885)
T. Rowe Price Mid-Cap Growth Portfolio   247    1,369    (1,122)   351    2,146    (1,795)
T. Rowe Price Moderate Allocation Portfolio   592    1,138    (546)   628    2,240    (1,612)
                               
T. Rowe Price International Series, Inc.:                              
T. Rowe Price International Stock Portfolio   431    1,070    (639)   1,461    788    673 

18

EquiTrust Life Variable 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   Net Assets   Ratio (A)   Ratio (B)   Return (C) 
                                
American Century VP Capital Appreciation Fund:                               
2023    1,341   $48.44   $64,953    -    %   0.90%   19.60%
2022    1,368    40.50    55,417    -        0.90    (28.75)
2021    1,448    56.84    82,321    -        0.90    10.16 
2020    1,465    51.60    75,585    -        0.90    41.18 
2019    2,451    36.55    89,558    -        0.90    34.38 
American Century VP Mid Cap Value Fund:                               
2023    1,693    32.76    55,482    2.32    0.90    5.17 
2022    1,729    31.15    53,857    2.25    0.90    (2.07)
2021    1,792    31.81    56,991    1.17    0.90    22.11 
2020    1,783    26.05    46,447    1.85    0.90    0.31 
2019    1,656    25.97    43,015    2.06    0.90    27.99 
American Century VP Ultra® Fund:                               
2023    2,255    61.35    138,372    -        0.90    42.21 
2022    2,305    43.14    99,428    -        0.90    (32.97)
2021    2,312    64.36    148,809    -        0.90    22.06 
2020    1,945    52.73    102,569    -        0.90    48.54 
2019    2,014    35.50    71,503    -        0.90    33.36 
American Century VP Value Fund:                               
2023    2,501    27.95    69,901    2.39    0.90    8.12 
2022    2,520    25.85    65,125    2.04    0.90    (0.35)
2021    2,891    25.94    74,984    1.74    0.90    23.41 
2020    3,189    21.02    67,019    2.23    0.90    0.10 
2019    3,908    21.00    82,085    2.12    0.90    25.90 
BNY Mellon Sustainable U.S. Equity Portfolio - Service Shares:
2023    39    39.83    1,544    0.50    0.90    22.29 
2022    40    32.57    1,293    0.28    0.90    (23.81)
2021    41    42.75    1,732    0.66    0.90    25.51 
2020    159    34.06    5,402    0.87    0.90    22.69 
2019    158    27.76    4,378    1.24    0.90    32.82 
BNY Mellon VIF Appreciation Portfolio - Initial Shares:                               
2023    58,496    46.96    2,746,795    0.72    0.90    19.89 
2022    60,887    39.17    2,384,685    0.67    0.90    (18.78)
2021    63,785    48.23    3,076,379    0.44    0.90    25.99 
2020    65,134    38.28    2,493,275    0.79    0.90    22.57 
2019    72,748    31.23    2,271,701    1.17    0.90    34.90 
BNY Mellon VIF Growth & Income Portfolio - Initial Shares:
2023    21,199    47.65    1,010,112    0.66    0.90    25.56 
2022    21,719    37.95    824,220    0.80    0.90    (15.57)
2021    22,374    44.95    1,005,705    0.47    0.90    24.52 
2020    24,761    36.10    893,905    0.77    0.90    23.50 
2019    27,817    29.23    813,030    1.08    0.90    27.98 

19

EquiTrust Life Variable Account II

 

Notes to Financial Statements (continued)

 

    As of December 31   Investment         
        Unit       Income   Expense   Total 
Subaccount   Units   Value   Net Assets   Ratio (A)   Ratio (B)   Return (C) 
                                
