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FUTURE POLICY BENEFITS, POLICY AND CONTRACT CLAIMS AND POLICYHOLDERS' ACCOUNT BALANCES | 6 Months Ended
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Jun. 30, 2022
Insurance Reserve [Abstract] |
FUTURE POLICY BENEFITS, POLICY AND CONTRACT CLAIMS AND POLICYHOLDERS' ACCOUNT BALANCES | FUTURE POLICY BENEFITS, POLICY AND CONTRACT CLAIMS AND POLICYHOLDERS' ACCOUNT BALANCES The Company’s future policy benefits and policy, contract claims and policyholders account balances are as follows:
AS AT JUN. 30, 2022 AND DEC. 31, 2021 US$ MILLIONS |  | 2022 |  | 2021
Gross |  | $ | 30,086 |  |  | $ | 8,497 |
Reinsurance assets |  | (576) |  |  | (169) |
Total insurance reserves |  | $ | 29,510 |  |  | $ | 8,328 |
Reinsurance assets reflect immediate and deferred annuity payments ceded under the reinsurance arrangements. The following table summarizes the movement between insurance reserves for the periods ended June 30, 2022 and June 30, 2021 by its major components:
Future Policy Benefits |  |  |  |  |  |  |  |  |  |  |  |
FOR THE THREE MONTHS ENDED JUN. 30 2022 US$ MILLIONS |  | Life |  | Annuities |  | Health |  | Gross reserves |  | Reinsurance assets |  | Net
Beginning of period |  | $ | — |  |  | $ | 8,512 |  |  | $ | — |  |  | $ | 8,512 |  |  | $ | 148 |  |  | $ | 8,364 |
Changes during the period |  |  |  |  |  |  |  |  |  |  |  |
Acquisition from business combination |  | 3,459 |  |  | 1,627 |  |  | 46 |  |  | 5,132 |  |  | 7 |  |  | 5,125 |
New business |  | 1 |  |  | 1,228 |  |  | — |  |  | 1,229 |  |  | — |  |  | 1,229 |
Normal changes |  | (236) |  |  | (169) |  |  | — |  |  | (405) |  |  | 95 |  |  | (500) |
Management actions and changes in assumptions |  | — |  |  | 16 |  |  | — |  |  | 16 |  |  | — |  |  | 16 |
|  | 3,224 |  |  | 2,702 |  |  | 46 |  |  | 5,972 |  |  | 102 |  |  | 5,870 |
Impact of foreign exchange 1 |  | — |  |  | (74) |  |  | — |  |  | (74) |  |  | (4) |  |  | (70) |
Balance at end of period |  | $ | 3,224 |  |  | $ | 11,140 |  |  | $ | 46 |  |  | $ | 14,410 |  |  | $ | 246 |  |  | $ | 14,164 |
Future Policy Benefits |  |  |  |  |  |  |  |  |  |  |  |
FOR THE SIX MONTHS ENDED JUN. 30 2022 US$ MILLIONS |  | Life |  | Annuities |  | Health |  | Gross reserves |  | Reinsurance assets |  | Net
Beginning of period |  | $ | — |  |  | $ | 8,497 |  |  | $ | — |  |  | $ | 8,497 |  |  | $ | 169 |  |  | $ | 8,328 |
Changes during the period |  |  |  |  |  |  |  |  |  |  |  |
Acquisition from business combination |  | 3,459 |  |  | 1,627 |  |  | 46 |  |  | 5,132 |  |  | 7 |  |  | 5,125 |
New business |  | 1 |  |  | 1,535 |  |  | — |  |  | 1,536 |  |  | — |  |  | 1,536 |
Normal changes |  | (236) |  |  | (520) |  |  | — |  |  | (756) |  |  | 73 |  |  | (829) |
Management actions and changes in assumptions |  | — |  |  | 53 |  |  | — |  |  | 53 |  |  | — |  |  | 53 |
|  | 3,224 |  |  | 2,695 |  |  | 46 |  |  | 5,965 |  |  | 80 |  |  | 5,885 |
Impact of foreign exchange 1 |  | — |  |  | (52) |  |  | — |  |  | (52) |  |  | (3) |  |  | (49) |
Balance at end of period |  | $ | 3,224 |  |  | $ | 11,140 |  |  | $ | 46 |  |  | $ | 14,410 |  |  | $ | 246 |  |  | $ | 14,164 |
Future Policy Benefits |  |  |  |  |  |  |  |  |  |  |
FOR THE THREE MONTHS ENDED JUN. 30 2021 US$ MILLIONS | Life |  | Annuities |  | Health |  | Gross reserves |  | Reinsurance assets |  | Net
Beginning of period | $ | — |  |  | $ | 1,264 |  |  | $ | — |  |  | $ | 1,264 |  |  | $ | 178 |  |  | $ | 1,086 |
Changes during the period |  |  |  |  |  |  |  |  |  |  |
New business | — |  |  | 52 |  |  | — |  |  | 52 |  |  | — |  |  | 52 |
Normal changes | — |  |  | 6 |  |  | — |  |  | 6 |  |  | (4) |  |  | 10 |
Management actions and changes in assumptions | — |  |  | 1 |  |  | — |  |  | 1 |  |  | (1) |  |  | 2 |
| — |  |  | 59 |  |  | — |  |  | 59 |  |  | (5) |  |  | 64 |
Impact of foreign exchange 1 | — |  |  | 16 |  |  | — |  |  | 16 |  |  | 3 |  |  | 13 |
Balance at end of period | $ | — |  |  | $ | 1,339 |  |  | $ | — |  |  | $ | 1,339 |  |  | $ | 176 |  |  | $ | 1,163 |
Future Policy Benefits |  |  |  |  |  |  |  |  |  |  |
FOR THE SIX MONTHS ENDED JUN. 30 2021 US$ MILLIONS | Life |  | Annuities |  | Health |  | Gross reserves |  | Reinsurance assets |  | Net
