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Closed Block | 3 Months Ended
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Mar. 31, 2021
Closed Block Disclosure [Abstract] |
Closed Block | CLOSED BLOCK On December 18, 2001, the date of demutualization, The Prudential Insurance Company of America (“PICA”) established a closed block for certain in-force participating insurance policies and annuity products, along with corresponding assets used for the payment of benefits and policyholders’ dividends on these products, (collectively the “Closed Block”), and ceased offering these participating products. The recorded assets and liabilities were allocated to the Closed Block at their historical carrying amounts. The Closed Block forms the principal component of the Closed Block division. For additional information on the Closed Block, see Note 15 to the Company’s Consolidated Financial Statements included in the Annual Report on Form 10-K for the year ended December 31, 2020. As of March 31, 2021 and December 31, 2020, the Company recognized a policyholder dividend obligation of $3,166 million and $2,920 million, respectively, to Closed Block policyholders for the excess of actual cumulative earnings over expected cumulative earnings. Additionally, accumulated net unrealized investment gains that have arisen subsequent to the establishment of the Closed Block have been reflected as a policyholder dividend obligation of $3,244 million and $5,867 million at March 31, 2021 and December 31, 2020, respectively, to be paid to Closed Block policyholders unless offset by future experience, with a corresponding amount reported in AOCI. Closed Block liabilities and assets designated to the Closed Block, as well as maximum future earnings to be recognized from these liabilities and assets, are as follows:
|  | March 31, 2021 |  | December 31, 2020
|  | (in millions)
Closed Block liabilities |  |  |  |
Future policy benefits |  | $ | 46,392 |  |  | $ | 46,762 |
Policyholders’ dividends payable |  | 651 |  |  | 635 |
Policyholders’ dividend obligation |  | 6,410 |  |  | 8,787 |
Policyholders’ account balances |  | 4,839 |  |  | 4,874 |
Other Closed Block liabilities |  | 3,358 |  |  | 3,141 |
Total Closed Block liabilities |  | 61,650 |  |  | 64,199 |
Closed Block assets |  |  |  |
Fixed maturities, available-for-sale, at fair value |  | 38,687 |  |  | 41,959 |
Fixed maturities, trading, at fair value |  | 271 |  |  | 277 |
Equity securities, at fair value |  | 2,563 |  |  | 2,345 |
Commercial mortgage and other loans |  | 8,297 |  |  | 8,421 |
Policy loans |  | 3,984 |  |  | 4,064 |
Other invested assets |  | 3,730 |  |  | 3,610 |
Short-term investments |  | 132 |  |  | 124 |
Total investments |  | 57,664 |  |  | 60,800 |
Cash and cash equivalents |  | 811 |  |  | 269 |
Accrued investment income |  | 453 |  |  | 431 |
Other Closed Block assets |  | 129 |  |  | 92 |
Total Closed Block assets |  | 59,057 |  |  | 61,592 |
Excess of reported Closed Block liabilities over Closed Block assets |  | 2,593 |  |  | 2,607 |
Portion of above representing accumulated other comprehensive income (loss): |  |  |  |
Net unrealized investment gains (losses) |  | 3,189 |  |  | 5,810 |
Allocated to policyholder dividend obligation |  | (3,244) |  |  | (5,867) |
Future earnings to be recognized from Closed Block assets and Closed Block liabilities |  | $ | 2,538 |  |  | $ | 2,550 |
Information regarding the policyholder dividend obligation is as follows:
|  | Three Months Ended March 31, 2021
|  | (in millions)
Balance, December 31, 2020 |  | $ | 8,787 |
Impact from earnings allocable to policyholder dividend obligation |  | 246 |
Change in net unrealized investment gains (losses) allocated to policyholder dividend obligation |  | (2,623) |
Balance, March 31, 2021 |  | $ | 6,410 |
Closed Block revenues and benefits and expenses are as follows for the periods indicated:
|  |  | Three Months Ended March 31,
|  |  |  |  | 2021 |  | 2020
|  |  |  |  | (in millions)
Revenues |  |  |  |  |  |  |
Premiums |  |  |  |  | $ | 431 |  |  | $ | 480 |
Net investment income |  |  |  |  | 590 |  |  | 548 |
Realized investment gains (losses), net |  |  |  |  | 72 |  |  | 256 |
Other income (loss) |  |  |  |  | 276 |  |  | (603) |
Total Closed Block revenues |  |  |  |  | 1,369 |  |  | 681 |
Benefits and Expenses |  |  |  |  |  |  |
Policyholders’ benefits |  |  |  |  | 634 |  |  | 647 |
Interest credited to policyholders’ account balances |  |  |  |  | 31 |  |  | 32 |
Dividends to policyholders |  |  |  |  | 581 |  |  | (94) |
General and administrative expenses |  |  |  |  | 79 |  |  | 85 |
Total Closed Block benefits and expenses |  |  |  |  | 1,325 |  |  | 670 |
Closed Block revenues, net of Closed Block benefits and expenses, before income taxes |  |  |  |  | 44 |  |  | 11 |
Income tax expense (benefit) |  |  |  |  | 29 |  |  | (6) |
Closed Block revenues, net of Closed Block benefits and expenses and income taxes |  |  |  |  | $ | 15 |  |  | $ | 17 |

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- Definition The entire disclosure pertaining to the closed block. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 944 -SubTopic 805 -Section 50 -Paragraph 3 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=121638837&loc=d3e30806-158569 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 944 -SubTopic 805 -URI http://asc.fasb.org/subtopic&trid=2560393 + Details
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