BNY Mellon VIF Opportunistic Small Cap Portfolio - Initial Shares:
2023    40,668   $34.64   $1,408,856    0.33%   0.90%   8.28%
2022    41,526    31.99    1,328,198    -        0.90    (17.36)
2021    46,557    38.71    1,802,021    0.11    0.90    15.45 
2020    48,368    33.53    1,621,937    0.65    0.90    18.82 
2019    51,173    28.22    1,444,201    -        0.90    20.70 
Calvert VP NASDAQ-100 Index Portfolio:                               
2023    1,254    116.36    145,902    0.34    0.90    53.02 
2022    1,272    76.04    96,723    0.19    0.90    (33.24)
2021    1,252    113.90    142,619    0.30    0.90    25.75 
2020    1,062    90.58    96,181    0.42    0.90    46.90 
2019    1,550    61.66    95,545    0.35    0.90    37.54 
Calvert VP Russell 2000® Small Cap Index Portfolio:                               
2023    4,647    43.36    201,484    0.90    0.90    15.57 
2022    4,663    37.52    174,953    0.83    0.90    (21.23)
2021    4,733    47.63    225,415    0.75    0.90    13.51 
2020    4,741    41.96    198,945    1.18    0.90    18.56 
2019    4,390    35.39    155,352    0.92    0.90    23.96 
Calvert VP S&P MidCap 400 Index Portfolio:                               
2023    3,270    60.76    198,707    1.24    0.90    15.10 
2022    3,314    52.79    174,943    0.94    0.90    (14.11)
2021    3,394    61.46    208,632    0.85    0.90    23.31 
2020    3,377    49.84    168,338    1.24    0.90    12.30 
2019    3,692    44.38    163,880    1.18    0.90    24.70 
Federated Hermes Government Money Fund II - Service Shares:
2023    67,722    9.78    662,440    4.43    0.90    3.60 
2022    69,629    9.44    657,487    1.15    0.90    0.21 
2021    69,827    9.42    657,662    -        0.90    (0.84)
2020    68,932    9.50    655,070    0.15    0.90    (0.73)
2019    43,685    9.57    418,038    1.63    0.90    0.74 
Federated Hermes Managed Volatility Fund II - Primary Shares:
2023    79,615    18.64    1,483,977    1.87    0.90    7.75 
2022    81,734    17.30    1,414,348    1.89    0.90    (14.53)
2021    85,535    20.24    1,731,601    1.77    0.90    17.40 
2020    87,298    17.24    1,504,663    2.61    0.90    0.06 
2019    94,081    17.23    1,621,113    2.05    0.90    19.16 
Federated Hermes Quality Bond Fund II - Primary Shares:                               
2023    44,919    12.22    548,690    2.65    0.90    5.25 
2022    46,577    11.61    540,860    2.63    0.90    (10.07)
2021    49,532    12.91    639,672    2.45    0.90    (2.27)
2020    48,882    13.21    645,973    2.88    0.90    7.14 
2019    54,323    12.33    669,962    2.87    0.90    8.44 
Fidelity® VIP Contrafund® Portfolio - Initial Class:                               
2023    20,894    71.03    1,484,041    0.50    0.90    32.27 
2022    21,623    53.70    1,161,139    0.49    0.90    (26.97)
2021    23,483    73.53    1,726,766    0.06    0.90    26.69 
2020    23,796    58.04    1,381,089    0.25    0.90    29.41 
2019    28,362    44.85    1,272,082    0.46    0.90    30.42 

20

EquiTrust Life Variable Account II

 

Notes to Financial Statements (continued)

 

    As of December 31   Investment         
        Unit       Income   Expense   Total 
Subaccount   Units   Value   Net Assets   Ratio (A)   Ratio (B)   Return (C) 
                                