Beginning of period | $ | — |  |  | $ | 1,339 |  |  | $ | — |  |  | $ | 1,339 |  |  | $ | 190 |  |  | $ | 1,149 |
Changes during the period |  |  |  |  |  |  |  |  |  |  |
New business | — |  |  | 55 |  |  | — |  |  | 55 |  |  | — |  |  | 55 |
Normal changes | — |  |  | (94) |  |  | — |  |  | (94) |  |  | (18) |  |  | (76) |
Management actions and changes in assumptions | — |  |  | 5 |  |  | — |  |  | 5 |  |  | (2) |  |  | 7 |
| — |  |  | (34) |  |  | — |  |  | (34) |  |  | (20) |  |  | (14) |
Impact of foreign exchange 1 | — |  |  | 34 |  |  | — |  |  | 34 |  |  | 6 |  |  | 28 |
Balance at end of period | $ | — |  |  | $ | 1,339 |  |  | $ | — |  |  | $ | 1,339 |  |  | $ | 176 |  |  | $ | 1,163 |
Policy and contract claims |  |  |  |  |  |
FOR THE THREE AND SIX MONTHS ENDED JUN. 30 2022 US$ MILLIONS |  | Gross reserves |  | Reinsurance assets |  | Net
Beginning of period |  | $ | — |  |  | $ | — |  |  | $ | — |
Changes during the period |  |  |  |  |  |
Acquisition from business combination |  | 1,706 |  |  | 116 |  |  | 1,590 |
New business |  | — |  |  | — |  |  | — |
Normal changes |  | 12 |  |  | 211 |  |  | (199) |
Management actions and changes in assumptions |  | 16 |  |  | 3 |  |  | 13 |
|  | 1,734 |  |  | 330 |  |  | 1,404 |
Balance at end of period |  | $ | 1,734 |  |  | $ | 330 |  |  | $ | 1,404 |
1.Foreign currency translation reported as a separate component of other comprehensive income. The following table presents movement in Policyholders’ account balances:
|  | Three Months Ended |  | Six Months Ended
FOR THE THREE AND SIX MONTHS ENDED JUN. 30 2022 US$ MILLIONS |  | 2022 |  | 2021 |  | 2022 |  | 2021
Beginning of period |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Changes during the period |  |  |  |  |  |  |  |
Acquisition from business combination |  | 13,939 |  |  | — |  |  | 13,939 |  |  | — |
Policyholders' account deposits |  | 141 |  |  | — |  |  | 141 |  |  | — |
Interest credited to policyholders' account balances |  | 5 |  |  | — |  |  | 5 |  |  | — |
Policyholders' account withdrawals |  | (112) |  |  | — |  |  | (112) |  |  | — |
Charges to policyholders' account balances |  | (31) |  |  | — |  |  | (31) |  |  | — |
Balance at end of period |  | $ | 13,942 |  |  | $ | — |  |  | $ | 13,942 |  |  | $ | — |
Under fair value accounting required by our Canadian PRT business, movement in the fair value of the supporting assets is a primary driver of the movement of insurance reserves. In a duration matched portfolio, changes in the fair value of assets are largely offset by corresponding changes in the fair value of liabilities. The change in the value of the insurance reserves associated with the change in the value of the supporting assets is included within normal changes above. The insurance reserve from reinsurance activities is not sensitive to the fair value of the supporting assets under US GAAP reserve methodology. The increases in future policy benefits during the three months ended and six months ended June 30, 2022 were mainly due to the impact of the acquisition of American National of $5.1 billion and the new business of $1.2 billion and $1.5 billion, offset by the negative impact of normal changes of $500 million and $829 million respectively, which was primarily driven by the market value changes from increases in interest rates. Management actions and changes in assumptions increased future policy benefits by $16 million for the three months ended and $53 million for the six months ended June 30, 2022, resulting in net increases in future policy benefits, before the negative impact of foreign exchange of $70 million and $49 million respectively. For the three and six months ended June 30, 2022, the policy and contract claims increased by $1.4 billion primarily driven by the additions from the acquisition of American National. The acquisition of American National resulted in negative VOBA of $781 million related to the life and annuity business, and has been recognized in the Company's future policy benefits (life and annuities) and policyholders' account balances. Negative VOBA is amortized over 30 years using the straight-line method. Amortized negative VOBA revenue of $2 million was recorded since the acquisition date and we expect to record an additional $12 million for the remainder of 2022.

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