Fidelity® VIP Growth & Income Portfolio - Initial Class:                               
2023    2,722   $44.30   $120,561    1.70%   0.90%   17.66%
2022    2,755    37.65    103,708    1.62    0.90    (5.78)
2021    3,054    39.96    122,037    2.43    0.90    24.84 
2020    3,176    32.01    101,697    2.09    0.90    6.88 
2019    2,986    29.95    89,445    3.56    0.90    28.87 
Fidelity® VIP Growth Portfolio - Initial Class:                               
2023    8,598    60.36    518,977    0.13    0.90    35.03 
2022    9,217    44.70    412,041    0.63    0.90    (25.14)
2021    12,428    59.71    742,066    -        0.90    22.13 
2020    12,682    48.89    620,086    0.07    0.90    42.58 
2019    12,004    34.29    411,597    0.26    0.90    33.11 
Fidelity® VIP High Income Portfolio - Service Class 2:                               
2023    3,468    28.22    97,868    5.84    0.90    9.25 
2022    3,411    25.83    88,099    5.18    0.90    (12.44)
2021    3,416    29.50    100,776    5.44    0.90    3.36 
2020    2,982    28.54    85,115    4.91    0.90    1.49 
2019    4,260    28.12    119,789    5.19    0.90    13.75 
Fidelity® VIP Index 500 Portfolio - Initial Class:                               
2023    12,002    52.38    628,631    1.49    0.90    25.07 
2022    12,186    41.88    510,344    1.47    0.90    (18.95)
2021    12,288    51.67    634,880    1.27    0.90    27.45 
2020    11,975    40.54    485,512    1.77    0.90    17.17 
2019    12,371    34.60    428,040    1.98    0.90    30.17 
Fidelity® VIP Mid Cap Portfolio - Service Class 2:                               
2023    10,050    65.15    654,761    0.38    0.90    13.78 
2022    10,596    57.26    606,730    0.27    0.90    (15.72)
2021    11,071    67.94    752,216    0.36    0.90    24.18 
2020    11,413    54.71    624,387    0.40    0.90    16.80 
2019    12,572    46.84    588,813    0.69    0.90    22.07 
Fidelity® VIP Overseas Portfolio - Initial Class:                         
2023     2,738    28.99    79,386    0.99    0.90    19.40 
2022    3,082    24.28    74,824    1.09    0.90    (25.15)
2021    3,073    32.44    99,667    0.52    0.90    18.65 
2020    3,342    27.34    91,369    0.51    0.90    14.59 
2019    2,841    23.86    67,802    1.74    0.90    26.65 
Franklin Global Real Estate VIP Fund - Class 2:                               
2023    3,255    16.83    54,793    2.86    0.90    10.43 
2022    3,135    15.24    47,786    2.39    0.90    (26.73)
2021    3,048    20.80    63,392    0.88    0.90    25.68 
2020    2,914    16.55    48,228    2.93    0.90    (6.23)
2019    3,675    17.65    64,881    2.68    0.90    21.31 
Franklin Mutual Shares VIP Fund - Class 2:                               
2023    4,687    31.36    147,004    1.90    0.90    12.44 
2022    4,670    27.89    130,234    1.86    0.90    (8.26)
2021    4,750    30.40    144,396    2.91    0.90    18.10 
2020    4,797    25.74    123,471    2.83    0.90    (5.89)
2019    5,294    27.35    144,772    1.85    0.90    21.50 

21

EquiTrust Life Variable Account II

 

Notes to Financial Statements (continued) 

 

    As of December 31   Investment         
        Unit       Income   Expense   Total 
Subaccount   Units   Value   Net Assets   Ratio (A)   Ratio (B)   Return (C) 
                                
Franklin Small Cap Value VIP Fund - Class 2:                               
2023    5,062   $56.96   $288,288    0.53%   0.90%   11.75%
2022    5,298    50.97    270,065    0.99    0.90    (10.86)
2021    5,627    57.18    321,796    1.00    0.90    24.25 
2020    5,812    46.02    267,503    1.42    0.90    4.24 
2019    6,489    44.15    286,469    1.05    0.90    25.21 
Franklin Small-Mid Cap Growth VIP Fund - Class 2:                               
2023    4,457    44.62    198,869    -        0.90    25.62 
2022    4,466    35.52    158,661    -        0.90    (34.30)
2021    4,631    54.06    250,351    -        0.90    9.04 
2020    4,555    49.58    225,838    -        0.90    53.69 
2019    5,015    32.26    161,746    -        0.90    30.29 
Franklin U.S. Government Securities VIP Fund - Class 2:                               
2023    9,762    14.10    137,617    2.72    0.90    3.52 
2022    9,804    13.62    133,494    2.35    0.90    (10.51)
2021    9,931    15.22    151,186    2.55    0.90    (2.75)
2020    8,827    15.65    138,115    3.19    0.90    2.96 
2019    12,645    15.20    192,262    2.85    0.90    4.25 
Templeton Growth VIP Fund - Class 2:                               
2023    8,143    22.77    185,390    3.33    0.90    19.97 
2022    8,158    18.98    154,846    0.16    0.90    (12.29)
2021    8,028    21.64    173,737    1.10    0.90    3.94 
2020    7,930    20.82    165,112    3.03    0.90    4.83 
2019    7,645    19.86    151,828    2.78    0.90    14.14 
LVIP JPMorgan Mid Cap Value Fund - Standard:                               
2023    6,450    66.95    431,820    3.19    0.90    9.92 
2022    6,516    60.91    396,847    0.96    0.90    (8.97)
2021    6,919    66.91    462,954    0.90    0.90    28.72 
2020    7,133    51.98    370,751    1.44    0.90    (0.54)
2019    7,645    52.26    399,484    1.59    0.90    25.66 
LVIP JPMorgan Small Cap Core Fund - Standard:                         
2023    5,558    42.68    237,213    1.37    0.90    12.11 
2022    5,650    38.07    215,089    0.46    0.90    (20.07)
2021    5,992    47.63    285,396    0.51    0.90    20.31 
2020    6,135    39.59    242,908    0.92    0.90    12.66 
2019    6,680    35.14    234,743    0.40    0.90    23.47 
T. Rowe Price All-Cap Opportunities Portfolio:                               
2023    20,594    63.40    1,305,705    0.25    0.90    27.82 
2022    21,220    49.60    1,052,568    -        0.90    (22.22)
2021    22,459    63.77    1,432,122    -        0.90    19.73 
2020    23,139    53.26    1,232,426    -        0.90    43.10 
2019    26,754    37.22    995,921    0.41    0.90    33.69 
T. Rowe Price Equity Income Portfolio:                               
2023    15,844    46.16    731,277    2.10    0.90    8.59 
2022    16,612    42.51    706,232    1.87    0.90    (4.21)
2021    17,497    44.38    776,488    1.57    0.90    24.45 
2020    18,267    35.66    651,509    2.35    0.90    0.25 
2019    18,691    35.57    664,775    2.32    0.90    25.29 

22

EquiTrust Life Variable Account II

 

Notes to Financial Statements (continued)

 

    As of December 31   Investment         
        Unit       Income   Expense   Total 
Subaccount   Units   Value   Net Assets   Ratio (A)   Ratio (B)   Return (C) 
                                
T. Rowe Price Mid-Cap Growth Portfolio:                               
2023    25,958   $92.88   $2,410,888    -    %   0.90%   18.89%
2022    27,080    78.12    2,115,485    -        0.90    (23.27)
2021    28,875    101.81    2,939,789    -        0.90    13.83 
2020    34,628    89.44    3,097,276    -        0.90    22.69 
2019    37,069    72.90    2,702,251    0.14    0.90    30.13 
T. Rowe Price Moderate Allocation Portfolio:                               
2023    28,010    38.64    1,082,346    2.32    0.90    14.32 
2022    28,556    33.80    965,181    1.55    0.90    (19.04)
2021    30,168    41.75    1,259,523    0.98    0.90    9.09 
2020    30,795    38.27    1,178,662    1.39    0.90    13.49 
2019    30,733    33.72    1,036,239    1.96    0.90    18.73 
T. Rowe Price International Stock Portfolio:                               
2023    16,790    22.31    374,582    1.00    0.90    15.18 
2022    17,429    19.37    337,522    0.80    0.90    (16.54)
2021    16,756    23.21    388,914    0.59    0.90    0.43 
2020    16,833    23.11    389,087    0.56    0.90    13.40 
2019    18,653    20.38    380,117    2.45    0.90    26.66 

23

EquiTrust Life Variable Account II

 

Notes to Financial Statements (continued)

 

(A)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.

 

(B)These ratios represent the annualized policy 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 policy owner accounts through the redemption of units and expenses of the underlying fund are excluded.

 

(C)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.

 

Newly 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